Australian Expat Tax Guide 2026: What Happens When You Leave Australia

"The biggest financial mistake I see Australians make before moving overseas isn't choosing the wrong visa or the wrong city. It's leaving without getting tax advice. The decisions you make in the year of departure — your property, your super, your residency status — are extremely hard and expensive to unwind later."

Moving to Thailand or Vietnam has significant tax implications that most Australians don't think about until they're already there. This guide gives you a clear overview of what changes when you become an Australian non-resident for tax purposes, what stays the same, and the decisions that need to be made — ideally with a specialist expat tax accountant — before you leave.

Disclaimer: This is a general guide, not tax advice. Tax laws change, and individual circumstances vary significantly. Engage a registered tax agent with expat specialisation before making any tax-related decisions.

The Single Biggest Financial Mistake Australians Make Before Leaving

It's not the visa. It's not the housing. It's leaving Australia without getting a professional tax review first.

The year of departure is the most complex tax year most Australians will ever have. You are a resident for part of the year and a non-resident for the rest. Your treatment of investment properties, shares, super, and foreign income changes fundamentally. The window to make certain elections and arrangements — particularly around the CGT main residence exemption — closes the moment you stop being a resident.

Budget A$500–1,500 for a specialist expat tax consultation before you leave. It is the most valuable money you will spend in the entire move.

The Tax Residency Test: Are You Still an Australian Tax Resident?

Australian tax residency is not determined by your citizenship or your passport. The ATO uses a multi-factor test, primarily the "resides test" — whether you actually reside in Australia — supplemented by three statutory tests.

For most Australians moving to Thailand or Vietnam with no intention of returning to live in Australia, you will eventually become a non-resident for tax purposes. The key factors the ATO examines:

• Where you physically reside and for how long
• Your intention: temporary absence vs permanent relocation
• Family ties: does your family remain in Australia?
• Economic ties: do you maintain an Australian home, business, or employment?
• Social ties: memberships, bank accounts, ongoing Australian connections

There is no bright-line rule. Some Australians who spend most of their time overseas remain Australian tax residents because they maintain strong ties. Others become non-residents quickly. The ATO's determination depends on the totality of circumstances.

What Changes as a Non-Resident for Tax

Once the ATO classifies you as a non-resident, your tax treatment changes in several important ways:

Item	Australian Resident	Non-Resident
Tax-free threshold	$18,200 tax free	No tax-free threshold — taxed from $1
Tax rate on income	Progressive 19%–45%	32.5% from $1 up to $120k, 37% above
Foreign income	Taxed in Australia	Not taxed in Australia
Australian rental income	Taxed at resident rates	Taxed at non-resident rates (32.5%+)
Australian dividends	Franking credits apply	Withholding tax applies (usually 15–30%)
Medicare Levy	2% applies	Exempt (claim on tax return)
CGT on Australian assets	50% discount after 12 months	No 50% CGT discount

Notifying the ATO: What to Do Before Departure

There is no formal "departure form" to submit to the ATO. Instead, you notify the ATO of your changed tax residency status through your annual tax return. In the year of departure, you lodge a return covering:

• Your period as an Australian resident (from 1 July to your departure date)
• Any Australian-sourced income earned after departure as a non-resident

Practically, before departure you should:

• Notify your employer, super fund, banks, and share registry of your overseas address
• Update your tax file number status to non-resident if withholding applies
• Review your investment portfolio for CGT implications before you become a non-resident
• Engage an expat tax accountant for your departure-year return

What Happens to Your Super as a Non-Resident

Your superannuation stays in Australia and continues to grow — investment returns, employer contributions (if still receiving them), and any personal contributions you've made. The super fund doesn't care where you live.

What changes:

• You generally cannot access your super until you reach preservation age (60–65 depending on birth year) under normal conditions, regardless of where you live.
• The Departing Australia Superannuation Payment (DASP) allows some temporary visa holders to access their super when they permanently leave. Australian citizens and permanent residents are generally not eligible for DASP.
• Insurance within super may lapse or be altered if you become a non-resident or stop making contributions. Review your fund's terms.
• Non-resident tax on super earnings applies at a rate of up to 15% within the fund — the same as for residents in accumulation phase.

