Sincere advice & opinion sought

[Toknarok]

     If you own property in Australia, are resident abroad and you rent out that property, the Aussie tax-man will slug you for 48% of your rental income.

[steven100]

4 minutes ago, Toknarok said:

     If you own property in Australia, are resident abroad and you rent out that property, the Aussie tax-man will slug you for 48% of your rental income.

48%  seems too high ....   rental income is taxed similar to personal income tax,  while you can claim depreciation and other costs to bring the figure down.

If the rental property brings in $200 pw or $10,400 annual ...    this would be added to his personal income for the year.  If the amount is less than $19,000 / annual then no tax would be payable  ... ?  

am I correct   ?        just don't know how you can say 48%   ....   

[Peterw42]

32 minutes ago, Toknarok said:

     If you own property in Australia, are resident abroad and you rent out that property, the Aussie tax-man will slug you for 48% of your rental income.

It depends if you have maintained "resident for taxation purposes" status. Dependant on circumstances you can still pay normal tax rates and be living abroad.

 

https://www.ato.gov.au/Individuals/International-tax-for-individuals/Work-out-your-tax-residency/

Edited May 11, 2017 by Peterw42

[Peterw42]

41 minutes ago, steven100 said:

48%  seems too high ....   rental income is taxed similar to personal income tax,  while you can claim depreciation and other costs to bring the figure down.

If the rental property brings in $200 pw or $10,400 annual ...    this would be added to his personal income for the year.  If the amount is less than $19,000 / annual then no tax would be payable  ... ?  

am I correct   ?        just don't know how you can say 48%   ....   

If you are not considered a resident for taxation purposes then the 48% tax rate kicks in from dollar one. No tax free threshhold etc

Edited May 11, 2017 by Peterw42

[steven100]

14 minutes ago, Peterw42 said:

If you are not considered a resident for taxation purposes then the 48% tax rate kicks in from dollar one. No tax free threshhold etc

so if one has a rental it is best to be considered an Australian resident .. ?    return regularly for brief stays  ?  and declare no different ... ?

[bamukloy]

One might suggest you  saved enough already to self insure? 
Company here either wont insure someone your age or charge a fortune. 
Aus insurance wont honour the deal if overseas and ALL of these will try to get out of paying anything, so not good value IMO.

The house:  
The usual way is get a property manager. that will gaurantee no damage or BS from tennants but for sure this cuts into your costs. 

After agent commission, taxes, land tax on landlords, maintenance etc you will be lucky to break even, especially If you get landlords insurance which is probably a must.

Also, if you rent more than 6 years they will want capital gains tax at the sale of the house.

For me, the ideal scenario would be to try to rent to a family member in Aus or someone very trusted..off the book!

Give them a discount on  rent, if you could stay a few weeks a year possibly.

Tricky to arrange though, so
IMO you better off just selling.
After all above issues you be lucky to net profit any more than 3% and you can get that for money in bank with no problems and other suprises.

 

Also, if in the future the Aus gov declare you a non resident for tax purposes, they will not allow you the tax free thresh-hold, therefor you pay over 30% tax on EVERY $ earned in Aus.

Very unfair i know but the Aus gov are like that..a bunch of xxxxs
 

[Peterw42]

20 minutes ago, steven100 said:

so if one has a rental it is best to be considered an Australian resident .. ?    return regularly for brief stays  ?  and declare no different ... ?

Yes thats right, if you have any Australian income, rent, share dividends, interest etc, it is best to keep Australian "resident for taxation purposes" status. Otherwise all income is taxed at 48%.

 

Lots of information and an online test to determine if you are a taxation resident here.

 

https://www.ato.gov.au/Individuals/International-tax-for-individuals/Work-out-your-tax-residency/

 

Basically the silliest thing you can do is tell the Government you are leaving for good. 

 

Having a house and renting it out, declaring the income and doing tax returns helps you maintain "resident for taxation purposes".

 

 

Edited May 11, 2017 by Peterw42

[Peterw42]

22 minutes ago, bamukloy said:

After agent commission, taxes, land tax on landlords, maintenance etc you will be lucky to break even, especially If you get landlords insurance which is probably a must.

I have never heard of " land tax on landlords", can you maybe elaborate ?

I have a rental property in Australia and all the costs you mention end up being around 12% of the rent. I still keep 88%, hardly breaking even. The 12% costs are also a tax deduction against the rental income.

Keeping a house in Australia, and an intention to return etc, helps you maintain "resident for taxation " status.

