Leaving Australia (or living abroad and investing here) puts you under a different set of tax rules. This guide explains the core Tax Implications for Non-Residents in Australia so you know which income is taxable, which isn’t, and what to do at year-end.
General information only. Your facts matter, visa, where you work, where you live, and the type of income. Use this to get organised before seeking personal advice.
Who is a “non-resident” for tax (and why it matters)
Tax residency is not your passport and not your visa status. It’s about where you actually live and your pattern of life. If you are a non-resident for tax purposes for part or all of the year, Australia generally taxes you only on Australian-sourced income. You won’t usually receive the resident tax-free threshold, and different rates apply.
Split years are common
You can be resident up to the date you depart, then non-resident from the next day. Keep evidence around that change (flights, lease, employment contract, utility disconnections) because it drives how income is split on your return.
What income is taxable for non-residents
Employment performed in Australia
Salary for work physically done in Australia is generally assessable here. Your employer should withhold PAYG tax. Remote work done outside Australia for an Australian employer is generally foreign-sourced and not taxed here while you are non-resident.
Australian property income
Rent from a residential or commercial property in Australia is taxable. You can claim usual deductions (interest, agent fees, repairs, eligible depreciation/capital works). Keep your property manager’s statements and invoices.
Capital gains on Australian assets
Non-residents are generally taxed on gains from “taxable Australian property” (for example, Australian real property and certain interests in property-rich entities). Access to the CGT discount is restricted for non-residents, and the main residence exemption is limited, plan sale timing carefully.
Bank interest, dividends, and royalties
These are typically taxed via non-resident withholding at set rates. If the correct final withholding has been deducted, you may not need to lodge a return just for those items. Franked dividends are usually not subject to further Australian tax for non-residents, while unfranked amounts can be.
Business income with an Australian source
If you carry on a business through a permanent presence in Australia, the Australian-sourced profits are taxable here. Retain contracts, invoices, and travel diaries to support where services were performed.
What income is generally not taxable here for non-residents
Purely foreign-sourced income, employment performed overseas, overseas bank interest, and gains on foreign assets, are usually outside Australia’s scope while you’re non-resident. Keep records to show the source if asked.
Property rules non-residents should know
Land tax and stamp duty surcharges
States and territories may impose absentee/foreign owner land tax surcharges and foreign purchaser stamp duty surcharges. These are separate from federal income tax and vary by state. If you buy or hold property, check your state’s tests each year (names on title, corporate structures, trust rules).
Renting your former home
If you move overseas and rent your previous main residence, keep a clean cost-base file (purchase price, stamp duty, legal fees, renovations, selling costs). It’s essential for future CGT calculations.
Selling property as a non-resident
A foreign resident capital gains withholding applies to many property sales above a price threshold at settlement. If no CGT is ultimately payable (or a lower amount is expected), you can apply for a variation before settlement, don’t leave this to the last week.
Employment, super, and leaving Australia
If you return to Australia temporarily for work while non-resident, income from those Australian work days is generally taxable here. Employers may still have superannuation obligations for work done in Australia. Some temporary visa holders who permanently depart may be eligible to claim super under the departing rules, check your visa class and timing before you rely on this.
Medicare levy and private health
Non-residents for tax purposes generally do not pay the Medicare levy and do not face the Medicare Levy Surcharge (the higher-income add-on for residents without eligible hospital cover). That said, once your status changes to resident again, these may apply.
Lodging returns and key admin
Do you need to lodge?
- Yes, usually if you earned Australian property income, business income, or employment income here.
- Maybe not if your only Australian income was interest, unfranked dividends, or royalties and the correct final non-resident withholding tax was deducted. Keep the year-end summaries anyway.
Tax File Number (TFN)
You can lodge as a non-resident with a TFN. If you don’t have one, apply, banks and brokers often withhold at higher rates if they don’t have your TFN on file (separate from non-resident withholding).
Timing
Australia’s financial year runs 1 July to 30 June. Most individual returns are due by the end of October if you self-lodge; using a registered agent typically extends the due date. If you changed residency mid-year, your return will reflect that split.
Investments and managed funds
Distributions from Australian managed funds to non-residents are often broken into components (interest, dividends, capital gains, fund payments). Some components are subject to withholding at the fund level, others at investor level. Keep the annual tax statement and distribution breakdowns; they drive both your Australian and overseas reporting.
Currency conversions and record-keeping
Convert foreign currency amounts into AUD using a consistent method (for example, monthly average for salary; settlement-day rate for asset sales). Keep PDFs or screenshots of the rates used and date-stamp everything. For property, maintain a single folder for rent statements, interest summaries, insurance, council rates, repairs, capital works and bank statements showing rent received.
Common traps (and easy fixes)
Confusing immigration status with tax residency
You can be on a long visa overseas and still be resident for tax, or be non-resident with only short visits back, depending on your overall pattern of life. Document ties and intentions.
Forgetting state-based surcharges
Absentee land tax and foreign purchaser stamp duty are state imposts. Review them annually if you hold property through a trust or company, they can look through structures.
Missing the settlement withholding step
Selling as a non-resident? Settlement withholding can catch sellers who didn’t plan ahead. If a lower CGT outcome is likely, apply for a variation well before settlement.
Overlooking share plans and bonuses
Employee equity, bonuses, and deferred comp can be taxed at different points. Track grant/vest/exercise dates and where duties were performed to support the “source” analysis.
Assuming losses vanish
Rental losses can often be carried forward for future Australian income. Keep notices of assessment and your carry-forward schedule.
Practical year-end workflow for non-residents
- Confirm your residency status for the full year (or note the change date).
- List every Australian income source by month (rent, bank interest, dividends, employment days in Australia, fund distributions).
- Reconcile bank deposits to agent statements for property.
- Gather interest and dividend statements (including franking credits and any withholding).
- For asset sales, compile contract, settlement statement, and your cost-base file.
- Check whether state land-tax or surcharge notices arrived and keep them with your records.
- Decide if you must lodge; if yes, prepare and lodge by the due date (or appoint an agent before it passes).
FAQs
Do non-residents get the tax-free threshold?
No. Non-resident rates start from the first dollar of taxable Australian income.
Do non-residents pay the Medicare levy or the private health surcharge?
Generally no, because those apply to residents. If you become resident again, they may apply from that date.
Can non-residents negatively gear an Australian property?
You can claim eligible rental deductions. If this creates a loss, it may carry forward to offset future Australian income.
Do I need private health cover for tax as a non-resident?
No. The private health surcharge is a resident concept. Hold cover if you want it for health reasons, not to avoid a tax you don’t face.
I’m selling my Australian home while overseas, will I pay CGT?
Rules are strict for non-residents selling a former main residence. Access to the exemption is limited, and settlement withholding can apply. Get advice early and prepare evidence for periods you were resident.
Bottom line: work out your tax residency, list your Australian-sourced income, keep property and investment records tight, and plan ahead for property sales and state surcharges. With those pieces in place, the Tax Implications for Non-Residents in Australia are manageable, and you’ll avoid the last-minute scramble that comes from juggling two countries’ rules.
