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This is a Bill, not an Act. For current law, see the Acts databases.
2016-2017-2018
The Parliament of the
Commonwealth of Australia
HOUSE OF REPRESENTATIVES
Presented and read a first time
Treasury Laws Amendment (Reducing
Pressure on Housing Affordability
Measures No. 2) Bill 2018
No. , 2018
(Treasury)
A Bill for an Act to amend the law relating to
taxation and foreign acquisitions and takeovers,
and for related purposes
No. , 2018
Treasury Laws Amendment (Reducing Pressure on Housing
Affordability Measures No. 2) Bill 2018
i
Contents
1
Short title ........................................................................................... 1
2
Commencement ................................................................................. 1
3
Schedules ........................................................................................... 2
Schedule 1--Capital gains tax changes for foreign residents
3
Part 1--Main residence exemption
3
Income Tax Assessment Act 1997
3
Income Tax (Transitional Provisions) Act 1997
7
Part 2--Principal asset test
9
Income Tax Assessment Act 1997
9
Schedule 2--Near-new dwelling interests
10
Part 1--Amendments
10
Foreign Acquisitions and Takeovers Act 1975
10
Part 2--Application and transitional provisions
12
Schedule 3--Additional capital gains discount for affordable
housing
13
Income Tax Assessment Act 1997
13
Taxation Administration Act 1953
17
No. , 2018
Treasury Laws Amendment (Reducing Pressure on Housing
Affordability Measures No. 2) Bill 2018
1
A Bill for an Act to amend the law relating to
1
taxation and foreign acquisitions and takeovers,
2
and for related purposes
3
The Parliament of Australia enacts:
4
1 Short title
5
This Act is the Treasury Laws Amendment (Reducing Pressure on
6
Housing Affordability Measures No. 2) Act 2018.
7
2 Commencement
8
(1) Each provision of this Act specified in column 1 of the table
9
commences, or is taken to have commenced, in accordance with
10
column 2 of the table. Any other statement in column 2 has effect
11
according to its terms.
12
2
Treasury Laws Amendment (Reducing Pressure on Housing
Affordability Measures No. 2) Bill 2018
No. , 2018
1
Commencement information
Column 1
Column 2
Column 3
Provisions
Commencement
Date/Details
1. Sections 1 to 3
and anything in
this Act not
elsewhere covered
by this table
The day this Act receives the Royal Assent.
2. Schedule 1
The first 1 January, 1 April, 1 July or
1 October to occur after the day this Act
receives the Royal Assent.
3. Schedule 2
The day after this Act receives the Royal
Assent.
4. Schedule 3
The first 1 January, 1 April, 1 July or
1 October to occur after the day this Act
receives the Royal Assent.
Note:
This table relates only to the provisions of this Act as originally
2
enacted. It will not be amended to deal with any later amendments of
3
this Act.
4
(2) Any information in column 3 of the table is not part of this Act.
5
Information may be inserted in this column, or information in it
6
may be edited, in any published version of this Act.
7
3 Schedules
8
Legislation that is specified in a Schedule to this Act is amended or
9
repealed as set out in the applicable items in the Schedule
10
concerned, and any other item in a Schedule to this Act has effect
11
according to its terms.
12
Capital gains tax changes for foreign residents Schedule 1
Main residence exemption Part 1
No. , 2018
Treasury Laws Amendment (Reducing Pressure on Housing
Affordability Measures No. 2) Bill 2018
3
Schedule 1--Capital gains tax changes for
1
foreign residents
2
Part 1--Main residence exemption
3
Income Tax Assessment Act 1997
4
1 Section 118-100
5
After "this exemption", insert "may not apply if you are a foreign
6
resident, and".
7
2 At the end of section 118-105
8
Add:
9
Note:
The exemption is not available for the main residence of a foreign
10
resident.
11
3 Paragraph 118-110(2)(a)
12
Omit "I1, I2,".
13
4 At the end of section 118-110
14
Add:
15
(3) However, this section does not apply if, at the time the
*
CGT event
16
happens, you are a foreign resident.
17
5 Subsection 118-145(4) (example)
18
Omit "(again renting it out), at the end of which you sell the house.",
19
substitute "(again renting it out). You then move back into it for 3 years,
20
after which you sell the house.".
