This is a blog written based on an interview conducted by Tim with Tristan, an expat tax accountant. If you’d like to watch the video, click here.

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Thinking of buying property back in Australia while living overseas? Before you dive in, it’s crucial to understand the hidden costs and tax implications that could affect your bottom line as an Australian expat.

In this article, we unpack insights from Tim Raes, founder of Aussie Expat Home Loans, and Tristan Perry, Managing Director of Tax & Accounting at RP Private, who sat down to walk through the critical (and often overlooked) costs that expats face—ranging from stamp duty and land tax to absentee surcharges, depreciation schedules, and ownership structures.

Stamp Duty: The First (Big) Bill You’ll Face

Stamp duty is a state-based tax, typically around 5% of the purchase price, and it hits upfront. While it's not deductible immediately, it does reduce your capital gain when you eventually sell the property—providing some long-term tax relief.

But expats need to tread carefully, especially if buying with a non-Australian spouse. Tristan warns:

“Even if your spouse holds Australian PR, they may still trigger the foreign buyer surcharge depending on the state. For instance, in NSW, PRs who haven’t spent 200 days in Australia may still be treated as foreign buyers.”

The surcharge can add thousands to your upfront costs, so state-specific advice is essential.

Land Tax: The Ongoing Bill You Didn’t Budget For

Land tax is an annual state-based tax on the unimproved land value of your property—not the market value. Each state has its own thresholds and rules, and if you’re living offshore, you may also be hit with an absentee owner surcharge.

A common pitfall is assuming your property qualifies as your Principal Place of Residence (PPR). Tim explains:

“Some lawyers tick the PPR box by default, even if you’re offshore. Years later, you can get hit with backdated land tax for up to five years plus penalties if you’ve been renting the property.”

Ouch.

Vacancy Taxes: Penalties for Letting a Property Sit Empty

In states like Victoria, properties left vacant for 6 months or more in a 12-month period may incur a vacancy tax—another form of land tax targeting foreign and absentee owners. It’s deductible if you’re earning rental income, but if your property sits idle, it's just cash out the door.

“When clients find out about the vacancy tax, they usually start renting pretty quick,” jokes Tristan.

Depreciation Schedules: Worth the Upfront Cost?

Depreciation is one of the few non-cash tax benefits for investors. If your property was built after 1997 or renovated after 1987, you may be eligible to claim capital works and plant depreciation—think carpets, air conditioners, and hot water systems.

You’ll need a quantity surveyor’s report, which can cost $400–$1,000, but it’s fully tax deductible and can deliver thousands in annual tax savings.

Structuring Matters: Get It Right from the Start

Ownership and loan structuring may seem like administrative details, but for expats, they can have serious tax and borrowing consequences. Putting a non-citizen spouse on the title? Setting up a trust or company? You could inadvertently trigger additional stamp duty or lending restrictions.

Tim sums it up:

“There’s no one-size-fits-all. Some banks penalise non-citizens on the title, so we always structure the deal based on the client’s long-term strategy—not just to please the lender.”

What You Might Forget to Budget For

• ✈️ Travel costs for inspections or auctions (and you may not win!)
  
  
• 🧾 Buyer's agents or building inspections
  
  
• 📑 Conveyancing and legal fees
  
  
• 📉 Depreciation report costs
  
  
• 💸 Interest penalties for late land tax payments (they're no joke)

Final Thoughts: Eyes Wide Open

Buying property in Australia still offers strong long-term returns—but you need to go in with your eyes wide open, especially as an expat. Taxes, surcharges, and hidden costs can stack up quickly if you’re unprepared.

“The best thing you can do is create a cash flow plan that accounts for all the costs—upfront and ongoing,” says Tristan. “Then speak to the right professionals to ensure you’re structuring it properly from day one.”

Over to You

Have you run into unexpected costs buying property from overseas? Share your story in the comments or reach out to chat about how to structure your next investment right.

And if you're thinking of buying soon, let’s talk about how to set up your mortgage and ownership strategy properly—before you sign the dotted line.

👉 Book a free expat lending strategy session