Should you keep or sell your property in Australia: A comparison for Aussie Expats

As an Australian expat living abroad, one of the most common financial dilemmas you’ll face is whether to keep or sell your property back home. This might be a property that was previously your main residence or an investment property you have held for some time. It’s a big decision, and the right answer isn’t always clear-cut. With changing tax laws, rental yields, and lifestyle goals all influencing your decision, it's important to weigh up your options carefully.

In this blog, we'll explore both sides of the debate: should you keep or sell your property as an Aussie Expat? And help you make a decision that's right for your financial future.

The Case for Keeping Your Property

1. Long-Term Capital Growth: Australian real estate, particularly in major cities like Sydney, Melbourne, and Brisbane, has historically shown strong long-term growth. If your property is in a high-demand area, holding onto it could mean significant capital appreciation over time.

   
   

2. Rental Income Potential: If your property is Cash flow positive (i.e. the rental income exceeds the property expenses), renting it out while you’re overseas could provide a consistent income stream to support your lifestyle abroad. This is particularly helpful for those nearing retirement, as opposed to those in the ‘wealth accumulation’ phase of life.

   
   

3. A Base to Return To: Many expats eventually return home. Keeping your property gives you the security of a home base in Australia, saving you from re-entering a potentially more expensive housing market later on, or needing to compete in possibly tighter rental markets.

   
   

4. Diversification: Holding onto Australian real estate provides geographical diversification in your investment portfolio, particularly important if your income or other assets are based overseas.

   
   

The Case for Selling Your Property

1. Non-Resident Tax Changes: Australian tax laws have changed significantly for expats. As a non-resident for tax purposes, you’re no longer eligible for the capital gains tax (CGT) exemption on your primary residence if you sell while living overseas. Also, you can only access a partial CGT discount under the 50% CGT rule for the period the property was owned as a resident for tax purposes in Australia.

   
   

2. Property Management Hassles: Managing a property from overseas, especially one that isn't generating strong returns, can be stressful and time-consuming. Even with a property manager, issues like maintenance, vacancies, and tenancy disputes can arise, detracting from the financial viability of holding onto the property.

   
   

3. Access to Capital: Selling your property can free up significant equity, which you could use to invest in more liquid and tax-effective assets, such as shares or Exchange-traded Funds (ETFs). You might also purchase a home in your new country, or simply wish to eliminate debt to reduce financial stress.

   
   

4. Market Timing: Depending on where your property is located, now might be a good time to sell. If property prices have peaked in your area, you may want to cash out while the market is in your favour.

   
   

Key Factors to Consider

When deciding should you keep or sell your property as an Aussie Expat, here are some final considerations:

• Location & Market Trends: Is your property in a growth area or one that's stagnating?

• Your Tax Residency Status: Are you classified as a non-resident for tax purposes? This will affect your CGT obligations significantly.

• Cash Flow Needs: Do you need access to the equity in your property to meet your income needs, such as retirement?

• Future Plans: Are you planning to return to Australia in the next 5–10 years?

• Investment Performance: How is your property performing compared to other investment options?

• Tax Effectiveness: Are their more tax effective investment options more suited to your Expat status.

Conclusion

There’s no one-size-fits-all answer to the question: Should you keep or sell your property as an Aussie Expat? It depends on your individual financial goals, risk tolerance, and lifestyle plans. If you’re unsure, consider speaking with a Financial Adviser who specialises in expat tax and property strategies. They can help you model different scenarios and assess the true financial impact of keeping vs selling. Making the right decision now can help you avoid costly mistakes and make the most of your property investment.

Runway Wealth Management is the trusted Financial Adviser to the Australian Expat community. Our tailored advice is backed by expertise, education and experience, which allows us to be at the forefront of Australian Expat Financial Planning.

If you would like to speak to one of our Expat Financial Advisers about this blog or if you have other queries, we would be more than happy to speak with you. Feel free to send us an enquiry through the ‘Contact Us’ tab provided in the link below:

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General Advice Disclaimer: The information contained herein is of a general nature only and does not constitute personal advice. You should not act on any recommendation without considering your personal needs, circumstances, and objectives. We recommend you obtain professional financial advice specific to your circumstances.