21
6 At the end of section 118-155
22
Add:
23
(5) However, this section does not apply if, just before the individual's
24
death, the individual was a foreign resident.
25
Schedule 1 Capital gains tax changes for foreign residents
Part 1 Main residence exemption
4
Treasury Laws Amendment (Reducing Pressure on Housing
Affordability Measures No. 2) Bill 2018
No. , 2018
7 Subsection 118-170(4) (example)
1
Omit "You and your spouse own", substitute "You and your spouse
2
(who are Australian residents) own".
3
8 Subsection 118-178(2) (at the end of example 1)
4
Add "if, at the time the dwelling is sold, Susan is an Australian
5
resident".
6
9 Subsection 118-178(2) (at the end of example 2)
7
Add "if, at the time the dwelling is sold, David is an Australian
8
resident".
9
10 Subsection 118-185(2) (example)
10
Omit "You bought a house in July 1990 and moved in immediately. In
11
July 1993, you moved out and began to rent it. You sold it in July 2000,
12
making (apart from this Subdivision) a capital gain of $10,000.",
13
substitute "You bought a house in July 2020 and moved in immediately.
14
In July 2023, you moved out and began to rent it. You sold it in July
15
2030, making (apart from this Subdivision) a capital gain of $10,000. At
16
the time you sold the house, you were an Australian resident.".
17
11 At the end of section 118-185
18
Add:
19
(3) However, this section does not apply if, at the time the
*
CGT event
20
happens, you are a foreign resident.
21
12 After paragraph 118-195(1)(b)
22
Insert:
23
; and (c) the deceased was an Australian resident just before the
24
deceased's death.
25
13 After subsection 118-195(1)
26
Insert:
27
(1A) For the purposes of a provision of this Subdivision that applies the
28
table in subsection (1):
29
Capital gains tax changes for foreign residents Schedule 1
Main residence exemption Part 1
No. , 2018
Treasury Laws Amendment (Reducing Pressure on Housing
Affordability Measures No. 2) Bill 2018
5
(a) disregard paragraphs (a) and (b) in column 3 of item 2 of the
1
table if, just before the deceased's death, the deceased was a
2
foreign resident; and
3
(b) disregard paragraph (c) in column 3 of item 2 of the table if,
4
at the time the relevant
*
CGT event happened, the individual
5
was a foreign resident.
6
Note:
The other provisions that apply the table include
7
paragraph 118-192(3)(b), subsection 118-200(2),
8
paragraph 118-225(3)(c) and section 118-260.
9
14 Paragraph 118-195(2)(a)
10
Omit "I1, I2,".
11
15 Subsection 118-200(2) (after paragraph (a) of the definition
12
of non-main residence days)
13
Insert:
14
(aa) if the deceased acquired the ownership interest on or after
15
20 September 1985 and, just before the deceased's death, the
16
deceased was a foreign resident--the number of remaining
17
days in the deceased's ownership period; and
18
16 After paragraph 118-200(3)(c)
19
Insert:
20
; and (d) just before the deceased's death, the deceased was an
21
Australian resident.
22
17 At the end of subsection 118-200(4)
23
Add:
24
; and (c) just before the deceased's death, the deceased was an
25
Australian resident.
26
18 At the end of section 118-205
27
Add:
28
(4) Add to the component non-main residence days in the formula the
29
number of days in the period applicable under subsection (2) that
30
the
*
dwelling was the main residence of an individual who:
31
(a) owned the dwelling; and
32
Schedule 1 Capital gains tax changes for foreign residents
Part 1 Main residence exemption
6
Treasury Laws Amendment (Reducing Pressure on Housing
Affordability Measures No. 2) Bill 2018
No. , 2018
(b) was a foreign resident;
1
just before the individual's death.
2
19 Paragraph 118-210(5)(a)
3
Omit "I1, I2,".
4
20 At the end of section 118-210
5
Add:
6
(6) However, this section does not apply if, just before the deceased's
7
death, the deceased was a foreign resident.
8
21 Section 118-215 (note)
9
Omit "Note", substitute "Note 1".
10
22 At the end of section 118-215
11
Add:
12
Note 2:
The exemptions may not apply if the principal beneficiary of the trust
13
is a foreign resident.
