So you’re about to become an Australian expat – congratulations on your impending adventure! But when it comes to the Australian property market, should you really be cutting all your ties, even though you’ll be living overseas for the foreseeable future?
We think not.
Of course, predicting what the real estate market is going to do next is now notoriously difficult. Especially as Sydney prices have been heading skywards, whilst property in Perth for example is heading in the opposite direction. But there are still some good reasons to keep your money invested in the Australian property market, even as an expat. Here are just three to consider:
1. Stay on the ladder
As an Australian, you’re likely to have invaluable local real estate knowledge of the Australian market. That means an Australian property investment could be better than an investment elsewhere. Your investment pick has a good chance of increasing in value, so long as you choose wisely, based on your local knowledge and homework. If you sever your ties now, with rising property prices, it becomes very hard to get back into the property market in Australia.
2. Tax benefits
While it is probably not great advice to keep Australian property solely for the tax benefits, it’s an added side-benefit!
Whether the tax system regards you as a resident or not, Australia has a range of tax benefits for real estate investors. If you remain a resident, your financing and maintenance costs from real estate are classed as deductions, you get building and improvements depreciation, and there are capital tax benefit concessions as well.
If as an expat you are regarded as a non-resident, you may still be able to claim all of those deductions and benefits against any Australian income, with the exception of capital gains tax concessions. In relation to capital gains tax concessions and other issues, speak to us to learn more.
If you can afford it, a major universal rule of investing is diversity. Having and maintaining a range of investments – let’s say property in Australia, a home in your new country, and investments in superannuation, shares and managed funds – spreads the risk and reduces your exposure to volatility.
For Australian expat tax returns and advice, contact us today.