Property Tax Returns for Australian Expats in the UAE

ATO will expect a tax return if you’re an Australian citizen with an Australian tax file number, even if you no longer earn Australian income.

Expats must pay 32.5% of all Australian income up to $120,000 if they’re non-residents. Any income between $120,001 and $180,000 is taxed at 37%. Income above $180,001 is taxed at 45%. Expats and non-residents don’t have a tax-free threshold.

Please read our Australian Tax Rules for Expats page to learn more about your tax obligations as an Australian expat.

Lodging tax returns in Australia is pretty straightforward, whether in Australia or overseas. You will need a unique Tax File Number (TFN). The Australian Tax Office assigns all Aussie taxpayers a TFN and a MyGov account.

You may need to update the settings to allow you to complete your tax return from overseas. You can submit your tax return online through myTax, the fastest and easiest way to pay taxes.

The tax office will require the following:

1. Your bank account details
2. Proof of net taxable income
3. Proof of expenses and deductions
4. Evidence of private health funds (if you’re required to pay the Medicare Levy Surcharge)

You can find out more on our How to Lodge your Australian Tax Return as an Expat page.

Aside from paying tax on worldwide income or not, there are quite a few differences between Australian tax residents and non-residents.

These differences include the following:

• Tax rates: Non-residents pay a higher tax rate on their taxable income than Australian residents. Plus, there is no free-tax threshold for non-residents; they pay 32.5% on all Australian-sourced income from $0 to $120,000.
• Medicare Levy: Non-residents do not have to pay the Medicare Levy (2%) or the Medicare Levy Surcharge. All residents pay the Medicare Levy. High-income earners pay an additional surcharge of 1 – 1.5%.
• Low and middle-income tax offsets: The low-income and middle-income tax offsets assist Australian tax residents with lower salaries. Non-residents cannot apply these offsets to their taxable income.
• Deductions: Australian non-residents and residents can deduct all income-related expenses from their taxable income.
• Principal residence capital gains tax exemption: Only Australian tax residents qualify for the main residence exemption on their capital gains tax. Non-residents must pay the entire capital gains tax amount.

Australia practices a progressive tax rate system which means your marginal tax rate will depend on your taxable income each financial year. The higher your income, the higher the marginal rates you will need to pay. This applies to non-residents as well.

For example, if you earn $100,000 in a financial year, you will pay 32.5c for each dollar you earn based on tax rates for foreign residents.

You can check out the tax rates for non-residents on our Australian expats page.

Capital gains can be expensive even with the 50% discount method.

The best way to reduce or avoid capital gains tax is to keep accurate cost-based records. Any capital costs, such as stamp duty, are offset against your capital gain. Accordingly, you reduce the net capital gain taxable.

Find out more about capital gains tax for Australian property on our Guide to Capital Gains Tax page.

You must work out your capital gain or loss for each asset you sell during a financial year, such as property or shares. You pay taxes on your net capital gains, i.e. your capital gains, less your capital losses and discounts you are entitled to on your gains.

Non-residents are subject to capital gains tax only on taxable Australian property. Assets you acquired before 20 September 1985 are not subject to CGT.

You may also be eligible for the 50% CGT discount if you acquired assets after 8 May 2012.