House sales tax unlikely to hit Kiwis

Foreign Affairs Minister Gerry Brownlee says most Kiwis living in Australia weren’t considered foreigners so wouldn’t be subject to any law change that taxes profits on house sales.

Earlier this month the Australian Budget removed an exemption from capital gains tax on a main residence for foreign and temporary tax residents.

It’s once again added fuel to the fire of a breakdown of transTasman relations and Kiwis living in Australia getting stung by the government.

Brownlee, who recently met his counterpart Julie Bishop, to vent New Zealand’s concerns over education and immigration changes affecting Kiwis as Australia moves towards an ‘‘Australia First’’ policy, says in this instance nothing has changed.

‘‘There’s no legislation yet in the Australian Parliament around this. They’re working through it, we’re working with them to make sure they understand that Kiwis have had a long exclusion from being considered foreign for land purchases in Australia.

‘‘What it looks like is the Australian Budget wants to capture some of the foreign purchasers in Australia – similar to the way we do in New Zealand. But that does not mean New Zealanders are caught, at this point we are still in discussions with Australia about that,’’ Brownlee said.

It’s understood the proposed tax on house sale profits would be up to 50 per cent but it’s still being considered by the Australian Treasury.

Brownlee said New Zealanders were generally under a ‘‘special category visa’’ which wasn’t part of the proposed changes and has different provisions.

When Brownlee met Bishop in Sydney an undertaking was made that Australia would consult with New Zealand in the future regarding any changes to their laws that would affect Kiwis living abroad. ‘‘We have heard from the Treasurer’s office and they’re well aware of New Zealand’s particularly special position relating to Australia, so we would assume that the undertaking we’ve had so far about early consultation as they go through this process over the next several months before they have a bill will continue.’’

If changes were made to the tax status of Kiwis living in Australia then Brownlee said it would need to be done through the legislative process. ‘‘We’d hope we can keep the measures we have in place now in any new arrangement they have.’’