I am in serious trouble over Land and Absentee tax in QLD

Yet millions of Thais live on less than that!

AUD $12,000 = about 25,000B per month. not many Thais working in Bangkok get this much. Many earn 9,000B per month.

 

Terry as you know thais share living quarters. So three or four in one small room. They also eat street food. Most also live well outside the city centre and travel into bangkok. Thats why the BTS is crowded. They dont need airfares back to australia. They dont need to worry about medical as its government provided.

Our mate who rents a studio in bangkok central pays 12k aud per annum for rent electricity and wifi. No food. No return tickets to oz. No medical. No toiletries. No visa renewal fees. So 12k aud is some shanty hut in udon thani.

12k aud would be difficult but 50k aud would be upper upper end. If you are spending 50k aud in thailand you are doing it wrong. After tax thats more than many australians earn !!! Adjust your lifestyle by the sounds of it. You arent in touch.

I think realistically 25k for thailand would be a decent quality of life.

 

Very true! Problem is the 'farang' tax. Extra costs for foreigners everywhere. Plus a decent health insurance, hospital, medical and visa/immigration costs, rent is always a lot more, return flights, western food (although I try to eat Thai as much as I can but fried foods have ramped up my cholesterol too much so doc said to avoid), etc etc. Living alone away from other westerners is hard unless you can speak Thai as it can get very lonely too.
Many Thais can subsist on that income of course but at least most have family support and a home base. Many foreigners also take on a local girlfriend/wife basically then need to support them and give to the family (I have avoided that trap) and that saps money. If you drink as well you can eat through a lot (I don't).
But point well taken!

 

$25k as a single man/woman is doable, but even then you are going to have a fairly quiet conservative life. $50k I compared to those I have met who have a comfortable life and can afford luxuries, eating out often, entertainment, travel frequently and live in a nice place. Rent is very variable (I was paying $400 AUD per month for a studio). I was living more in the $20k to 25K range but a medical issue changed that. Now that ramps up significantly and is definitely something to consider as a retiree - pre-existing conditions not covered in international health insurance. And Medicare cuts off in Australia after 5 years if you are a non-resident for that long. Plus any income tax has no tax-free threshold. And property of course is subject to full CGT. QLD add Land Tax & Absentee Surcharge! Got to factor is so much as an expat. It's a minefield of traps.

 

Could you get the government pension if you moved back to oz ? And moved into the property ?

 

No. I am under retirement age (medically retired). I exceed the assets threshold to qualify for a pension of any sort otherwise - as not retirement age. This is a quandary for many medically retired people who are granted a lump sum & also cash in their Superannuation to then try to live off until they die or until they can make it to old age pension 67 (probably 70 the way it is going). Hence why many opt to reside overseas in cheaper countries.
Moving into the property would be unsustainable - would need to cover rates, insurance, etc etc. Plus would also lose depreciation benefits (that at least offset some costs) and also cause a 'Capital Event' in that Plant & Equipment purchased during the renovation that can be depreciated would immediately cease forthwith and could never be claimed if I rented it out again.
I would bypass the QLD government's land & Absentee taxes but I would not be able to afford living - forced to sell and once that happens it is a downward spending spiral.

 

50k?? In Thailand??
There are people in Australia and the U.S. who raise ENTIRE FAMILIES on under 40k.
To say that in a place where the average salary and cost of living is under 1/5th of Australia, it costs you 50k/yr, is complete and utter rubbish.

The problem is not an income problem. If you had 50k/yr, you would have the same problem saying you can't live on less than 100k/yr.
$320K and Unable to Save For Retirement | The White Coat Investor - Investing And Personal Finance for Doctors

 

If you exceed the assets test for pensions, then I would have thought you would have other options for an income stream and you wouldn't be locked into an existing QLD IP in order to get something with a similar yield.

 

I agree with you relating to people living on lower incomes. And yes Thai people in the poor provinces do live on a lot less. I am not living on 50k per year BTW. I did not say I was. Please read the post again! It was an ideal figure. I live frugally on far less. I just mentioned that based on discussions with expats who have been there for many years who some do have that income, but most fall far less and often struggle.
Farangs are charged more for everything too. It is a two-tiered pricing system in Thailand (not complaining by the way). For the most part farangs live in places where cost of living is adjusted upwards as well (Phuket for one you will find costs exceeding prices in Australia - way too expensive for me). You need to be realistic, most are not going to be cut out for living in a shanty overlooking a dirt patch somewhere in Udan Thani bored stupid, lonely and isolated and still needing to fulfill immigration reporting requirements and visas etc.
I have already known of a couple of people who committed suicide over financial problems overseas. Suicide is a big deal there and expats falling ill without enough money for proper medical care. Many expats are heading to that age where they need to spend a lot more on health care. Hospitals are very expensive without Medicare etc. Medicines are expensive. Living overseas means higher income tax on any Australian investments. Its a lot more complex than comparing apples with oranges - Thais with foreigners. There will of course always be those who are worse off anywhere. I respect the working class Thai people. Always have. They are the ones I relate with. Not the elites.
I am well aware of the displacement effect of ratcheting up an income and therefore seeming to have to need more and more to live off. Thanks for the link. Have read it before. I am not one of those people.

