Join Australia's most dynamic and respected property investment community

Non resident for tax purposes... any implications for loan or insurance?

Discussion in 'Property Finance' started by Abooking, 12th Sep, 2015.

  1. Abooking

    Abooking Well-Known Member

    Joined:
    24th Jun, 2015
    Posts:
    52
    Location:
    nsw
    HI there

    I dont have the time or ability to read through pages of fine print and thought I would ask some of the resident experts on this forum instead. I will be changing my tax status to be that of a non resident soon- at the ATO. The accountant is doing my return now.

    This year I refinanced with a big4 bank and fixed for 5 yrs. Ive had insurance with a leading insurer for ages.

    I will soon have to advise the bank (that I re-financed to) that I have changed my status to be that of a non resident. They will then charge me withholding tax on the interest that I earn. Obviously then the bank will know and I write to ask if there are any implications for my new loan?

    What about insurance? If I make a claim will they ever know. I dont plan to tell the insurer as I dont see how its relevant. It would be bad though if the house burnt down and they didnt pay a claim due to this factor.

    Even though I hold a nanny state passport, after changing my status to be that of a non resident the govt will take away my medicare card, no entitlement to pension. Cannot renew my drivers license and Ive recently heard that they will take away the bonus rate on the online saver rate. Punish the citizens who leave the country....

    thanks for your advice if you can offer any.
     
  2. Blacky

    Blacky Well-Known Member

    Joined:
    25th Jun, 2015
    Posts:
    1,104
    Location:
    Bali
    Davidst
    Firstly Im not sure how your accountant will 'change your tax status'. Others may know more but I didnt think it was as simple as telling the ATO you were leaving. I may be wrong.

    The bank will probably want to re-evaluate the loan based on your new circumstances. They will take into consideration your foreign earnings (contract) and which currency you are earning money in. I would be careful on how you go about telling them you are leaving Australia.
    Most banks will still lend to expats but they take about 80% of your income into consideration. This depends though on where you are going and what currency you are earning.

    What are you doing with the property? is it rented or will it be rented?

    Insurance - I trust you mean property insurance? I would just contact them and advise your new address and that you are moving overseas. It shouldnt impact on your insurance, as they are insuring an asset in Australia.

    Personal/life insurance is a different matter.

    You have 5years after leaving Australia before you need to forego medicare.
    I dont understand why you cannot renew your DL? In anycase just get an international licence ($20 from RAC).
    You wont have entitlement to any centerlink benifits while you are non-resident (and nor should you), and no - you wont have pension. However, if/when you return you will have access to it.

    Your tax treatment also changes. So any income you earn will be taxed at 30% regardless of the level of income. You might be able to find better investments than that of a 'bonus saver' account outside of Australia.

    Blacky
     
  3. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    9,043
    Location:
    Sydney
    Loan agreemts vary from lender to lender and over time. Off the top of my head i dont recall reading anything about tax residency in any loan agreements that i have seen.
     
  4. Blacky

    Blacky Well-Known Member

    Joined:
    25th Jun, 2015
    Posts:
    1,104
    Location:
    Bali
    what about "change of circumstance"?
    I have (maybe incorrectly) assumed that the OP is leaving his current job and taking a new one overseas.