{"id":5958,"date":"2020-07-15T08:00:38","date_gmt":"2020-07-15T00:00:38","guid":{"rendered":"https:\/\/www.infinitysolutions.com\/?p=5958"},"modified":"2022-05-05T12:20:52","modified_gmt":"2022-05-05T04:20:52","slug":"australian-expats-investing-in-property","status":"publish","type":"post","link":"https:\/\/www.infinitysolutions.com\/blog\/australian-expats-investing-in-property\/","title":{"rendered":"2020 Tax Planning For Australian Expats: Investing In Property"},"content":{"rendered":"<p data-pm-slice=\"1 1 []\">In our June 2020 webinar on tax planning for Australian expats, Matt Heron, General Manager of Global Operations at SMATS Group, offered four top tips on property investment for Australians living overseas.<\/p>\n<h4><strong>Four top tips on property investment for Australian expats<\/strong><\/h4>\n<h5><strong>Use &#8216;negative gearing&#8217; \u2013 expat style<\/strong><\/h5>\n<p>If an Australian property asset costs you more than it earned in the tax year, you can accumulate taxation credits to use against future income or to offset future capital gains tax after you return to Australia.<\/p>\n<p>That is why SMATS Group encourages Australian expats not to reduce their debt on an investment property while living abroad but to keep debt as high as possible in order to accumulate these valuable tax credits. Instead, expats should focus on repaying other debts or investing in alternative vehicles overseas. Adopting this strategy over a five to 10-year stint overseas could mean having very little tax implications in the year(s) following a return to Australia.<\/p>\n<h5><strong>Invest in an Australian home NOW<\/strong><\/h5>\n<p>Don&#8217;t wait until you move back to Australia to acquire your future home but take advantage of the excellent opportunity many expat packages afford to maximise your borrowing potential. If you are lucky to have education, accommodation and transport benefits, these are taken into account when working out how much you can borrow, increasing your buying power. Get a deposit together and invest now but make sure you plan ahead to find the home that will suit you five to 10 years down the line when your family situation may be different, and you may have a partner and children to accommodate.<\/p>\n<p>Furthermore, many expenses on your property that are generating rent may well be tax-deductible, meaning Australian expats can utilize deductions to offset their taxable income and decrease their tax payable in Australia.<\/p>\n<h5><strong>Location matters!<\/strong><\/h5>\n<p>Whether you are looking for your future home or an investment property, go for the best location \u2013 and quality \u2013 that you can afford in the state or city where you intend to live. New properties offer more depreciation allowances than old.<\/p>\n<h5><strong>Know your boundaries<\/strong><\/h5>\n<p>Don&#8217;t go in over your head and make sure that you can afford the property you are buying and that it aligns with your personal situation. Look at the purchase within the context of your overall financial position and plan and get professional financial advice to ensure that you fully understand the lending and tax implications of any purchase.<\/p>\n<p>If and when the time comes to return home, you will need to review your property investments and how you approach your financial planning. If you plan to relocate to Australia in the next few years, you will find lots of useful information in this post.<\/p>\n<p>Living and working in Asia often provides a golden opportunity for Australian expats to put in place a sound financial plan and build wealth for the future, but in order to maximise the opportunities on offer, it is crucial to seek professional advice! You can discuss any of the above points with your financial adviser, who will put you in touch with the relevant contacts at SMATS Group for more specialist financial advice if it is required. If you don&#8217;t have a financial advisor,\u00a0<a href=\"https:\/\/infinitysolutions.com\/contact\" target=\"_blank\" rel=\"noopener noreferrer\"><u>contact us<\/u><\/a>\u00a0for a free initial consultation.<\/p>\n<p><em>Infinity would like to thank Matt Heron and Pau Lam for the information provided during this webinar. The SMATS Group is an international leader and provides Australian \ufb01nance, taxation, and property investment services to Australian expatriates, intended migrants, and foreign investors. The SMATS Group is exceptionally diverse in their range of services, accessibility, global experience and expertise. Please note that this information is of a general nature. Always seek advice from a professional relating to your individual circumstances before making major financial decisions.<\/em><\/p>\n<h3><strong>Investment Planning<\/strong><\/h3>\n<p>Some of the primary reasons most expats decide on living and working overseas is because of the benefits being a tax resident of another country entails. Furthermore, Australian expats often receive better personal insurances, higher salaries, and a broad range of retirement planning options.<\/p>\n<p>Therefore, investment planning is key to sustainable wealth management and growth for any Australian expat looking to reach their financial goals.<\/p>\n<p>Included in the key issues that Australian expats encounter are dealing with adverse currency movements and navigating the best tax regimes that work in their best interests.<\/p>\n<p>When Australians living abroad return to their home country, they need to understand the tax implications involved in becoming subject to global tax again, as well as comprehend which strategies might be favourable for tax purposes.<\/p>\n<p>An age-old question of Australian expats is if they should contribute to their superannuation after moving overseas. There could potentially be great tax advantages available on expats&#8217; contributions to their superannuation as well as on other future investment returns of any money and disposable income allocated to superannuation. This could be a wise move toward a comfortable retirement.<\/p>\n<h3>Tax Resident and Tax obligations<\/h3>\n<p>It is crucial to know in which country you are a tax resident in order to execute effective tax planning.<\/p>\n<p>The criteria for establishing whether you are a tax resident or non-resident for tax purposes varies between jurisdictions. Some of the general tests that countries often use to resolve this matter includes:<\/p>\n<h5>The Physical Presence Test<\/h5>\n<p>There is often a number-of-days rule used to assess residency. For example, residing in a country for longer than 180 days of a given tax year may qualify you as a tax resident of a country.<\/p>\n<h5>The Permanent Home Test<\/h5>\n<p>Various factors may be taken into consideration. These factors include but aren&#8217;t limited to property ownership, employment, utility bills, fixed-term deposits, bank accounts, non-financial interests, or family interests like where your children, spouse, or loved ones currently live.<\/p>\n<h5>Country of Domicile and Nobad Rule<\/h5>\n<p>A tax nomad defines a person who is not a tax resident of any particular country, essentially not being subjected to overseas tax. A tax nomad is often reverted back to tax residency of their country of domicile. For Australian expats, this would mean you are subject to worldwide tax assessment and assessed under Australian tax rates.<\/p>\n<h3>\u00a0Costs of an Australian Expat<\/h3>\n<p>Many expats from Australia face substantial expenses in terms of healthcare, accommodation, and education, all of which may be unfamiliar to them. Therefore, the financial advice of an Australian expat must also consider their risk management, such as life insurance, trauma insurance, international health cover, and the impact of these costs on their financial situation.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In our June 2020 webinar on tax planning for Australian expats, Matt Heron, General Manager of Global Operations at SMATS Group, offered four top tips on property investment for Australians living overseas. Four top tips on property investment for Australian expats Use &#8216;negative gearing&#8217; \u2013 expat style If an Australian property asset costs you more&hellip;<\/p>\n","protected":false},"author":2,"featured_media":5959,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false},"categories":[153,6],"tags":[],"class_list":["post-5958","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","category-expatriate-financial-planning","category-153","category-6","description-off"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Australian Expats Investing In Property | Infinity Financial Solutions<\/title>\n<meta name=\"description\" content=\"Four tips on property investment 1.Use \u2018negative gearing\u2019 \u2013 expat style 2. Invest in an Australian home NOW 3. 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