 

Seriously.?...

 

Thanks for the suggestion,

The assets test for a pension - which a 'Disability Pension' is the only option available actually has an extremely low threshold - so exceeding that threshold is not saying much. And it takes a very long time to qualify.
The QLD IP was bought pre-2017 budget so am now locked in. Stamp duty, buyer's agent fees, legals and renovations to make the place livable (was run down) mean I would need to hold the property for several years (at current property growth projections for Brisbane) to break even. The Land Tax and Absentee Surcharge accumulated over those years will wipe out any Capital Gain profit. So the idea is to try to mitigate loss as much as I can - I will likely though be forced to sell at a significant loss.
The Land and Absentee taxes year-on-year increases (as they are based off land valuations) will supersede rental income eventually. Rent will not be able to increase at the same rate. I would ideally yes like to sell the property and buy in another state, but my buying power will have diminished due to losses - then there are the usual costs to buy back in (Stamp duty again, legals etc). I am not a savvy investor. Just a regular working class Joe so to speak. But I am open to any financial advice. Thanks again.

 

Probably more to it but can't you just create an AU company and then say that you're an employee working overseas, or request someone set up a company that employs you to do whatever? "Public officers and employees of Australian-based companies who are on overseas appointments are exempt."

Edit: Yeap...a lot more too it. Ignore the above.
Edit2: Might be doable but also might be shady. You only need be employed for one year, then you can go on a 5 year job overseas..... Absentees for land tax | Environment, land and water | Queensland Government

https://publications.qld.gov.au/dat...4d4b5c842a68/download/form-lt16-v8aug2017.pdf

Also you could just live like a backpacker .... $1000 a month huge amount to live on. Maybe your medical needs require special attention though.

 

Is newstart allowance still available for you ? Sure you have to go for job interviews every now and the but you probably wouldnt get work. Im no expert on newstart but could it continue until you can get the pension ?

 

Queensland Land Tax & Absentee Surcharge affects all Queenslanders

This is another related thread.

 

Thanks for the ideas!!
Same deal - exceed assets threshold. Total permanent disability - although don't want it to be that way. Would rather work. Already had a good chat with Centrelink some time ago getting all the rundown about all of this before.
Old age pension a bit of a way off yet but was hoping to be self funded retiree capable. I could just sell off everything, spend all my money until it all dries up in ten years lets say, and then claim everything including public housing, get the Health Care card and have the government pay for everything!

You cannot own an investment property and claim the pension. You can own a property and live in it though. Pensions are reduced for anyone residing overseas as well, so you must stay in Australia and restrict travel to 6 weeks. Note: I just read that to retain any reduced pension entitlement, you must have worked for 35 years in Australia from 16 years old to retirement age (16 to 51 years of age minimum) as well!
Plus I actually don't have anywhere to live outside my investment property that I could afford (i.e. renting) long term.

 

Im sorry to say but it really does sound a mess. I truly do feel for you as ive seen many foreigners who struggled to survive in the Philippines. Many died due to health issues they couldnt fix.

I cant see light at the end of the tunnel unfortunately.

 

Btw from a tax perspective it would be quite easy to argue you are resident for tax purposes in australia.

Your domicile is australia and you dont have a permanent place of abode in thailand. you are a transient living in thailand full time. Few cases on this very issue at the moment.

 

For taxation purposes - yes you're right, it is easier to argue the case of still being a resident of Australia for tax purposes (Commonwealth Law). Of course the longer you re overseas, the more difficult it is to convince the ATO.
Queensland of course has their different set of rules they apply under the Land Tax Act for an Absentee and as per my lodged objection regarding their definition of an Absentee and the circumstances surrounding it, they are very specific in it being absent from Australia for 6 months in a financial year. They are quite clear about it not being the same as Commonwealth Legislation either. Just something they decided would be a good idea to add for Australian citizens alongside foreign investors.

 

There would be no grounds to object to this. It is not up to the commissioner to say the law doesn't apply when it clearly does. The law is harsh, but still the law.

Is there a mortgage on the property? One option may be to transfer to a resident company, but you would need someone else to come in as a director too. This would trigger stamp duty, and have other consequences, but could get a resident land tax threshold of $350k but avoid the foreign surcharges.

 

No mortgage - cashed in all of my Super as was given access to it due to TPD status. Company option sounds interesting thanks. But the set-up costs of course would be a big issue to absorb over the immediate term - eating into my existing savings that won't be recouped until I sold the property - versus paying the taxes each year - the goal is to try to hold until I can at least sell at a break even point due to capital gains. Will need to look further into this. Appreciate the feedback.