For Australians

How tax residency works

The income year runs from 1 July to 30 June. You are an Australian resident for tax if you meet any one of four tests, and the ATO, the Australian Taxation Office, sets out its view of them in Taxation Ruling TR 2023/1.

A simpler, day count based residency test was announced in the 2021 Budget, but it has never been legislated and the government has not said whether it will proceed. The four tests below still apply.

• Resides test: the main test. It asks whether you ordinarily live in Australia, weighing your intentions, family, home, assets and social and work ties.
• Domicile test: if Australia is your domicile, meaning your legal permanent home, you stay resident unless the ATO is satisfied that your permanent place of abode is outside Australia. This is the test most leavers fail.
• 183 day test: being in Australia for more than half the income year makes you resident, unless your usual place of abode is overseas and you do not intend to live in Australia.
• Commonwealth superannuation test: Australian Government employees in the PSS or CSS schemes stay resident wherever they live, along with their spouse and children under 16.

Leaving properly

No form makes you a foreign resident. You stop being resident when the facts change: you leave intending to live overseas indefinitely and establish a permanent home in another country. The ATO judges what you do, not what you say.

1. 01

   Set up a permanent home abroad

   Rent long term or buy in your new country and register there. A permanent place of abode overseas is what takes you outside the domicile test.

2. 02

   Decide on CGT event I1

   In your tax return for the year you leave, choose whether to pay tax now on the deemed sale of your assets or defer it until you actually sell.

3. 03

   Lodge a part year return

   Your return for the year you leave shows the date you stopped being resident, and your tax free threshold is reduced for that year.

4. 04

   Update banks, brokers and your super fund

   Tell them you are a foreign resident so the right withholding tax applies to interest and unfranked dividends.

5. 05

   Notify the ATO about any HELP debt

   If you have a study loan and will be overseas for 183 days or more in any 12 months, lodge an overseas travel notification within 7 days of leaving.

6. 06

   Review any SMSF

   If you run a self managed super fund, check it will remain an Australian super fund. Trustees living abroad long term can cost the fund its concessional tax treatment.

Exit tax, property and investments

When you stop being resident, CGT event I1 applies: you are treated as having sold your assets at market value on that day. Taxable Australian property, mainly Australian real estate and business assets used in Australia, is excluded and stays taxable when you actually sell. You can instead choose to defer, which keeps the other assets within Australian tax as if they were taxable Australian property until you sell them or return, with the gain measured over your whole ownership and a reduced discount.

The family home is the costly surprise. A foreign resident cannot claim the main residence exemption at all when they sell, unless they meet the narrow life events test: a terminal illness, a death or a divorce settlement within six years of leaving. The test looks at your residency when the sale contract is signed, so timing matters; your accountant confirms the right order for your sale and your departure.

Buyers of Australian property must withhold 15% of the price unless the seller provides an ATO clearance certificate, which confirms the seller is an Australian resident. Since 1 January 2025 this applies to every sale regardless of price. Foreign residents pay income tax from 30% on the first dollar of Australian income, with no tax free threshold and no Medicare levy.

Australia legislated major capital gains tax changes in June 2026 that apply from 1 July 2027. For individuals, the 50% CGT discount is replaced by indexation of the cost base for inflation with a 30% minimum tax on gains, and indexation is not available for an asset if you were a foreign resident at any time while you held it, even for one day. Gains built up before 1 July 2027 keep the old rules, but how the changes interact with departures is still being clarified, so plan any move around that date carefully.

Pensions and social security

Your super stays in Australia. As for any member, you can generally access it only after reaching preservation age, now 60, and retiring or meeting another condition of release. The departing Australia superannuation payment, or DASP, which pays out super on departure, is only for temporary visa holders; citizens and permanent residents cannot use it. Withdrawals from a taxed fund after 60 are tax free in Australia, but your new country may tax them.

Medicare is for people who live in Australia, so cover generally ends once you move abroad permanently; arrange international health insurance before you go. The Age Pension can be paid overseas, but after 26 weeks away it moves to an outside Australia rate based on your Australian working life residence: with fewer than 35 years between age 16 and pension age, you receive a proportional amount. Claiming while you still live in Australia is usually far simpler.

HELP and other study loans follow you. Each year you live overseas you must report your worldwide income to the ATO by 31 October, or lodge a non lodgment advice if it is below the threshold, and compulsory repayments are calculated on that worldwide income.

Dual citizenship

Australia has allowed dual citizenship since 4 April 2002, when the rule that removed citizenship from Australians who voluntarily took another nationality was repealed. You keep your Australian citizenship when you acquire a second one, and living abroad does not affect it. Australians who lost citizenship under the old rule can usually apply to resume it.

The other country’s rules matter too. Our citizenship programs in Vanuatu, St Kitts and Nevis and Turkey allow you to keep your Australian citizenship alongside the new one.