Australian expats need to be mindful of several tax implications when buying and owning property in Australia. These include:

• Rental Income Tax: If you buy an investment property (or even rent out your former home while you’re overseas), the rental income is taxable in Australia. As a non-resident for tax purposes, you won’t get the tax-free threshold; Aussie tax is typically withheld or paid on every dollar of net rent. You will need to file an annual Australian tax return declaring that rental income. The good news is you can still claim deductions (interest on the loan, property management fees, depreciation, etc.) to reduce your taxable rental income. Often, rental properties run at a loss (negative gearing) initially, which could mean no actual tax to pay, but you still must lodge returns.
• Capital Gains Tax (CGT): If you sell an Australian property while you are a non-resident for tax, the Capital Gains Tax treatment can be different. Recent law changes mean that expats do not get the normal tax exemption on a former primary residence if it’s sold while you’re overseas (the main residence exemption only applies if you sell while a tax resident). Thus, if you purchase a property and later sell it at a profit, expect that capital gains tax will apply at non-resident rates (which effectively have no tax-free threshold and different brackets). If the property was an investment, CGT was always going to apply but note that non-residents also lose the 50% discount on capital gains for the period they are non-resident. In short, plan for potentially higher CGT if you dispose of the asset while abroad. Some expats plan to only sell after returning to Australia to regain residency for at least that tax year. This is a complex area, so getting personalized tax advice is wise.
• Land Tax: Each state in Australia has land tax on investment properties or second homes (your principal residence is usually exempt, but since as an expat you don’t have a principal residence in Australia that you occupy, any property might be treated as investment for land tax). Moreover, some states like NSW and VIC have a surcharge on land tax for foreign owners. As an Australian expat citizen, you typically wouldn’t be classified as a “foreign owner” for land tax, but if you jointly own with a foreign spouse, or if you’ve lost Aussie tax residency, check the definitions. Either way, if your land holdings (site value) exceed certain thresholds, you’ll have an annual land tax bill.
• Loan Interest Deductibility: If your property is an investment, the interest on your home loan is tax-deductible against your rental income. This is a key benefit – even as a non-resident, you can offset income with interest and other expenses. Make sure to keep records of all your loan interest payments (your lender will provide annual interest statements which your accountant can use).
• No PPOR Exemption While Away: If you buy a property intending it as your home when you return, note that while you’re not living in it, it’s generally treated as an investment property in terms of tax (unless it’s vacant and you intentionally leave it empty, which isn’t useful). Some expats purchase a future residence and leave it empty or let family stay – consult a tax advisor if doing this, as there are time limits and conditions to still claim it as a principal residence for CGT.  We have a recent video available on this topic which you can view at https://youtu.be/xqZPUw5ZwzM
• Foreign Income and Australian Property: Owning property in Australia will mean you need to interact with the Australian tax system even if you’re not living there. You might have to get a tax file number if you don’t have one, file returns, and potentially pay some tax. Also be aware of your country of residence’s tax rules – for example, some countries will tax your worldwide income (including Australian rental income) but might give credit for Australian tax paid, depending on tax treaties.

It’s strongly recommended to consult an expat tax specialist who understands both Australian tax and the implications for someone living in your current country. They can help you structure the purchase (maybe in joint names or a particular way) and plan for things like an eventual sale.

AEXPHL can provide general pointers and connect you with trusted tax advisors. We want you to be informed about: How owning Aussie property will affect your annual tax filings, what records to keep, and how to maximize your after-tax returns. The Australian tax regime is indeed complex, but with the right advice you can navigate it and take advantage of any expat-specific considerations.

In summary, key tax points are: income tax on rents, capital gains tax on sale, and state taxes like stamp duty and land tax. Being aware of these from the start means no nasty surprises later. With good planning, you can still greatly benefit from your investment – and remember, things like capital growth and having a foothold back home often outweigh the tax costs in the long run. Always keep good documentation and get professional tax advice tailored to your situation.