14
23 At the end of subsection 118-218(1)
15
Add:
16
; and (d) the
*
principal beneficiary of the trust is an Australian resident
17
at the time the CGT event happens.
18
24 At the end of section 118-225
19
Add:
20
(5) However, subsection (2) does not apply if, just before the
21
deceased's death, the deceased was a foreign resident.
22
25 After paragraph 118-227(1)(c)
23
Insert:
24
; and (ca) just before the deceased's death, the deceased was an
25
Australian resident;
26
26 Section 118-240 (note)
27
Omit "Note", substitute "Note 1".
28
Capital gains tax changes for foreign residents Schedule 1
Main residence exemption Part 1
No. , 2018
Treasury Laws Amendment (Reducing Pressure on Housing
Affordability Measures No. 2) Bill 2018
7
27 At the end of section 118-240
1
Add:
2
Note 2:
The exemption does not apply at all if you are a foreign resident.
3
28 At the end of section 118-245
4
Add:
5
No exemption if you are a foreign resident
6
(3) However, this section does not apply if, at the time the
*
CGT event
7
happens, you are a foreign resident.
8
29 Subsection 128-15(4) (cell at table item 3, column headed
9
"For this kind of CGT asset:")
10
Repeal the cell, substitute:
11
A
*
dwelling that was your
main residence just before
you died if:
(a) the dwelling was not
then being used for the
*
purpose of producing
assessable income; and
(b) you were then an
Australian resident
Income Tax (Transitional Provisions) Act 1997
12
30 Before section 118-195
13
Insert:
14
118-110 Foreign residents
15
(1) None of the amendments made by Part 1 of Schedule 1 to the
16
Treasury Laws Amendment (Reducing Pressure on Housing
17
Affordability Measures No. 2) Act 2018 apply in relation to a
18
capital gain or capital loss you make from a CGT event if:
19
(a) the CGT event happens on or before 30 June 2019; and
20
Schedule 1 Capital gains tax changes for foreign residents
Part 1 Main residence exemption
8
Treasury Laws Amendment (Reducing Pressure on Housing
Affordability Measures No. 2) Bill 2018
No. , 2018
(b) you held an ownership interest in the dwelling to which the
1
CGT event relates throughout the period:
2
(i) starting just before 7.30 pm (by legal time in the
3
Australian Capital Territory) on 9 May 2017; and
4
(ii) ending just before the CGT event happens.
5
(2) For the purposes of paragraph (1)(b), treat the ownership interest in
6
the dwelling as having been held by you during a time during
7
which the interest was held by:
8
(a) in relation to sections 118-195 to 118-210 of the Income Tax
9
Assessment Act 1997--the deceased or the trustee of the
10
deceased estate; or
11
(b) in relation to sections 118-215 to 118-230 of that Act--the
12
trustee of the special disability trust.
13
31 Application of amendments
14
The amendments made by this Part apply in relation to CGT events
15
happening at or after 7.30 pm, by legal time in the Australian Capital
16
Territory, on 9 May 2017.
17
Capital gains tax changes for foreign residents Schedule 1
Principal asset test Part 2
No. , 2018
Treasury Laws Amendment (Reducing Pressure on Housing
Affordability Measures No. 2) Bill 2018
9
Part 2--Principal asset test
1
Income Tax Assessment Act 1997
2
32 Subsection 855-30(4) (table item 1)
3
Repeal the item, substitute:
4
1
the sum of the
*
total
participation interests
held by the holding
entity and its
*
associates in the
other entity is less
than 10%
zero
the
*
market value of
the
*
membership
interest mentioned in
subsection (3)
33 After subsection 855-30(4)
5
Insert:
6
(4A) For the purposes of working out the
*
total participation interests
7
held by the holding entity and its
*
associates under item 1 of the
8
table in subsection (4), take into account:
9
(a) a particular
*
direct participation interest; or
10
(b) a particular
*
indirect participation interest;
11
held in the other entity only once if it would otherwise be counted
12
more than once because the entity holding it is an associate of the
13
holding entity.
14
34 Application of amendments
15
The amendments made by this Part apply in relation to CGT events
16
happening at or after 7.30 pm, by legal time in the Australian Capital
17
Territory, on 9 May 2017.
