Keeping a storage unit full of furniture, leaving a car registered in your name, or holding onto a local gym membership can each be used by the ATO as evidence that you never really left Australia, even if you have lived overseas for years. Under Taxation Ruling TR 2023/1, the ATO’s Resides Test looks closely at the maintenance and location of personal assets, and it treats a car, stored household items, or a local club membership as behavioural evidence of a continuing connection to Australia. None of these things will decide a case on its own, but together they build a picture the ATO uses to argue you remained an Australian tax resident while living abroad.
TL;DR
- The ATO’s Resides Test examines where you keep assets like cars, furniture, and memberships as part of determining tax residency test Australia outcomes.
- TR 2023/1 is the current guidance document and specifically names cars, storage of household items, and gym or club memberships as relevant behavioural factors.
- Real AAT decisions, including Quy v Commissioner of Taxation [2024] AATA 245 and Dempsey v FC of T [2014] AATA 335, have turned on exactly these kinds of retained assets.
- There is a legal difference between maintaining an abode (a place you actually live and run your daily life from) and simply holding property or possessions in Australia.
- No single asset determines residency; the ATO and AAT weigh the whole pattern of your life, not one storage unit or one car rego.
About the Author: This article is written by the team at ODIN Tax, a Registered Australian Tax Agent practice that has prepared tax residency determinations for 2,300+ Australian expats across 40+ countries, led by Tax Director Pau Lam, who has spent more than a decade specialising in Australian expat tax matters.
What Is the ATO’s Resides Test and Why Does It Look at Personal Assets?
The Resides Test is the first and most heavily litigated of the tests the ATO applies when assessing whether someone is an Australian tax resident. Under this test, the ATO assesses the maintenance and location of assets by examining where an individual organises their financial affairs and whether they purchase or maintain assets such as dwellings, motor vehicles, and household effects. The logic is straightforward: a person genuinely living overseas usually restructures their life around that new location, selling the car, closing local memberships, and shipping or disposing of furniture rather than paying to store it indefinitely.
When someone keeps these things instead, the ATO treats it as a signal, not proof, that Australia is still the place they consider home. This is why residency determinations rarely hinge on one document like a lease or a flight itinerary; they hinge on a cumulative pattern of ordinary, everyday decisions.
Which Specific Assets Does the ATO Flag as Residency Indicators?
ATO public guidance, including TR 2023/1, explicitly names several categories of personal assets and habits as indicators of a continuing connection to Australia. This ruling consolidated and replaced the older TR 98/17 and IT 2650 rulings, bringing residency guidance into one current document.
- Motor vehicles: Keeping a car registered, insured, and roadworthy in Australia while living abroad.
- Storage units: Paying to store furniture, personal effects, or household items rather than selling or shipping them.
- Gym and club memberships: Maintaining an active local membership that implies you intend to return and resume using it.
- Bank accounts and financial affairs: Continuing to manage the bulk of your financial life through Australian institutions.
- Property: Retaining a home, whether occupied by family, tenanted, or left vacant.
None of these are disqualifying on their own. A car in storage while you are on a two-year secondment reads very differently to the ATO than a car, a rented storage unit, and an active gym membership all held simultaneously by someone who left five years ago and shows no sign of returning.
How Has This Played Out in Real AAT Decisions?
This is where the theory becomes concrete. Specific AAT decisions have weighed these exact factors, and the outcomes show how much detail the tribunal is prepared to examine. In Quy v Commissioner of Taxation [2024] AATA 245, retaining vehicle registrations influenced a finding of Australian residency. In Dempsey v FC of T [2014] AATA 335, the tribunal evaluated the storage of furniture and a car as part of its overall assessment of whether the taxpayer had genuinely relocated.
What both cases illustrate is that the AAT does not treat these assets as trivial administrative leftovers. A stored car or a unit full of furniture becomes a data point the tribunal weighs against everything else: where the person worked, where their family lived, how often they returned to Australia, and whether their overseas arrangement looked permanent or temporary. The lesson from this case law is that people often underestimate how much weight small, seemingly practical decisions carry once they end up in front of the AAT.
Why Does an Everyday Decision Like Storing Furniture Carry Legal Weight?
Building on the case law above, the harder question is why something as mundane as a storage unit becomes legally significant at all. The answer lies in how residency tests work as a whole: they are not checklist tests with a single decisive factor, they are evidentiary tests built from inference. The ATO and AAT cannot read someone’s mind about whether they intend to return to Australia permanently, temporarily, or not at all. So they infer intention from conduct.
