Selling a property in Europe and tax implications in Australia

[againsthegrain]

As the title says, I am thinking about selling a property that is in my name in Europe, sometime in the next year or 2.

At the moment obviously covid has put a freeze on things so I am just doing alot of thinking and planning.

This property has been in my family since the 70s. It was transferred to me over 10 years ago on paper but my relatives have been living in it as with no changes as it was their own ppor. Paying rates etc.

Basically on paper it was in my name but that is all.

Anyway circumstances changed now, nobody is living in it and nobody will.

I could rent it, but its not worth the trouble, well im not a 100% what I want to do hence this thread.

When the day comes obviously I will go to a good accountant but I before I do that I am interested in any experiences from similar situations.

- has been in my name over 10 years
- never rented out
- family lived there and took care of all the expenses and bills

* I do not own property in aus

If I sell it in Europe, do a international transfer to my bank or better yet ask the buyer to pay direct into my aus bank how will this be seen by the ato.

I guess there is 2 obvious things I do

1. accept the transfer in my aus bank and do nothing
2. declare the sale/incoming money to ato/bank

anybody been in a similar situation here, if so how did it work out?

 

[qldfrog]

As the title says, I am thinking about selling a property that is in my name in Europe, sometime in the next year or 2.

At the moment obviously covid has put a freeze on things so I am just doing alot of thinking and planning.

This property has been in my family since the 70s. It was transferred to me over 10 years ago on paper but my relatives have been living in it as with no changes as it was their own ppor. Paying rates etc.

Basically on paper it was in my name but that is all.

Anyway circumstances changed now, nobody is living in it and nobody will.

I could rent it, but its not worth the trouble, well im not a 100% what I want to do hence this thread.

When the day comes obviously I will go to a good accountant but I before I do that I am interested in any experiences from similar situations.

- has been in my name over 10 years
- never rented out
- family lived there and took care of all the expenses and bills

* I do not own property in aus

If I sell it in Europe, do a international transfer to my bank or better yet ask the buyer to pay direct into my aus bank how will this be seen by the ato.

I guess there is 2 obvious things I do

1. accept the transfer in my aus bank and do nothing
2. declare the sale/incoming money to ato/bank

anybody been in a similar situation here, if so how did it work out?

first is there a treaty between that european country and australia, will you pay taxes in europe, can you choose either etc.
If you did not pay for it, in australia, that property was gifted so you will have to pay CGT between value then and now

But gifts are not legal in some European countries; for example in France this would not be allowed and some tax would have occurred at the change of title.if not done right then then fines, penalties , and interests compounded over 10y.
It could be a nightmare
just be aware it will be a mess in any of the socialist countries where the local ato will want it all before even handing over to our own vultures
Expect the worst, try to find a good professional help there first then a good professional here

 

[againsthegrain]

first is there a treaty between that european country and australia, will you pay taxes in europe, can you choose either etc.
If you did not pay for it, in australia, that property was gifted so you will have to pay CGT between value then and now

But gifts are not legal in some European countries; for example in France this would not be allowed and some tax would have occurred at the change of title.if not done right then then fines, penalties , and interests compounded over 10y.
It could be a nightmare
just be aware it will be a mess in any of the socialist countries where the local ato will want it all before even handing over to our own vultures
Expect the worst, try to find a good professional help there first then a good professional here

Thanx for the answer, essentially now covid has really pushed back my plans. I haven't been thinking about this property or what to do with it. They keep saying on the news travel won't be open till 22 and even then probably a vaccine will be mandatory etc. Im not to keen on being forcefully injected so might be a while until anything happens with this.

 

[qldfrog]

Thanx for the answer, essentially now covid has really pushed back my plans. I haven't been thinking about this property or what to do with it. They keep saying on the news travel won't be open till 22 and even then probably a vaccine will be mandatory etc. Im not to keen on being forcefully injected so might be a while until anything happens with this.

