Understanding Taxable vs Non-Taxable Australian Property for Australian Expats (TAP vs Non-TAP)

If you’re an Australian Expat living overseas, understanding the differences between Taxable Australian Property (TAP) and Non-Taxable Australian Property (Non-TAP) is essential to assessing investment opportunities and managing Capital Gains Tax (CGT).

In this guide, we’ll break down what the Australian Tax Office (ATO) considers Taxable Australian Property (TAP), Non-taxable Australian Property (Non-TAP), and why these distinctions matter for investment planning and CGT obligations. Whether you’re selling property, managing shares, or investing through trusts or companies, understanding these rules will help you make smarter financial decisions as an Australian Expat.

For your convenience, this guide is also available as a downloadable, print-friendly PDF.

How Are My Assets Classified as an Australian Expat?

For Australian Expats who are non-resident for tax purposes, the ATO classifies your Australian assets into two main categories:

1.       Taxable Australian Property (TAP)

2.       Non-Taxable Australian Property (Non-TAP)

The classification of your assets directly affects your CGT obligations at the time of sale. Knowing whether an asset is TAP or Non-TAP is critical to planning your finances and minimising tax liabilities.

What Counts as Taxable Australian Property (TAP)?

TAP assets are generally subject to CGT in Australia, no matter where you live. Common examples of TAP include:

• Australian real property: Houses, apartments, commercial buildings, and land.

• Indirect interests in Australian property: For example, ownership in a company or trust that holds Australian real estate.

• Mining, quarrying, or prospecting rights in Australia.

• CGT assets used to carry on a business in Australia.

• Options or rights over TAP assets: Such as contracts to purchase property off the plan.

Essentially, if your asset has a direct or indirect connection to physical property or business operations in Australia, it is likely TAP.

What Counts as Non-Taxable Australian Property (Non-TAP)?

Non-TAP assets are generally treated differently for CGT purposes where the owner is a non-resident for Australian tax purposes. Examples of Non-TAP include:

• Cash and foreign currency

• Australian direct shares

• Exchange-traded funds (ETFs)

• Managed funds

• Real Estate Investment Trusts (REITs)

• Listed Investment Companies (LICs)

• Cryptocurrencies

These assets are typically exempt from CGT in Australia for non-residents, making them an attractive option for Australian Expats looking to invest without ongoing Australian CGT implications.

How TAP vs Non-TAP Assets Are Treated for CGT

Understanding taxable vs non-taxable Australian property for Australian Expats helps clarify your CGT obligations:

TAP assets: Always subject to CGT in Australia, regardless of whether you are a resident or non-resident for tax purposes.

Non-TAP assets: If you become a non-resident, most non-TAP assets you acquire and dispose of after leaving Australia are exempt from Australian CGT.

There are special rules for Non-TAP assets you owned before becoming a non-resident under the deemed disposal provisions. An individual is generally considered to have “deemed disposed of” their Non-TAP assets for CGT purposes at their market value upon ceasing Australian tax residency. This ensures CGT is accounted for even if you remain invested in these assets.

You also have the option to not apply deemed disposal rules, meaning your non-TAP assets remain TAP and subject to CGT at the time of eventual sale. This choice can have significant implications for long-term planning, so careful consideration is required.

To learn more about the Deemed disposal provisions, check out our dedicated blog here: deemed disposal provisions.

Why Understanding TAP vs Non-TAP Matters

As an Australian Expat, understanding the distinction between TAP and Non-TAP can:

• Help you plan the timing of asset disposals to minimise CGT.

• Ensure compliance with ATO reporting obligations.

• Provide opportunities to invest in non-TAP assets like shares or ETFs without a CGT liability in Australia.

• Protect you from unexpected tax bills or missed exemptions.

Getting Professional Advice

Australian tax laws for Expats are complex. Seeking guidance from a tax professional or Financial Adviser who specialises in Australian Expats is critical. They can help you classify your assets correctly, navigate the deemed disposal rules, and make informed investment decisions that optimise your tax position.

By understanding taxable vs non-taxable Australian property for Australian Expats, you’ll be in a stronger position to protect your wealth and make strategic financial choices while living abroad.

Conclusion

Navigating the rules around taxable vs non-taxable Australian property for Australian Expats is a key part of managing your finances as an Expat. By correctly identifying which of your assets are TAP or Non-TAP, you can reduce the risk of unexpected CGT liabilities, take advantage of exemptions, and make smarter investment decisions.

Whether you’re selling property, holding shares, or investing through funds, planning ahead and seeking professional advice can ensure you stay compliant with the ATO while optimising your financial position. Understanding these classifications is not just about taxes; it’s about giving yourself clarity, control, and confidence over your Australian investments, no matter where in the world you live.

Runway Wealth Management is the trusted Financial Adviser to the Australian Expat community. Our tailored advice is backed by expertise, education and experience, which allows us to be at the forefront of Australian Expat Financial Planning.

If you would like to speak to one of our Expat Financial Advisers about this blog or if you have other queries, we would be more than happy to speak with you. Feel free to send us an enquiry through the ‘Contact Us’ tab provided in the below link:

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General Advice Disclaimer: The information contained herein is of a general nature only and does not constitute personal advice. You should not act on any recommendation without considering your personal needs, circumstances, and objectives. We recommend you obtain professional financial advice specific to your circumstances.