18
Schedule 2 Near-new dwelling interests
Part 1 Amendments
10
Treasury Laws Amendment (Reducing Pressure on Housing
Affordability Measures No. 2) Bill 2018
No. , 2018
Schedule 2--Near-new dwelling interests
1
Part 1--Amendments
2
Foreign Acquisitions and Takeovers Act 1975
3
1 Section 4
4
Insert:
5
near-new dwelling acquisition has the meaning given by
6
subsection 113(4A).
7
residential land (near-new dwelling interests) certificate has the
8
same meaning as in the Foreign Acquisitions and Takeovers
9
Regulation 2015.
10
2 Subsection 113(1) (cell at table item 1, column 2)
11
Repeal the cell, substitute:
12
(a) when the application is made; and
(b) for a person who is given an exemption
certificate under section 57 or a
residential land (near-new dwelling
interests) certificate--at the end of
each 6 month period covered by
subsection (2) or (2A).
3 Subsection 113(2) (heading)
13
Repeal the heading, substitute:
14
6 monthly fees for developers
15
4 Subsection 113(2)
16
After "section 57", insert "(the section 57 certificate)".
17
5 After subsection 113(2)
18
Insert:
19
(2A) A person (the developer) who is given a residential land (near-new
20
dwelling interests) certificate must pay a fee for a 6 month period if
21
Near-new dwelling interests Schedule 2
Amendments Part 1
No. , 2018
Treasury Laws Amendment (Reducing Pressure on Housing
Affordability Measures No. 2) Bill 2018
11
there were one or more near-new dwelling acquisitions covered by
1
the certificate during the period.
2
6 Paragraph 113(3)(a)
3
Omit "certificate", substitute "section 57 certificate or the residential
4
land (near-new dwelling interests) certificate (whichever is applicable)".
5
7 Paragraph 113(3)(b)
6
Omit "each", substitute "any".
7
8 Subsection 113(4)
8
Omit "the exemption certificate", substitute "the section 57 certificate".
9
9 After subsection 113(4)
10
Insert:
11
(4A) A near-new dwelling acquisition is an acquisition by a foreign
12
person of a near-new dwelling interest that is covered by the
13
residential land (near-new dwelling interests) certificate given to
14
the developer.
15
Schedule 2 Near-new dwelling interests
Part 2 Application and transitional provisions
12
Treasury Laws Amendment (Reducing Pressure on Housing
Affordability Measures No. 2) Bill 2018
No. , 2018
Part 2--Application and transitional provisions
1
10 Application of amendments
--general
2
Subject to item 11 of this Schedule, the amendments of the Foreign
3
Acquisitions and Takeovers Act 1975 made by Part 1 of this Schedule
4
apply in relation to a near-new dwelling acquisition occurring on or
5
after 1 July 2017.
6
Note:
For the meaning of near-new dwelling acquisition, see subsection 113(4A) of the
7
Foreign Acquisitions and Takeovers Act 1975, as amended by Part 1 of this Schedule.
8
11 Transitional
--certificate given before commencement
9
(1)
This item applies in relation to a near-new dwelling acquisition if the
10
acquisition:
11
(a) occurred on or after 1 July 2017; and
12
(b) is covered by a residential land (near-new dwelling interests)
13
certificate that was given to a person (the developer) 6
14
months or more before the day this item commenced.
15
(2)
The transitional fee period is the period of 12 months beginning
16
immediately after the developer was given the certificate.
17
(3)
Paragraph (b) of item 1 of the table in subsection 113(1) of the Foreign
18
Acquisitions and Takeovers Act 1975, as amended by Part 1 of this
19
Schedule, has effect as if the paragraph required the developer to pay a
20
fee in relation to the certificate at the end of the transitional fee period.
21
(4)
Subsection 113(2A) of the Foreign Acquisitions and Takeovers Act
22
1975, as inserted by Part 1 of this Schedule, has effect as if the
23
reference in that subsection to a 6 month period were a reference to the
24
transitional fee period or any subsequent 6 month period (disregarding
25
the definition of 6 month period in subsection 113(3) of that Act).
