# Tax on property selling



## HAMEEDI (Jan 16, 2018)

Hi,
I having a PR in Australia and planning to move to australia.
I have live and worked in UAE for several year and i am pakistani national. During these years i have bought some properties in Pakistan , since i am moving to Australia some people are suggesting to me to sell the property and take the money with me when i move to Australia. 
My question is if i do not sell these properties before moving and go to Australia and live there for some time and then decide to sell those properties and bring the money to Australia , do i need to pay any tax on the money that i will bring by selling the property. The reason is i do not want to sell these properties now .


Thanks and Regards
Hameed


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## omtatsat (Feb 12, 2021)

HAMEEDI said:


> Hi,
> I having a PR in Australia and planning to move to australia.
> I have live and worked in UAE for several year and i am pakistani national. During these years i have bought some properties in Pakistan , since i am moving to Australia some people are suggesting to me to sell the property and take the money with me when i move to Australia.
> My question is if i do not sell these properties before moving and go to Australia and live there for some time and then decide to sell those properties and bring the money to Australia , do i need to pay any tax on the money that i will bring by selling the property. The reason is i do not want to sell these properties now .
> ...


Well if you are declared an Austraian resident for tax purposes then you will have to declare all your assets including that in Pakistan. But I dont think you would have to pay any tax in Australia on it. But the Pakistanis will probably tax you on the sale. Better you speak to a tax consultant


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## Moulard (Feb 3, 2017)

omtatsat said:


> But I dont think you would have to pay any tax in Australia on it.


This is not necesarily correct.

Once you are a tax resident of Australia, you are taxed on your global global income.

Australian CGT wll apply when you sell the property if you acquired it on 20 September 1985 or after.

I am pretty sure that the basis for the gain will be the value of the property at the time you first became a tax resident of Australia.

As the sale will generate Pakistani sourced income, Pakistan will also have the right to tax the income according to domestic law.

The double taxation that results, will be addressed in the Australia - Pakistan tax treaty.

I am not familiar this treaty, but what normally happens is that the country where real property is located will have the primary right to tax.

Australia will offer you a tax offset for Pakistani taxes paid on the income generated.

However....

Following a recent ruling in the AAT, because Australia only taxes 50% of the capital gain when you are a tax resident, you wold only be able to claim 50% of the Pakistani taxes for the foreign tax offset.


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## omtatsat (Feb 12, 2021)

Moulard said:


> This is not necesarily correct.
> 
> Once you are a tax resident of Australia, you are taxed on your global global income.
> 
> ...


THere are such things as tax agreements between countries which prevent double taxing. Not sure if Pakistan is one of those countries


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## Moulard (Feb 3, 2017)

omtatsat said:


> THere are such things as tax agreements between countries which prevent double taxing. Not sure if Pakistan is one of those countries


Yeah.. I didn't do it at the time, but I just checked the list of income tax treaties and Pakistan isn't on the list.

But I don't think that fundamentally changes things.


Pakistan can tax the income generated from the sale of the property according to their interal tax laws.
Australia can tax the income on the basis of the poster being a tax resident of Australia
So long as the Pakistani tax is an income tax and the tax has been paid or deemed to have been payed by the OP then the foreign income tax offset will be available.
I mentioned the tax treaty in part because if a treaty is in place its terms could override or limit what was available in terms of the tax offset.









Guide to foreign income tax offset rules 2020


If you have paid foreign tax on income you received from outside Australia, this guide will help you claim a foreign income tax offset.




www.ato.gov.au


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