The Government has worked to put pressure on foreign ownership of Australian real estate since the levy was introduced in 2016.\rBelow are changes to foreign property ownership that the Government proposed in the Federal Budget 2017.\rCGT exemption scrapped\rPreviously, foreign residents were subject to Capital Gains Tax (CGT) (withholding tax) of 10% when they sold their own residential home (not an investment). However, this only applied to properties worth $2 million or more.\rSince 1 July 2017, a foreign resident capital gains withholding (FRCGW) of 12.5% now applies to foreign residents who sell a property worth $750,000 or more.\rThis change will affect many foreign investors buying in Sydney and Melbourne metro areas since the median house price is much higher than $750,000.\rTo be clear, this rule applies to all foreign residents so it also captures Australian citizens, permanent residents and New Zealand citizens who are foreign residents at the time they sell their property. Specifically, this is the date in which you enter a sales contract with a buyer.\rYou may still be able to qualify for the exemption, such as resuming Australian tax residency prior to selling the property, so please speak to an accountant for advice.\rRestriction on new developments\rThe Government placed a 50% cap on foreign ownership of new developments.\r\rGhost tax\rThe so-called ghost tax is a minimum $5,000 per year levy for property they either fail to occupy or lease out for at least six months of the year.