Selling Your Australian Home After Moving to Hong Kong: How the Main Residence Exemption Is Lost
If you move to Hong Kong and later sell your Australian home while you are a foreign resident for Australian tax purposes, the main residence exemption is generally lost unless the life events test is met. The ATO says there is no partial or apportioned exemption either, and the purchaser must withhold 15% of the sale price unless the seller has a clearance certificate. The facts below were checked on 2026-10-10 against official ATO and IRD pages.
Does the main residence exemption still apply after I move overseas?
The ATO states that foreign residents cannot claim the CGT main residence exemption for property sold after 30 June 2020, unless they satisfy the life events test. If you are a foreign resident when you dispose of the property and do not meet that test, you get no main residence exemption at all. This applies even if you lived in the home as an Australian resident for part of the ownership period. The ATO also says there is no “home first used to produce income” rule in this situation.
What counts is your residency at the time of disposal. The ATO sets out the timing like this:
| Situation | When the disposal happens |
|---|---|
| You sell under a contract | When you enter into the contract |
| There is no contract | When you settle |
If you are still an Australian resident at the time of disposal, the foreign resident rule does not affect you. The one exception the ATO lists is where you acquired the property because a foreign resident died. Whether you are an Australian resident is decided on facts and circumstances under the ATO residency tests. Moving overseas or holding a Hong Kong visa does not settle that question by itself.
What is the life events test?
The ATO’s life events test has two parts, and both must be true. The table below sets them out.
| Part | What the ATO says must be true |
|---|---|
| 1. Length of foreign residence | You were a foreign resident for a continuous period of 6 years or less |
| 2. Life event | During that period, one of these occurred: you, your spouse or your child under 18 had a terminal medical condition; your spouse or your child under 18 died; or the CGT event happened because of a formal agreement following the breakdown of your marriage or relationship |
The ATO applies the same rules to the deceased estate of a person who was a foreign resident at death.
Does the six-year absence rule keep my home exempt?
The ATO’s six-year absence rule is a separate concept for Australian residents. If you are an Australian resident and move out of your home temporarily, you can keep treating it as your main residence for up to 6 years if you rent it out. If you do not rent it out, the ATO says the period is unlimited.
The ATO explains that this rule sits alongside the foreign resident rule. For the exemption, what matters is being an Australian resident at the time of disposal. The ATO page does not say how the two rules interact beyond that point, so check your own position with an adviser.
What happens to the 15% withholding when I sell?
The ATO states that from 1 January 2025 a 15% rate applies to the value of all Australian real property sold, and there is no minimum price threshold. The table below summarises the main points.
| Item | What the ATO says |
|---|---|
| Rate | 15% of the sale price, applying to all Australian real property sold on and after 1 January 2025 |
| Threshold | None |
| Who withholds | The purchaser, if the seller has no clearance certificate |
| Clearance certificates | Issued to Australian residents; valid for 12 months from issue; each owner on title needs their own |
| Lower rate | A foreign resident seller can apply for a variation to reduce the rate, for example where the tax owed will be less than 15% of the price |
| Final tax | The amount withheld is not the final tax; it is claimed as a credit when the seller lodges the return for the year the contract was signed |
If the exemption is lost, is there a discount on the gain?
The ATO says the full 50% CGT discount is generally not available to foreign and temporary residents for assets acquired after 8 May 2012. An apportioned discount may be available for the part of the ownership period when you were an Australian resident. If you acquired the home after 8 May 2012 and sell after becoming a foreign resident, the ATO says the full discount does not apply, but the apportioned discount may.
Leaving Australia does not by itself mean the home is treated as sold. The ATO says taxable Australian property, which includes real estate in Australia, is not deemed disposed of when you stop being a resident. Foreign residents remain subject to Australian CGT on it.
What if I keep renting the home out?
The ATO states that rent from Australian property remains Australian-source income for a foreign resident. It is taxed at foreign resident rates, and it is not covered by the final withholding that applies to interest, dividends and royalties. The rates themselves are not set out in the ATO pages checked for this article, so read the rates information on the ATO site directly.
The official pages checked do not cover Australian state land tax or absentee owner surcharges. Check those with the relevant state revenue office.
Are the gains on my home taxed in Hong Kong?
The IRD pages checked describe salaries tax as charged on income from an office, employment or pension. Those pages do not describe a general capital gains tax on individuals’ investment gains, so the only point this article makes is that the Hong Kong pages checked list no such tax. Hong Kong’s year of assessment runs from 1 April to 31 March. Hong Kong property stamp duty rates are not stated on the official page checked.
Individual cases need a registered tax agent in Australia or a qualified Hong Kong tax adviser. This article is general information only and does not tell you which choice to make.
Frequently asked questions
Can I claim the main residence exemption if I sell after moving to Hong Kong?
Only if you meet the ATO life events test, or if you were still an Australian resident when you disposed of the property. Otherwise the ATO says you get no main residence exemption, and no partial exemption applies.
Does a Hong Kong visa make me a non-resident for Australian tax?
No. The ATO says residency is decided on facts and circumstances under its tests. Holding a Hong Kong visa does not automatically make you a non-resident.
What is a clearance certificate and who can get one?
The ATO says a clearance certificate is issued to Australian residents. Without one, the purchaser must withhold 15% of the sale price and pay it to the ATO. A certificate is valid for 12 months from issue, and each owner on title needs their own.
When is the disposal time for a home sold under contract?
The ATO says the disposal time is when you enter into the contract. If there is no contract, the disposal time is when you settle.
Does Hong Kong tax the gain on my home sale?
The IRD pages checked describe salaries tax and do not describe a general capital gains tax on individuals’ investment gains. Ask a qualified Hong Kong tax adviser about your own situation.
Sources
All pages below were checked on 2026-10-10.