So, your expat assignment is coming to an end, and you are developing plans for moving back to Australia.
Here are 9 things you must consider when moving back to Australia
Moving Back to Australia
1. Don’t Pay Excess Fees To Your Bank When Moving Your Cash Back To Australia
Some people choose to transfer their savings back to Australia on a regular basis (eg. to pay off home or investment loans), while others prefer to keep it overseas for unforeseen emergencies. If you need to move cash back to Australia, you should consider your options to ensure you get the best possible exchange rate and the lowest possible fees. In our reviews of online money transfer companies or online currency brokers (including Ozforex and HiFx) compared with transferring your money via an international money transfer with your bank, you could lose up to around 4% of your money to the banks through high fees and poor exchange rates. Check out your options in this article, why I don’t use my bank for international money transfers.
2. Review Your Investments & Get Some Tax Advice
If you were a non-resident for Australian tax purposes while living abroad, then the day you arrive back in Australia to live permanently is the day you become an Australian tax resident again.
Before arriving back in Australia, you should review your investments and the tax implications with your financial or tax adviser to ensure there will be no unintended tax consequences – both in Australia and your previous country of residence.
If you are living in a low taxing country (and are a non-resident for tax purposes), you should also make sure that you receive all of your income (eg. last pay cheque, bonuses) before arriving back in Australia, to ensure the ATO does not consider it taxable in Australia.
You should also be aware that if you have accumulated money in an overseas pension scheme, then you may be able to transfer the funds (tax effectively) to an Australian superannuation fund if you do it within six months of arriving back in Australia. Superannuation legislation is complex, so speak to your financial adviser. We have written in more detail on how you can transferring your UK pension to Australia here.
And if you have acquired a house overseas whilst living abroad, make sure you understand the Australian tax implications for your overseas investment property.
3. Update Your Will
After every major life event, it is a good habit to review your will (and life insurance) and determine whether or not it needs updating. Has your family grown whilst living abroad? Have you acquired assets overseas? Or have your intentions changed with respect to how you want your estate distributed after your death? If you do need a new will or don’t have a will at all, moving back to Australia is a good time to put one in place. Getting a will organised doesn’t need to be a difficult or expensive exercise. With all the technological disruption going on, its now even possible to put in place a will no matter where you are in the world over the internet (though you will still need to print it out, sign it and have it witnessed). Read more about updating your will online here.
4. Minimise International Removal Costs
International moves to and from Australia can be very expensive. Critically review all your belongings as to whether you really need to bring them back to Australia. What items can you sell, give away to charity, take to the tip? Sending things by sea container is generally going to be the cheapest way to send things home, so seek to minimise the things you will take with you on the plane or send back by airfreight.
If there are some items that you will need in advance of your sea container arriving, consider sending it as unaccompanied air freight. Companies such as sendmybag can save you a lot of money relative to taking it as excess baggage on your flight home.
When you have narrowed down what you want to send home by sea freight, you should get multiple international removal quotes as the cost between companies can vary greatly. Save time and money by getting five quotes by completing one form with our partners at Triglobal.
5. Give notice at your current rental property and advise your tenant in Australia
Give notice at your current rental property (overseas) If you want to minimise the costs of moving back to Australia, you will want to consider the terms of your current rental agreement (assuming you are renting while living abroad). Will you need to break the lease? Will you need to request a short extension to the current lease? How much notice are you required to provide the landlord of your intention to move out.
If there is a chance you could be renting again when moving back to Australia, be sure to ask your current property manager or landlord for a rental reference. If the property manager is unwilling to give you something in writing, they may be willing to provide you with a factual statement showing you paid your rent on time every month, or they may be willing to be contacted by a future landlord or property manager in Australia. If the latter is the case, you should confirm with the property manager how they would like to be contacted in the future – email, telephone etc.
Advise your tenant in Australia If you have rented out your house in Australia, then you will also need to check the terms of the lease with the current tenant. Here it is important to remember that if your tenant has signed up to a fixed term lease, then the tenant is under no obligation to move out of your home until the end of the fixed term lease.
If you desire to move back into your house prior to the end of a fixed term lease, you could ask the tenant whether they are interested in moving early. In some cases you might want to offer them an incentive to move early. Otherwise you will need to honour the lease and find alternative suitable accommodation until the house is vacant.
If the tenant is on a periodic lease, you should again check the terms of the agreement to understand how many days notice you need to provide the tenant to vacate the property. Don’t forget to factor in the timing of the arrival of your furniture.
6. Buy a Home In Australia
If you don’t own a home in Australia or plan to live somewhere different to where you used to, you can start the process to buy a home before moving back to Australia. People with children in particular, want to settle down in one location as soon as possible after arriving. An international move is disruptive enough for kids, so you don’t want any added stresses like having to change schools simply because you ended up buying into a different suburb than you envisaged.
If you have a rough idea of where you want to live and the price range you are looking at, using the services of a buyers agent might be attractive. You may then find yourself in a situation where you have already made an offer on a property before you set a foot back in Australia. We have a special arrangement for readers of The Australian Expat Investor here.
To understand your borrowing capacity and to help you find the best loan, I always recommend a mortgage broker. Although banks in recent times have tightened lending criteria for non-residents of Australia, if your income overseas is substantially higher than it will be when you are back in Australia, you may find you have more borrowing capacity when you are living abroad.
7. Obtain a depreciation schedule on your overseas property
If you bought a property to live in while abroad or if you bought overseas property as an investment, then when you return to Australia (and become an Australian resident for tax purposes again), you will be required to declare the income on your overseas properties to the Australian Tax Office. Equally, you will also be entitled to claim depreciation as a tax deduction against the income on your overseas investment properties.
To ensure that your depreciation claims are accepted by the Australian Tax Office, it may be more convenient to organise the depreciation schedule through an Australian Quantity Surveyor. I have used Washington Brown for depreciation schedules myself, and happily recommend them. I have also negotiated a special rate for readers of The Australian Expat Investor (A$55 discount). Complete and submit the form here to obtain a quote. To receive your discount, you must use the form available here, or mention “The Australian Expat Investor” when making an inquiry.
Read our article Australian Tax Implications for your Overseas Investment Property for more information.
8. Re-instate your private health insurance
If you suspended your private health insurance when you left Australia, you will generally have 30 to 60 days from the date you arrive back in Australia to reinstate your health cover without being penalised (eg. needing to re-sit waiting periods). The various health funds have different policies, so best to contact your private health insurance company directly.
9. Stay alert to reverse culture shock
No, reverse culture shock is not some new-age mental disorder. Reverse culture shock is the emotional response many expats have when they move back to their home country after an extended period overseas. Often it is a feeling of isolation, and not fitting in. Those friends you used to spend every weekend with, now have busy lives and a family and don’t have as much time for you anymore. For some people, the culture shock of moving back home can be worse than the culture shock of moving overseas. Stay alert to it, and if any of your family members are suffering, consider whether you or they need professional support.
Disclaimer : This information is for educational purposes only and does not constitute financial or taxation advice. As this information is not advice and has been prepared without taking into account your objectives, financial situation or needs you should, before acting on this information, consider its appropriateness for your circumstances. Independent advice should be obtained from an Australian financial services licensee before making investment decisions, and a registered (tax) financial advisor/accountant in relation to taxation decisions. To the extent permitted by law, we exclude all liability for any loss or damage arising in any way. We may receive referral commissions from companies mentioned in this article.