Capital Gains impact of selling home in U.S.

[sfmike]

Greetings all - first time on forum.

My wife and I are getting ready to relocate from San Francisco to Sydney in the next couple of months, and are wondering whether or not to sell our home here first. My understanding is that gain on personal residence is exempt in Australia. In the U.S., the situation is slightly different - we can claim up to a $500k exclusion on capital gains if we lived in the house for 2 of the previous 5 years.

Assuming we move to Australia, then sell the house within the next 3 years, would the gain be taxable in Australia? It would be exempt in the U.S. but that wouldn't do us any good if we have to pay the (higher) Australia capital gains tax.

I spent an hour with an international tax specialist this morning, but he couldn't tell me.

Thanks for any responses or suggestions.

[matjones]

Originally Posted by sfmike

Greetings all - first time on forum.

My wife and I are getting ready to relocate from San Francisco to Sydney in the next couple of months, and are wondering whether or not to sell our home here first. My understanding is that gain on personal residence is exempt in Australia. In the U.S., the situation is slightly different - we can claim up to a $500k exclusion on capital gains if we lived in the house for 2 of the previous 5 years.

Assuming we move to Australia, then sell the house within the next 3 years, would the gain be taxable in Australia? It would be exempt in the U.S. but that wouldn't do us any good if we have to pay the (higher) Australia capital gains tax.

I spent an hour with an international tax specialist this morning, but he couldn't tell me.

Thanks for any responses or suggestions.

Hi Mike,

I am currently in SF too, still awaiting my AU visa. I had some tax issues that I also needed to figure out and discussed them with a Tax Attorney in Australia who also does US tax returns for expats. Here is his email address if you want to drop him a line and set up a phone appointment:

Colin Heard
Phone: +61 (0)3 9668 5119
Email: colinheard@hotmail.com


Hopefully that will help. Where in the city are you?

Mat

[sfmike]

Thanks for the tip Mat. Found him on LinkedIn, and he looks perfect - 10 years with Price Waterhouse doing expat taxes and now self-employed. I work at a nonprofit and we're paying for our own move, so keeping costs under control is key. Only wrinkle for me is he's based in Melbourne not Sydney, but I think the state-to-state differences are not as dramatic there.

We're in Noe Valley in SF. We're moving to Oz for family reasons - my wife is Australian and we have a ~2 year old boy. That said, I've spent more than a year there since we met, and I'm really excited about the move. I wish you well in your quest!