26
Additional capital gains discount for affordable housing Schedule 3
No. , 2018
Treasury Laws Amendment (Reducing Pressure on Housing
Affordability Measures No. 2) Bill 2018
13
Schedule 3--Additional capital gains discount
1
for affordable housing
2
3
Income Tax Assessment Act 1997
4
1 At the end of section 115-100
5
Add:
6
; or (e) the percentage resulting from section 115-125 if that section
7
applies to the gain.
8
2 At the end of Subdivision 115-B
9
Add:
10
115-125 Investors disposing of property used for affordable housing
11
Object
12
(1) The object of this section is to increase the discount percentage to
13
the extent that the
*
discount capital gain relates to a
*
dwelling used
14
to
*
provide affordable housing.
15
When this section applies
16
(2) This section applies to a
*
discount capital gain if:
17
(a) you are an individual; and
18
(b) either:
19
(i) you make the discount capital gain from a
*
CGT event
20
happening in relation to a
*
CGT asset that is your
21
*
ownership interest in a
*
dwelling; or
22
(ii) because of section 115-215, Division 102 applies to you
23
as if you had made the discount capital gain for a
24
*
capital gain of a trust covered by subsection (3); and
25
(c) where subparagraph (b)(ii) applies--the trust's capital gain
26
was made directly, or indirectly through one or more entities
27
that are all covered by subsection (3), from a CGT event
28
happening in relation to a CGT asset that is an ownership
29
interest in a dwelling; and
30
Schedule 3 Additional capital gains discount for affordable housing
14
Treasury Laws Amendment (Reducing Pressure on Housing
Affordability Measures No. 2) Bill 2018
No. , 2018
(d) the dwelling was used to
*
provide affordable housing on at
1
least 1095 days:
2
(i) before the CGT event; and
3
(ii) during your, or the relevant trustee's or partner's,
4
*
ownership period of that dwelling; and
5
(iii) on or after 1 January 2018.
6
The days mentioned in paragraph (d) need not be consecutive.
7
Note:
1095 days is the same as 3 years.
8
(3) This subsection covers the following:
9
(a) a trust, other than a
*
superannuation fund or a public unit
10
trust (within the meaning of section 102P of the Income Tax
11
Assessment Act 1936);
12
(b) a
*
managed investment trust;
13
(c) a partnership.
14
Discount percentage
15
(4) The percentage resulting from this section is the sum of:
16
(a) the
*
discount percentage that would apply to the
*
discount
17
capital gain apart from this section; and
18
(b) the result (expressed as a percentage) of subsection (5).
19
(5) Work out the following:
20
*
*
Discount percentage that would apply to
Affordable housing days
the discount capital gain apart from this section
5
Total ownership days
21
where:
22
affordable housing days means the number of days during that
23
*
ownership period (see paragraph (2)(d)) of the
*
dwelling, and on
24
or after 1 January 2018, on which:
25
(a) the dwelling was used to
*
provide affordable housing; and
26
(b) you were neither a foreign resident nor a
*
temporary resident.
27
total ownership days means the number of days during that
28
*
ownership period (see paragraph (2)(d)) of the
*
dwelling, less the
29
number of days after 8 May 2012 during that ownership period that
30
you were a foreign resident or a
*
temporary resident.
31
Additional capital gains discount for affordable housing Schedule 3
No. , 2018
Treasury Laws Amendment (Reducing Pressure on Housing
Affordability Measures No. 2) Bill 2018
15
3 At the end of Part 6-1
1
Add:
2
Division 980--Affordable housing
3
Table of Subdivisions
4
Guide to Division 980
5
980-A Providing affordable housing
6
Guide to Division 980
7
980-1 What this Division is about
8
A dwelling is used to provide affordable housing if certain
9
conditions are met, including that the dwelling is tenanted or
10
available to be tenanted, and that tenancies of the dwelling are
11
exclusively managed by a community housing provider.