The standard advice: leave your super alone, let it grow, and access it at preservation age under normal retirement conditions. Trying to withdraw early via DASP is rarely available to Australian citizens and if it were, the tax hit would be severe.

The 6-Year CGT Main Residence Exemption Explained

This is the most valuable tax concession available to Australians who own property and move overseas — and one of the least understood.

Under section 118-145 of the Income Tax Assessment Act 1997, if you rent out your Australian home after moving overseas, you can continue to treat it as your main residence for CGT purposes for up to six years. If you sell within that 6-year window, you may pay zero CGT on the gain — even though you haven't lived there for up to six years.

Key conditions:

• The property must have been your actual main residence at some point
• You cannot simultaneously claim another property as your main residence
• The 6-year clock restarts if you move back in
• You can only have one main residence at a time

Rental Income and Australian Investment Properties

If you keep an Australian investment property while living overseas, the rental income is Australian-sourced income and taxable in Australia — even as a non-resident. You lodge an Australian tax return each year to report this income and claim relevant deductions (interest, rates, depreciation, agent fees).

Non-residents pay tax on Australian rental income from the first dollar at the 32.5% rate. There is no tax-free threshold. This is less tax-efficient than being a resident, which is why some Australians structure their property ownership before departure.

The Medicare Levy Exemption

Australian tax residents pay a 2% Medicare Levy on taxable income. As a non-resident, you are entitled to a full Medicare Levy exemption. You claim this on your annual tax return. The exemption applies from the date you become a non-resident.

Note: claiming the Medicare Levy exemption does not cancel your Medicare card. If you return to Australia and re-establish residency, your Medicare entitlement resumes. Suspending (not cancelling) Medicare while overseas is the standard approach.

HELP/HECS Debt and Non-Residency

Since 1 July 2017, Australians living overseas with a HELP, VSL, SSL, ABSTUDY SSL, or TSL debt must make repayments based on worldwide income once that income exceeds the repayment threshold — currently around A$51,550.

If you move overseas with a student debt:

• You must register your overseas status with the ATO using the Online services for individuals portal
• You are required to self-assess and report your worldwide income annually
• Failing to report creates penalties and indexation interest continues to accumulate

Many Australians don't know this obligation exists. The ATO has become more active in enforcing it, including information-sharing with Thai and Vietnamese authorities under tax information exchange agreements.

Double Tax Agreements: Australia and Thailand / Vietnam

Australia has Double Tax Agreements (DTAs) with both Thailand and Vietnam. These agreements determine which country has the primary taxing rights over various types of income and prevent the same income being taxed twice.

Broadly for Australian expats:

• Employment income: If you work in Thailand or Vietnam, that country generally has primary taxing rights on that income.
• Australian pension/super: Under both DTAs, Australian pension income may be taxed in Australia (the source country) — confirm with your accountant.
• Rental income: Australian rental income is generally taxed in Australia as the source country.
• Dividends/interest: Split treatment — withholding tax in Australia plus potential credit in the country of residence.

Getting Specialist Advice: Why a Departure Tax Review Is Worth It

The decisions you make in the 12 months before and after departure have a disproportionate impact on your financial position for the entire time you live overseas. Property timing, super strategy, share portfolio review, and residency planning are all interconnected.

The specialists worth engaging:

• An expat tax accountant — specifically one who handles Australian non-residents and international tax. Not a generalist accountant, not your current accountant unless they have this specific expertise.
• A financial planner with overseas experience — for super strategy, investment portfolio, and pension planning.
• A mortgage broker — if you're keeping an Australian property, understand how non-resident status affects your borrowing capacity and existing loans.

We regularly connect clients with trusted expat financial specialists as part of our relocation process. It's one of the most valuable parts of proper relocation planning — not because the answers are complicated, but because knowing which questions to ask, and in what order, makes an enormous difference.