Think of it like a detective piecing together a timeline from receipts and habits rather than a signed confession. A storage unit costs money every month. Paying that cost only makes sense if you expect to use those items again, and “again” usually implies “back in Australia.” A car sitting registered and insured implies the same thing: someone expects to drive it again soon, in Australia. A gym membership implies routine, and routine implies a life based somewhere. None of these are conclusive by themselves, but each one nudges the inference toward “this person’s life is still centred on Australia” rather than “this person has relocated.”
What Is the Difference Between Maintaining an Abode and Simply Owning Assets?
A related but distinct question, and one that trips up a lot of expats, is the difference between maintaining an abode and merely holding property or possessions. Maintaining an abode involves establishing a physical place of residence where one lives and conducts their daily routine, whereas simply holding personal property is merely an asset indicator. The ATO notes that owning property or maintaining a residence does not automatically mean a person resides there if their ordinary course of life occurs overseas.
In practice, this means a rental property with tenants in it, managed by a property manager, with no personal belongings inside, is treated differently to a family home sitting furnished and available for the taxpayer’s use whenever they want it. The first looks like an investment. The second looks like a home base you are keeping warm. This distinction matters enormously in a tax residency test Australia determination, because it separates ordinary investment or storage decisions from evidence of an ongoing personal life in Australia.
What Should Expats Actually Do About Cars, Storage, and Memberships Before Leaving?
This is general information based on published ATO guidance and case law, not personal tax advice. Every expat’s residency position depends on their specific facts, and a formal consultation with a Registered Australian Tax Agent is the appropriate way to get a determination tailored to an individual’s circumstances.
Stepping back from the legal detail, the practical question most expats actually want answered is what to do about these assets before or after departure. There is no universal answer, because the right approach depends on the full context of someone’s move, including how long they plan to be away, whether family remains in Australia, and how the rest of their residency position is structured.
What can be said generally, based on the patterns in TR 2023/1 and the AAT decisions above, is this:
- Consider whether keeping a car registered and insured genuinely serves an ongoing purpose, or whether it mainly signals an expectation of return.
- Review what is actually in a storage unit. Essential documents and a handful of items read differently to a fully furnished household kept “just in case.”
- Think about memberships and subscriptions as part of the same evidentiary picture as property and bank accounts, not as separate, irrelevant conveniences.
- Document the intention behind each asset decision at the time it is made, since residency disputes are often assessed years later.
Frequently Asked Questions
Does owning one car in Australia automatically make me a tax resident?
No. A single retained asset is one factor among many. The ATO and AAT look at the whole pattern of a person’s life, not one asset in isolation.
Is a storage unit worse than owning a house for residency purposes?
Not necessarily. A tenanted, professionally managed property can read as an investment, while a storage unit full of personal household items can read as evidence someone expects to resume their old life in Australia. Context matters more than the asset type.
What is TR 2023/1?
It is the current ATO taxation ruling on individual tax residency, replacing the older TR 98/17 and IT 2650 rulings, and it explicitly discusses cars, storage of household items, and memberships as residency indicators.
Can the AAT really rule against someone because of a car registration?
Yes. In Quy v Commissioner of Taxation [2024] AATA 245, retained vehicle registrations were part of the factors that influenced a resident finding.
Is there a fixed number of days that guarantees non-resident status?
The 183-Day Test is one of several tests the ATO applies, alongside the Resides Test, the Domicile Test, and the Commonwealth Superannuation Test. No single test operates in isolation, and thresholds are set out in current ATO guidance for each financial year.
Should I sell my car and empty my storage unit before I leave Australia?
That depends entirely on individual circumstances, including intended length of stay overseas and overall residency strategy. This is general information, not personal tax advice, and a proper assessment requires a formal consultation.
Does gym membership really get mentioned in ATO guidance?
Yes. TR 2023/1 specifically references gym and local club memberships as behavioural indicators the ATO considers relevant to residency status.
About ODIN Tax
ODIN Tax is a Registered Australian Tax Agent practice built specifically for Australian citizens and permanent residents living overseas, part of ODIN alongside ODIN Mortgage. The team has prepared tax residency determinations and returns for 2,300+ Australian expats across 40+ countries, holding a 4.9/5 Google rating from over 400 verified client reviews. Because residency determinations often intersect with property, mortgage structuring, and CGT exposure, ODIN Tax works alongside ODIN’s mortgage and conveyancing specialists so that residency strategy, property ownership, and tax outcomes are each evaluated within the full context of your circumstances. This article reflects general information based on published ATO guidance and case law, not personal tax advice for any individual’s circumstances.
If you are unsure how a car, storage unit, membership, or property back in Australia might factor into your own residency position, get in touch with the team at ODIN Tax to arrange a formal consultation.
