FIRE overseas

Anyone retired or have plans to retire early to live in an overseas country with lower living costs with a similar or better life style in countries in Europe Spain/Portugal/ other EU countries or elsewhere? What are the best way to invest in Aus or Overseas stocks which will have no tax implications of being a tax resident elsewhere?

 

I plan to spend lengthy periods overseas. Currency is a risk no matter where you live. I will consider myself an Australian citizen for tax purposes, my investmentswill remain domiciled in Australia. I assume money transfer is not prohibitively expensive. Do you intend on earning money in overseas country? If not, what are the foreseeable the tax implications? Are you concerned about transferring large sums?

 

I'm interested in the spain/portugal option. Need good tax advice to ensure no double taxation (portugal doesn't have a tax treaty with australia). Not as simple as just following the 180/183 day rule. Like @Zenith Chaos I'd keep everything domiciled in Australia, ING makes it cheap and easy to pay by cash or card in euros.

 

Was looking at spending some time OS and looking for a place to spend the second summer.
Most likely not EU or not for long.
That probably won't happen for a few years no until the drama settles.

Zenith I think you're confusing residency with citizenship.
You pay tax where you are resident while still retaining citizenship.

 

A lot of the European counties have death tax. Get a single source of advice on the country you are moving towards and the country you are leaving.

 

My father is doing that. Retired in South Korea. $450K in Super taking 2.5% mandated pension which is about $21K a year. He has US pension of about $10K a year so living off about $30K a year. Has been retired for 15 years approximately and returns to Australia to see family one month a year.

 

@tedjamvor
I heard that some countries will have tax on retirement funds you receive from overseas. For example Portugal will enforce 10% from 2022 for overseas pension amount received.
Without being a tax resident expat will loose social benefits/access to health care locally which is important especially considering what happened in Pandemic.
Is someone invest in Aus shares/ETF which has dividend income then you will have tax in Australia too and I heard some platforms would not allow non residents to trade in. Not sure what are the CGT implications if you plan to sell a large chunk?

 

But he keeps travelling every year back and forth and have a family here. The travel costs and time is again have to consider.

 

Is it worth it with the time spent in Quarantine when you arrive back ?

 

Not sure but @Meisterin would be able to elaborate.
Perhaps, most people plan without knowledge of facing a pandemic.

 

I'm going through this now. Moving to Montenegro in 5-10 years. There is so much to learn, tax etc. My plan has always been to invest everything in lic's and live off dividends overseas. However I've been advised that it is too risky not to have international exposure so I'm researching that now.

It looks like the best way is to invest in world index domiciled in ireland due to taxes.

 

Many countries like Georgia have zero tax on OS income from investments and divs.
Having OS residency still retains your citizenship with all the social benfits.
When Pat Cash was Australian of the year he was a Cannary Island resident.

Also having two passports helps travel.

 

I saw this article recently.

Non-residents or not planning on retiring to Australia — Passive Investing Australia

 

While the idea of FIRE or nomad lifestyle is appealing, the vast majority of content in the space is about living cheap.
For eg you can see endless videos on youtube about living in Georgia for $1200 mth, or Paraguay, Philipines or Panama for $1000mth but if you look closely they are living way beneath what we would call normal.
The houses and apartments are like those available for the same price at Broken Hill.
Sure it may be appealing if you're a pensioner, but for those of us that like a little more luxury even in those places the cost rises quickly.

You could probly find a cheap coastal town in NQLD with cheap rent depending on your situation and lifesyle.
And the weather is probably better too.
https://www.realestate.com.au/property-unit-qld-trinity+beach-432206538?sourcePage=rea:rent:srp-map&sourceElement=listing-tile
This looks better than most I seen at the same price in 2nd world countries, it's closer and in theory no passport needed.

There are some benefits to the 2nd world countries though such as cheap labor and the social life of holiday destination.
Taxation benefits if you have income from business, investments or dividends.

And of course if you really are financially independent and retired you could go for a few weeks and sus it out.

 

Perhaps if they ever fix the taxation rates for Aussie’s living abroad…. Paying more tax when living outside of Australia (particularly for domestic income) & using none of the social services, Medicare etc, is just ridiculous.

It seems to disregard that many Australian single passport holders living abroad are grossly adversely impacted by this stupid taxation arrangement. Living here & paying less tax makes no sense…. None. They should be supporting us living abroad as we are then less of a burden on government spending.

If it weren’t for these stupid taxation laws, I’m sure many would live abroad whilst very happily paying exactly the same tax as they do living here. If you’re retired you aren’t part of the labour force so government should relish self funded Aussie’s going abroad. But they don’t…. Maybe they all failed basic math & economics.

 

We don't intend to 'live abroad' per se, but to spend 3 months in diff countries a few times a year. I guesstimate we'll spend a total of perhaps 4-5 months in Oz every year. Can one do that without triggering any tax resident issues?

 

Looking at Lake Como

 

We preferred Germany, but Italy is the only one we could get a visa. I don't recall the name, but it's essentially a retiree visa- show passive income and a place to live and you're in.

 

Spain is also fairly easy to get no working residency with the non-lucrative visa
Non-Lucrative Residence Visa in Spain: Documents + Requirements