12
Subdivision 980-A--Providing affordable housing
13
Table of sections
14
Operative provisions
15
980-5
Providing affordable housing
16
980-10
Eligible community housing providers
17
980-15
Affordable housing certificates
18
Operative provisions
19
980-5 Providing affordable housing
20
A
*
dwelling is used to provide affordable housing on a particular
21
day (the test day) if:
22
(a) on the test day, the dwelling is
*
taxable Australian real
23
property and is
*
residential premises that:
24
(i) are tenanted or available to be tenanted; and
25
(ii) are not
*
commercial residential premises; and
26
Schedule 3 Additional capital gains discount for affordable housing
16
Treasury Laws Amendment (Reducing Pressure on Housing
Affordability Measures No. 2) Bill 2018
No. , 2018
(b) on the test day, the tenancy or prospective tenancy of the
1
dwelling is exclusively managed by an
*
eligible community
2
housing provider; and
3
(c) the eligible community housing provider has given each
4
entity that holds an
*
ownership interest in the dwelling a
5
certificate under section 980-15 that covers the dwelling for
6
the test day; and
7
(d) no entity is entitled to receive an incentive, under the Scheme
8
prescribed for the purposes of Part 2 of the National Rental
9
Affordability Scheme Act 2008, for the dwelling for the
10
NRAS year (within the meaning of that Scheme) that
11
includes the test day; and
12
(e) in the case of a
*
managed investment trust holding an
13
*
ownership interest in the dwelling on the test day--none of
14
the tenants or occupants of the dwelling on that day holds an
15
interest in the trust that passes the
*
non-portfolio interest test
16
at any time during that day.
17
980-10 Eligible community housing providers
18
(1) An eligible community housing provider is:
19
(a) an entity registered (however described) under an
*
Australian
20
law as a provider of community housing services; or
21
(b) an entity registered (however described) by an
*
Australian
22
government agency as a provider of community housing
23
services.
24
(2) However, an entity that ceases to be covered by subsection (1)
25
continues to be an eligible community housing provider for the
26
90-day period starting on the day of the cessation.
27
980-15 Affordable housing certificates
28
For the purposes of paragraph 980-5(c), a certificate must:
29
(a) include a declaration that the
*
eligible community housing
30
provider reasonably believes paragraphs 980-5(a) and (b) to
31
be satisfied for the
*
dwelling for the test day; and
32
(b) be given in the
*
approved form on or before the 31st day after
33
the end of the income year that contains the test day.
34
Additional capital gains discount for affordable housing Schedule 3
No. , 2018
Treasury Laws Amendment (Reducing Pressure on Housing
Affordability Measures No. 2) Bill 2018
17
4 Subsection 995-1(1)
1
Insert:
2
commercial residential premises has the same meaning as in the
3
*
GST Act.
4
eligible community housing provider has the meaning given by
5
section 980-10.
6
provide affordable housing has the meaning given by
7
section 980-5.
8
Taxation Administration Act 1953
9
5 Subsection 355-65(8) in Schedule 1 (at the end of the table)
10
Add:
11
9
an
*
Australian government
agency that administers an
*
Australian law referred to in
paragraph 980-10(1)(a) of the
Income Tax Assessment Act 1997
is for the purpose of administering that
*
Australian law in relation to whether
an entity should be, or should continue
to be, covered by that Australian law in
the way described in that paragraph.
10
an
*
Australian government
agency that registers entities as
described in
paragraph 980-10(1)(b) of the
Income Tax Assessment Act 1997
is for the purpose of determining
whether an entity should be, or should
continue to be, registered as described
in that paragraph.
6 Section 396-55 in Schedule 1 (after table item 9)
12
Insert:
13
9A
an
*
eligible
community housing
provider
the issuing by the provider of a certificate under
section 980-15 of the Income Tax Assessment Act
1997
7 Application of amendments
14
(1)
Section 115-125 of the Income Tax Assessment Act 1997 (as added by
15
this Schedule) applies in relation to CGT events happening on or after
16
1 January 2018.
17
Schedule 3 Additional capital gains discount for affordable housing
18
Treasury Laws Amendment (Reducing Pressure on Housing
Affordability Measures No. 2) Bill 2018
No. , 2018
(2)
Division 980 of the Income Tax Assessment Act 1997 (as added by this
1
Schedule) applies in relation to tenancies starting before, at or after
2
1 January 2018.
3
(3)
The amendment of subsection 355-65(8) in Schedule 1 to the Taxation
4
Administration Act 1953 made by this Schedule applies in relation to
5
records and disclosures of information made at or after the
6
commencement of this Schedule, whether the information was obtained
7
before, at or after the commencement of this Schedule.
8