Foreign Investment Property Tax Return

If you hold real estate assets or any such assets outside of Australia you are required to notify the Australian Tax Office (ATO) by including this information in your tax return.Additionally, if you maintain an investment property overseas and receive rental income, then you are required to include the foreign rental income in your Australian Tax Return.  Foreign rental income includes the total rent collected and other incomes related to the renting out of the investment property.

As an Australian resident for tax purposes, it is important to be aware of your tax obligations to the ATO. While completing your tax return, you must ensure that all mandatory questions regarding Foreign Income Sources and Assets have been answered correctly, this is true for a Foreign investment property tax return too.

Foreign investment property tax returns are complex since you need to factor in different currency rates, financial year dates, taxation laws and languages of different countries. Records such as foreign income tax returns and source documents for the incomes must be retained at all times. Receipts related to the deductions towards foreign income must also be maintained.

Some Common Deductions for Foreign Investment Property Tax Returns include:

  • Mortgage Interest
  • Repairs and Maintenance costs to the property
  • Insurances
  • Government fees and charges
  • Property management fees if applicable.

Foreign Investment property and CGT:

Many people are aware that their Australian based investment properties are subject to Capital Gains Tax when sold. However, many taxpayers neglect the fact that their foreign investment properties are also treated the same, meaning that both are assessed for Capital Gains Tax (CGT) purposes. This means that if you sell an overseas investment property, you could be liable for CGT in Australia. There is some good news however; presuming that all taxes are also paid overseas upon the sale of the real estate, the amount of tax paid overseas would offset any tax payable in Australia. The offsetting of overseas tax paid is a measure adopted by the ATO to avoid double taxation on foreign income for Australian tax payers.

Having an accountant who understands foreign investment property taxes in Australia is important for you to pay the right tax. We are here to assist you and simplify this process for you. Give us a call today on 03 8609 1889 or email us on and one of our friendly staff will be able to assist you with your queries.

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