Edited May 11, 2017 by Peterw42

[bamukloy]

13 minutes ago, Peterw42 said:

Yes thats right, if you have any Australian income, rent, share dividends, interest etc, it is best to keep Australian "resident for taxation purposes" status. Otherwise all income is taxed at 48%.

 

Lots of information and an online test to determine if you are a taxation resident here.

 

https://www.ato.gov.au/Individuals/International-tax-for-individuals/Work-out-your-tax-residency/

 

Basically the silliest thing you can do is tell the Government you are leaving for good. 

 

Having a house and renting it out, declaring the income and doing tax returns helps you maintain "resident for taxation purposes".

 

 

How do you figure that?

If he rents long term and its his only property, surely it look to them like he is living overseas?.

 

I think he is better of renting to a family member or friend off the books.

Even if he rent a room out or share the house he can keep it as his prime address and say he on a short term holiday with wife and INTENDS to return.

As others mention he MUST stay a resident for tax purpose or they will burn him

 

Basically as far as Aus gov goes, dont talk to them unless you absolutely must. 

if so, tell them nothing is the key

 

-tell them only what they ask.

-offer NO info, only that you a tourist in Thailand and you have no ties and that you moove place to place.(no address in thailand)

-lie lie and lie again. Peoples life situation change regulary. They cannot penalise people or make a different ruling for peoples changing their mind

[bamukloy]

28 minutes ago, Peterw42 said:

I have never heard of " land tax on landlords", can you maybe elaborate ?

I have a rental property in Australia and all the costs you mention end up being around 12% of the rent. I still keep 88%, hardly breaking even. The 12% costs are also a tax deduction against the rental income.

Keeping a house in Australia, and an intention to return etc, helps you maintain "resident for taxation " status.

It is only in some states of Australia i believe.

They tax is really design for investment properties but they call it land tax.

They charge you the amount based on size of property and government value.

If you manage your own rental place you could possible get away with it, pleading you didnt know if you get caught out.

Property and real estate managers will take it out every year though.

 

I think is this way in W.A and TAS but will only be time before they all do it

Edited May 11, 2017 by bamukloy
Clarify a statement

[Peterw42]

4 minutes ago, bamukloy said:

How do you figure that?

If he rents long term and its his only property, surely it look to them like he is living overseas?.

 

I think he is better of renting to a family member or friend off the books.

Even if he rent a room out or share the house he can keep it as his prime address and say he on a short term holiday with wife and INTENDS to return.

As others mention he MUST stay a resident for tax purpose or they will burn him

 

Basically as far as Aus gov goes, dont talk to them unless you absolutely must. 

if so, tell them nothing is the key

 

-tell them only what they ask.

-offer NO info, only that you a tourist in Thailand and you have no ties and that you moove place to place.(no address in thailand)

-lie lie and lie again. Peoples life situation change regulary. They cannot penalise people or make a different ruling for peoples changing their mind

Yes, I agree dont tell the Government anything. However they do have specific things they look at to determine residency status. One of the questions they ask is "do you still own a house in Australia" etc.

You can fly under the radar, not declare rental income (illegal) etc, but bank accounts link to tax file numbers, link to immigration etc. 

 

Its not hard to stay legal and still maintain resident status. Declaring your house and income goes in your favor.

 

If the Tax office looks at you and sees you are overseas, not declaring income in Australia, that rings alarm bells at the tax office because you must have an income they dont know about. You would get flagged as a non resident.

 

 

[bamukloy]

36 minutes ago, Peterw42 said:

Yes, I agree dont tell the Government anything. However they do have specific things they look at to determine residency status. One of the questions they ask is "do you still own a house in Australia" etc.

You can fly under the radar, not declare rental income (illegal) etc, but bank accounts link to tax file numbers, link to immigration etc. 

 

Its not hard to stay legal and still maintain resident status. Declaring your house and income goes in your favor.

 

If the Tax office looks at you and sees you are overseas, not declaring income in Australia, that rings alarm bells at the tax office because you must have an income they dont know about. You would get flagged as a non resident.

 

 

Very True.

I take all the advice i can to keep ahead of them!

For me, i sold out as i just got sick of thinking of what could happen.

the last thing you want is a constant headache from property worries and the ATO trying to fxxx you!

 

Money in bank now earning just under 18k is perfect for now and no headaches..but all depends on your age and intentions for the future

 Best scenario IMO, get as much rental income as you can and sell the property before you need to spend anything.
As i mention before, if your house is over 6 years constant rent the rule says they gonna try to charge you capital gains on the income you made if/when you sell..

