I sold an apartment back in China — do I have to declare it on my Australian tax return?

The apartment has been sitting there for years. Parents lived in it, or a sibling looked after a tenant, or it simply stayed empty and the family kept paying the fees. This year it finally sold. The proceeds are in an account back home, or part of it has already come across for a deposit here.

Nobody in the family thinks of this as an Australian event. Then someone at dinner mentions that it might belong on your Australian tax return, and the rest of the evening is spent on the phone. What actually decides it has almost nothing to do with the apartment, and almost everything to do with two questions about you.

The first question: what kind of resident you are here

An Australian resident for tax purposes is generally taxed on worldwide income, and that includes capital gains on assets held outside Australia. A foreign resident is taxed only on Australian-sourced income and on capital gains from taxable Australian property — real estate here, business assets here. So if you were not an Australian tax resident when the sale contract was signed, an overseas apartment sits outside the Australian net.

In between the two sits a category that catches a lot of people by surprise, in a good way. You are a temporary resident if you hold a temporary visa and neither you nor your spouse is an Australian resident within the meaning of the Social Security Act 1991 — in plain terms, neither of you is a citizen, a permanent resident, or a protected New Zealand Special Category visa holder. Temporary residents only declare Australian income, capital gains on taxable Australian property, and in some circumstances income from work performed overseas. The ATO puts the rest plainly: other foreign income and capital gains on property that is not taxable Australian property don't have to be declared. Its own worked example is a temporary resident who is also an Australian resident for tax purposes and sells a house in New Zealand — she does not declare the gain.

There is a one-way door in this. If at any time after 6 April 2006 you were an Australian resident without being a temporary resident, you cannot become a temporary resident again later, even if you subsequently hold a temporary visa. So a student or 482 holder who has never held permanent residency is in a very different position from someone who took out citizenship in 2019 and is now back on a temporary visa.

The second question: what it was worth the day you landed in the system

This is the part that changes the number most, and it is the part people have never heard of. When you become an Australian resident for tax purposes — and are not also a temporary resident from that point — you are taken to have acquired your CGT assets on that same day, at their market value. The ATO calls it deemed acquisition. It does not apply to assets you acquired before 20 September 1985, or to taxable Australian property, which keeps its normal cost base.

The practical effect is that the gain the ATO is interested in is not the difference between what your family paid for the place in, say, 2008 and what it sold for this year. It is the difference between its market value on the day you became a resident here and what it sold for. Years of growth that happened before you arrived are simply outside the calculation. In some cases the result is a much smaller gain than people fear, and occasionally a capital loss.

That only works if you can show the two things it rests on: the date you became a resident, and what the property was worth on that date. A valuation, a written appraisal, or documented comparable sales from around that time are the kind of evidence that survives a question years later; a number remembered at the kitchen table is not. If you became a resident recently and still own property overseas, getting that value recorded now is far easier than reconstructing it after a sale.

Two mechanical points sit on top. Everything — sale price, cost base, foreign tax paid — has to be converted to Australian dollars before it goes in the return, and there are rules about which exchange rate applies; since 1 January 2020 the ATO has used Reserve Bank of Australia rates. Because the two ends of the calculation are converted at different times, a currency move on its own can enlarge or shrink an Australian gain even when the price in the local currency barely moved. And the 50% CGT discount is available where you owned the asset for at least 12 months and are an Australian resident for tax purposes — with the CGT event happening on the date of the contract, not on settlement.

Three things people assume, and what the rules say

The first is that leaving the money overseas keeps it out of the Australian system. What triggers capital gains tax is the disposal, not the transfer of funds. Separately, under the Common Reporting Standard the ATO receives financial account information on Australian residents from other countries' tax authorities — the legislation received royal assent on 18 March 2016, took effect on 1 July 2017, and the first exchange of information happened in 2018. The account the proceeds landed in is a financial account like any other.

The second is that tax already paid overseas closes the matter here. It usually helps, but not by way of exemption. The foreign income tax offset gives relief from double tax by reducing the Australian tax payable on income you have included in your Australian return, and it is non-refundable. If the total foreign tax you paid during 2025–26 does not exceed $1,000, you can simply claim the amount you paid. Above $1,000 you either work out your offset limit properly or claim $1,000 — and if you claim only $1,000, the rest of that year's foreign tax cannot be claimed in a later year.

The third is that the place was the family home, so it must be exempt. The main residence exemption is written around an Australian resident's home, and the ATO is direct about the gap: if you weren't a resident of Australia for tax purposes while you were living in the property, you are unlikely to satisfy the requirements for the main residence exemption. A home lived in for years before anyone in the family had an Australian visa generally does not carry an Australian exemption across with it.

One date worth knowing about if you haven't sold yet

For assets still held, the method itself changes. Under the Treasury Laws Amendment (Tax Reform No. 1) Act 2026, the 50% CGT discount is replaced by cost base indexation from 1 July 2027, with assets held on 30 June 2027 treated as sold and re-acquired on 1 July 2027 so that gains accrued before and after that date are worked out separately. The ATO has confirmed the capital gains tax changes announced in the 2026–27 Federal Budget do not apply to Tax Time 2026. Overseas property is a CGT asset like any other, so it sits inside that transition too.

This is general information current as at August 2026, not advice about your situation, and the answer genuinely turns on facts that differ from household to household — visa history, the date residency started, whose name the title was in. If a sale has already happened, the useful next step is to gather the contract date, the sale price, the foreign tax receipts, and whatever evidence exists of the property's value when you became a resident here, before the return is prepared rather than after. If it hasn't happened yet, the value evidence is the piece worth locking down now. Working out what belongs in an Australian return when part of your life is still financially anchored overseas is a routine part of what our individual tax return service deals with, and the income tax calculator will show what an added capital gain does to a year's tax at this year's rates.