Like most people, Australians have a particular affinity for investing in property. The attraction of investing in ‘bricks and mortar’ and the fact that it is not marked-to-market make it a popular investment for many of us.
Let’s take a look at how the various Australian cities performed in 2016. On a whole, the Australian property market lifted by 10.71% for the 12 months leading up to 31st January 2017 (CoreLogic).
Obviously, different suburbs will have performed vastly differently and the quality of the underlying asset will also impact performance.
So what should you do with this information as an Australian expat? If you own property in Australia, then it’s important that you start considering the following:
1. Review your financing
When was the last time you looked at your financing arrangements with the bank? Are you getting the best rate you can? Should you fix a portion or all of your debt? Do you have an offset account set up? It’s important to review your financing regularly, or work with a professional adviser to ensure that your finances are in order.
2. Net worth update
If you’re not already tracking your net worth on your own personal balance sheet, it’s time to start. With the change in the value of your property, what is your new net worth position. How much have you increased your net worth by in 2016.
3. Review your tax position
As a non-resident for tax purposes of Australia, we face a tax rate of 32.5% from the first dollar on our Taxable Australian Property, which for most of us is net rental income. If you’re paying tax in Australia, speak with a qualified adviser to start to explore strategies to offset this tax while building your wealth.
4. Repatriation strategies
If you’re considering moving back to Australia in the short to medium term and buying your own home, it’s important to consider the right strategies to purchase your own, while keeping your non-tax-deductible debt (otherwise known as your mortgage) to a minimum. If you don’t already have a strategy in place, seek professional advice to ensure you’re setting yourself up appropriately for your return.
For many Australians, property will form a key piece of the wealth accumulation strategy. With the right plan in place, you can ensure that you’re on track to achieving your financial goals and truly make the most of your time offshore as an Australian expat.
To your financial success!
Jarrad Brown is an Australian-trained and qualified Fee-Based Financial Planner with Australian Expatriate Group, division of Global Financial Consultants Pte Ltd providing specialist financial advice and portfolio management services to international and local professionals in Singapore. Jarrad Brown is an Authorised Representative of Global Financial Consultants Pte Ltd – No: 200305462G | MAS License No: FA100035-3
Australian Expatriate Group is licensed by Global Financial Consultants in Singapore, with a team of Australian-trained, experienced and qualified, allowing us to provide specialist advice to Australians living abroad.
To learn more about how we may be able to help you, please contact us:
✆ +65 8282 5702
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General Information Only: The information on this site is of a general nature only. It does not take into account your individual financial situation, objectives or needs. You should consider your own financial position and requirements before making a decision.
*Please note that Jarrad Brown is not a tax agent or accountant and none of the content outlined here should be taken as personal advice. You should consult your tax agent and financial adviser to review your current personal finances and financial goals to consider whether this strategy is appropriate for you.