 

But (ahem) all these tax things are maybe that a matter of no info offered,no questions asked.

They probably havent got resources enough to chase every 2 bob small time punter.

 

Im glad for the conversation, ideas and opinions tho thanks. 

My reasoning is we are all but soldiers and those pxxxxs, the ATO are the enemy! 

[bandos2000]

the above is all interesting info for me , as im planning to buy a house in OZ and rent to a family member, the benefit of that is i will have a place to stay when home on holiday. right now i am classed as a non resident, i dont own anything or have any income from OZ, but i am working in the Philippines for now, and my salary goes into account in OZ. That investment would form part of my super in retirement, but i would not be happy to pay out 48% tax on the rental income, nor get taxed on my overseas salary, maybe i need to rethink where or what to invest in.

[bamukloy]

Thats true. 
Australia gov have a real hardon about citizens being the nomad cos they hate aus$ going out of the country.
Of course they want you paying a fortune in tax for your lifestyle habits and paying fines and gambling, so all the fatcat pollies can have it sweet.
Basic being a good doped-up beer guzzling lapdog like the rest of em is what they want.

But truth be told every country is like this. some even worse.
They all will make unfair laws against expats and those wanting to stay away.
Thing is, as a rule, expats dont vote, which mean this group have no power at all, so they dont care what they do to you. 
And it never is an issue for the general public either as most them are jealous/envious of us people being away having a good life.

Right now they only can make it expensive to live overseas and will claw at your money even though you are using no services and are no drain on them whatsoever. It sucks! 

Yet for all the rules and laws they cannot touch that LM investments guy out of duping expats of millions in the Aussie ripoff.

 

 One day maybe they take it to the next step against us but until then the small guy will always slip through the cracks.

 

There are other things you can do as well as whats mentioned here,but im sure understandable that many aussies posting here dont want certain stuff to become public on these pages.

 

I know expats arent normally very friendly to others on this site and in Thailand generally, but for this one issue we should work together and to continue to fight the bxxtards 

Sorry rant over!

[sipi]

Very informative and helpful posts.

Thanks.

[SkyRider]

On 5/6/2017 at 6:35 AM, Oxx said:

A few points:

 

(1) Why keep the house boarded up? Sell it and invest the cash to generate additional income.

 

(2) With all your income in NZD you are highly exposed to the NZD/THB exchange rate.  Better to move some of your wealth to Thailand and/or diversify currency exposure.

 

(3) It sounds like you have a lot of your wealth in cash.  It won't even keep up with inflation, and that could be a big problem over the coming decades.  Have some investments in equities to allow for potential capital growth as well as income.

Oxx, could you please give some suggestions on the best ways to move and keep wealth in Thailand?  

 

I ask, because I'm concerned about this, all my money is in the U.S., and I'm worried about losing a lot of it to the exchange rate.  

[55Jay]

23 hours ago, SkyRider said:

Oxx, could you please give some suggestions on the best ways to move and keep wealth in Thailand?  

 

I ask, because I'm concerned about this, all my money is in the U.S., and I'm worried about losing a lot of it to the exchange rate.  

Moves far away from the OP.

 

What is your situation?  Working?  Retired/Monthly Pension?  Investments producing income?  How do you bring money from the US to Thailand now and at what frequency?

 

At any rate, probably best to open a new thread in Banking/Economy, you'll get more eyes on it.

Edited May 12, 2017 by 55Jay

[ed strong]

After reading the OP and subsequent posts its seems you have decided to do exactly what you already have been doing!

 

It appears that you have everything you could ever have hoped for.

 

Anyways, my advise is to do whatever you like doing, you certainly have enough experience in both countries and enough money

 

Enjoy yourself. Oh and regards to the pollution in the North.......anyone?

[SkyRider]

3 hours ago, 55Jay said:

Moves far away from the OP.

 

What is your situation?  Working?  Retired/Monthly Pension?  Investments producing income?  How do you bring money from the US to Thailand now and at what frequency?

 

At any rate, probably best to open a new thread in Banking/Economy, you'll get more eyes on it.

 

Not working now. No pension, just a little bit of savings. 

Not a lot of investments producing income at all.

 

Money from the U.S, I withdraw from Citibank ATM (more often then I would like to.)

 

I'll take your advice and open a new thread in Banking/Economy.

Thank you.