It might be worthwhile to prepare this, you have things like annual limits, might be worthwhile to make a donation again from you to family member to become part of inheritance,etc.will not help to brush the issue under the carpet, we might be talking $100000s of potential savings/ losses, for example death duty can be 50pc or above in some countries.
You might save years of income here and there is no need for physical presence.my 2c.

 

[jbocker]

for example death duty can be 50pc or above in some countries.

...no wonder they look after their old folk; milk the inheritance while they are alive, whereas with no death tax 'they' dont get it till you have carked it. Does this explain the cultural differences dealing with the elderly?? Now be nice to poppy.
(ok taking the pis-aside..)
This sounds like a potentially very complex issue, along with the tax issues there would be potentially others with their hand out dealing with assets in another country. Particularly the deceased and I am not saying that is the case here, but does raise the question if the 'most unfortunate event' should happen to you in the meantime @againsthegrain. Sorry Probably another thread question.
I know in Australia there are taxes now applicable to foreign owners that sell property in Australia, I daresay that would be the case elsewhere. But as you are the owner and never claim costs bank interest rents etc with the ATO, I would think it would not be subject to any investment taxes here like CGT. If I recall rightly I think there is a section in tax returns for selling property overseas, there would notes for assistance there.

Only European experience (Greece) I know of is a parcel of rural land that was resumed by (?) for lack of owner not identifying themselves - may have been claimed by some other relative. So advice would be to ensure you keep in touch particularly if left vacant.

 

[qldfrog]

...no wonder they look after their old folk; milk the inheritance while they are alive, whereas with no death tax 'they' dont get it till you have carked it. Does this explain the cultural differences dealing with the elderly?? Now be nice to poppy.
(ok taking the pis-aside..)
This sounds like a potentially very complex issue, along with the tax issues there would be potentially others with their hand out dealing with assets in another country. Particularly the deceased and I am not saying that is the case here, but does raise the question if the 'most unfortunate event' should happen to you in the meantime @againsthegrain. Sorry Probably another thread question.
I know in Australia there are taxes now applicable to foreign owners that sell property in Australia, I daresay that would be the case elsewhere. But as you are the owner and never claim costs bank interest rents etc with the ATO, I would think it would not be subject to any investment taxes here like CGT. If I recall rightly I think there is a section in tax returns for selling property overseas, there would notes for assistance there.

Only European experience (Greece) I know of is a parcel of rural land that was resumed by (?) for lack of owner not identifying themselves - may have been claimed by some other relative. So advice would be to ensure you keep in touch particularly if left vacant.

And with squatters a disaster in waiting so imho, sell asap and get some cash.
It can be sold and existing residents living in it till death occurs in some places

 

[againsthegrain]

And with squatters a disaster in waiting so imho, sell asap and get some cash.
It can be sold and existing residents living in it till death occurs in some places

Its a long story and bit complex, in a nutshell there is alot of possessions from my family that passed away and simply can't be binned and property sold off by a 3rd party.

Just very unlucky and bad timing with world events, I don't want to gamble on getting stuck with no flights back to aus for weeks or even months too.

Somebody is looking after it and checking up, however this won't last forever

Stuck between a rock and a hard place

 

[jbocker]

Its a long story and bit complex, in a nutshell there is alot of possessions from my family that passed away and simply can't be binned and property sold off by a 3rd party.

Just very unlucky and bad timing with world events, I don't want to gamble on getting stuck with no flights back to aus for weeks or even months too.

Somebody is looking after it and checking up, however this won't last forever

Stuck between a rock and a hard place

Do you have a relative who needs an extended holiday?
I have ... but YOU have to ask her.

Seriously, squatters would be a nightmare could your friend move in?

 

[againsthegrain]

Do you have a relative who needs an extended holiday?
I have ... but YOU have to ask her.

Seriously, squatters would be a nightmare could your friend move in?

I have thought of that, but it might create more problems down the road. Getting a relative in is easy, getting them out and keeping good terms could be a different story. Like running a business with a best friend, can work or can lose it all