It is expected to be put to the Senate next week, before Parliament rises for the Christmas break.

'Retrospective denial'

Tax expert Robyn Jacobson has campaigned against the plan.

She said the practical effect was a retrospective denial of the exemption as far back as the start of CGT in September 1985.

"The Senate committee expressed concerns about the retrospectivity," Ms Jacobson said.

"What they're missing is that when calculating the capital gain under these rules, you're actually going back to the cost base as far back as '85. That point is being lost on the government."

Ms Jacobson, a senior trainer at TaxBanter, said records dating back decades would be required.

"These amendments will require people to establish four things: what they originally paid for it, their acquisition costs, their holding costs like interest and council rates, and cost of improving their family home," she said.


"It's relying on people keeping meticulous records. You can't make numbers up, so if you can't determine them, we could end up with larger taxable gains than should be the case."

She called on the Greens, Senate crossbenchers and Labor to understand the full implications of the bill before voting for it.

Tax Institute senior tax counsel Bob Deutsch remains opposed.

"There is no legitimate policy reason for denying Australian citizens the CGT main residence exemption in these circumstances.

"No one envisaged that policy would catch an Australian citizen and tax resident of decades in the net and entirely deny them the main residence exemption if they decided to retire, take up tax residency outside Australia and then sell their Australian home,” Professor Deutsch said.

“The solution to this problem lies in apportionment. It is the fairest, simplest and the most consistent way to implement the original policy intent in the budget."

Atlas Wealth Management managing director Brett Evans said many Australians did not know they faced big new tax liabilities.

"There will be a vast number of Australian expats who get caught up in these changes simply because they were not aware and were operating under the belief that the existing six-year temporary absence rule was still in affect," Mr Evans said.

"In our daily discussions with Australian expats, apart from those who follow our social media channels, very few people are aware of what has been proposed and the fact that they will lose the ability to claim the main residence exemption, even for the period where they resided in Australia."