There is a lot to consider if you’re moving away from Australian for a long period of your working life. · Getty
There is a phrase we started using around 12 months ago at my company Atlas Wealth Group: ‘the Economic Refugee.’
Not ‘refugee’ in the legal or humanitarian sense, but as a financial description of a growing group of Australians who are not necessarily leaving because they dislike Australia. They are leaving because they feel they can no longer get ahead in Australia.
At first, it was something we were seeing quietly in conversations with clients. Australians were asking about Singapore, Dubai, London, Hong Kong and the United States with a different tone. It was not just the traditional expat conversation about adventure, career development or lifestyle.
Increasingly, the question was more direct: “Where can I actually build wealth?”
The latest Federal Budget will only add to that conversation.
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Every Budget creates winners and losers. This one may also create another group altogether: Australians who begin seriously reconsidering whether their financial future is better served overseas.
The Government has announced a series of cost-of-living measures, including tax relief, support for households and changes aimed at housing affordability. For many Australians, any relief will be welcome. But the deeper issue is that confidence has been badly shaken.
That is not just anecdotal. Recent consumer confidence numbers have shown how pessimistic households have become. ANZ-Roy Morgan Consumer Confidence recently fell to 58.8 points, a new all-time low and the first time the index had ever dipped below 60. Roy Morgan noted that fewer than one in eight Australians said their families were better off financially than a year earlier, while a majority said they were worse off.
That is where the Budget becomes a trigger point.
Australia risks losing its lustre as complexity reigns
For younger professionals, business owners, investors and skilled workers, the question is no longer simply whether Australia is a great place to live. It is whether Australia is still the best place to get ahead financially.
Housing remains central to this. The Government’s proposed changes to negative gearing and capital gains tax from 1 July 2027 will be watched closely by investors.
Negative gearing support is set to be focused on new builds, while the 50 per cent CGT discount is proposed to be replaced by an inflation-based approach with a minimum 30 per cent tax on gains. Existing properties held before Budget night are expected to be treated differently from properties purchased later.
Some will view these measures as necessary reform. Others will see them as another sign that the rules for building wealth in Australia are becoming more complex.
That complexity is one reason more Australians are comparing their options internationally.
Tax implications when leaving Australia
Singapore, the United Arab Emirates, Hong Kong, the United Kingdom and the United States all remain attractive for different reasons. For some Australians, the appeal is a higher income. For others, it may be lower tax, faster career progression, business opportunities, housing support, school fee support or simply the ability to save more of what they earn.
But moving overseas is not as simple as chasing a bigger salary.
One of the biggest mistakes Australians make is comparing gross income in one country with gross income in another. Real financial planning starts after tax. You need to understand rent, schooling, healthcare, insurance, currency, travel, pension or superannuation treatment, and what happens to your Australian assets while you are away.
Tax residency is usually the first major trap. Leaving Australia does not automatically mean you stop being an Australian tax resident. The ATO will look at your full circumstances, including where you live, where your family lives, how long you are away, whether you maintain a home in Australia and the strength of your ongoing ties.
Getting that wrong can be expensive. You may find yourself living overseas but still exposed to Australian tax obligations.
There is a lot to consider if you’re moving away from Australian for a long period of your working life. · Supplied
Capital gains tax also needs careful planning. When Australians cease tax residency, certain assets can be subject to a deemed disposal, although choices may be available. Australian real property generally remains within Australia’s tax net even after you leave. That means the timing of selling a property, restructuring a portfolio or returning home can materially affect the outcome.
Superannuation is another area people often overlook. Australians working overseas may stop receiving compulsory employer super contributions, but they still need to think about insurance inside super, contribution caps and whether time overseas creates a long-term retirement shortfall.
Then there are the practical issues. Estate planning can become complicated when you own assets in more than one country. Life insurance may not work as expected once you are living abroad. HELP debts still need to be managed. Bank accounts, mortgages, company directorships, trusts and family structures can all create unexpected problems.
This is why the better question is not, “Should I move overseas after the Budget?”
The better question is: “What does my financial life look like if I stay, or if I leave and if I come back?”
For some Australians, the answer will still be to stay. Australia remains a high-quality country with strong institutions, opportunity and lifestyle advantages that should not be dismissed. But for others, the Budget will be the moment that turns a casual thought about moving overseas into a serious financial plan.
The expat strategy of wealth building
That is the point behind the term ‘Economic Refugee’. It describes Australians who still love their country, but feel they need to leave it for a period of time to create the financial momentum they cannot generate at home.
A well-planned move overseas can accelerate savings, broaden career options and open up opportunities that may not exist domestically. But a passport stamp is not a strategy.
Before making the move, Australians should model the full picture: income, tax, housing, Australian property, investments, superannuation, debt, insurance, estate planning and the likely return-home date. The people who benefit most from living overseas are rarely the ones who simply chase the biggest salary. They are the ones who understand the rules before they leave, structure carefully while they are away and plan their return before they need to come home.
The Budget may not cause Australians to leave the country. But it will make many more ask the question.
And with consumer confidence at record lows, housing still difficult and many households feeling they are going backwards, that question is becoming harder to ignore.
Brett Evans is the founder of Atlas Wealth Group and the author of The Expat’s Handbook.
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