Retiring Abroad: Australia
Here are just some of the things to consider if you’re thinking of retiring to Australia. It’s not an exhaustive list and you should spend time finding out as much as you can about the country before you make a final decision and, where you can, access expert advice on the subject.
Financial criteria
To retire to Australia, you must first apply for an Investor Retirement Visa (unless you have family ties to Australia), which is a temporary entry visa only and does not lead to permanent residence in Australia or to Australian citizenship. To apply you must be:
- 55 years or older;
- Have no dependants (other than a spouse); and
- Able to support yourself in Australia without cost to Australian social and welfare services.
The Investor Retirement Visa (known as a ‘subclass 405 visa’) requires you to be sponsored by a state/territory government in Australia. Depending on where you choose to live you have to demonstrate that you have sufficient wealth.
If you plan to live in a regional area of Australia you must have:
- AUD500,000 assets available for transfer to Australia AND;
- AUD50,000 net annual income from investment or pension rights.
- What’s more, you must invest AUD500,000 in state/territory government bonds if you intend to live in a regional area.
If you plan to live in a non-regional area of Australia you must have:
- AUD750,000 assets available for transfer to Australia AND;
- AUD65,000 net annual income from investment or pension rights.
- What’s more, you must invest AUD750,000 in state/territory government bonds if you intend to live in a non-regional area.
You must have held all of these assets for two years before applying, unless the assets relate to inheritance, superannuation, or pension rights.
The Investor Retirement Visa does not lead to permanent residency in Australia. You can apply for further temporary visas and should do so before each visa expires. There is no maximum on the number of years you can stay in the country.
Healthcare
Australia has a reciprocal health agreement with the UK for visitors only, not residents.
The Investor Retirement Visa does not provide any entitlement to coverage by Medicare (Australia’s national health cover) or to Australian social security benefits. You’ll be required to hold comprehensive private medical coverage for the duration of your visa and should ideally use an Australian insurance company.
The standard of healthcare in Australian is high and so is the cost for treatment.
Income tax
You need to look at your tax position carefully. You should seek expert advice on this subject to understand the implications for you.
However, generally, if you are moving to Australia to retire, you will pay income tax on your pension in Australia. As the country has a double taxation agreement with the UK, you will receive a credit in Australia for any tax paid on your pension in the UK to avoid paying tax in both countries.
Australian rates of income tax are:
Income (AUD) | Tax (%) |
|---|---|
| 0 - 18,200 | 0 |
| 18,201 - 37,000 | 19 |
| 37,001 - 80,000 | 32.5 |
| 80,001 - 180,000 | 37 |
| 180,001 and over | 45 |
Buying and Selling Property
The total cost of buying and selling property is estimated on average to be around 6% of the property value. This is based on an old, not new, property valued at US $250,000 (source: Global Property Guide 2011).
Please note that these figures are only an indication of the likely fees commonly payable and should be taken as a guide only. The percentage amount will vary, depending partly on the price of the property, and could be significantly more than this is some instances.
Average house prices
Average house prices are:
Country | Average House Price (AUD) |
|---|---|
| England / Wales | 248,453 |
| Australia | 471,176 |
Source: Land Registry (28.10.2011), www.homepriceguide.com.au (September 2011)
Again, care needs to be exercised with these numbers. What you might be able to buy in Australia could be much bigger than a comparably priced property in England and Wales (though this may vary considerably depending on where you choose to live in Australia).
UK State Pension
Your UK State pension will be frozen from the moment you leave the UK. It will no longer be increased each year and therefore, over time, the purchasing power of your State pension will reduce.
Warning
This content is general, high level information only and should not be interpreted as individual advice. Because the circumstances of each person will be different and are not known to us we recommend that advice, tailored to your specific circumstances, is sought.
Whilst we have made every effort to ensure that the information shown is accurate and up to date please be aware that legislation and tax laws do change.