Retire to Australia

Summary: Retire to Australia and find a great new life awaiting you; this article covers the practicalities of retiring to Australia

Australia is one of the most popular destinations for Britons considering retiring abroad to achieve a better quality of life because in general the weather is better in Australia, the pace of life is less frenetic and the cost of living can be considerably lower in Australia than in the UK for example.

Anyone planning to retire to Australia must be aware that the Australian government recently tightened up entry rules and all those hoping to get a visa to reside down under may now face additional hurdles.  This article examines the practicalities of retiring to Australia.

Unless those planning to retire to Australia already have familial ties with the nation they will find it an expensive game trying to get residency permissions.  Basically the Australian immigration service changed the rules so that those with no previous ties to the nation now have to prove they will have an annual income of at least GBP 20,000 and that they have available to them almost a quarter of a million pounds in a lump sum, half of which the government takes and holds for four years once they’ve granted permission to the person in question to live in Australia.

Naturally enough this can work out to be restrictively expensive for many people and those certain that they will want to retire to Australia might like to consider moving prior to retirement and applying for residency under the terms of other visa types such as an employment or business visas.

Once residency has been permitted those moving to Australia have to begin severing all ties with their home nation permanently if they are to benefit from the fact that Australia has abolished death duty taxation.  To be deemed non-domiciled in your original home nation you have to close all links such as bank accounts or property ownership ‘back home’ and prove your commitment to reside permanently in Australia.  This can be a tricky affair but it is well worth undertaking because as stated, Australia does not levy inheritance tax.

Australia and various nations such as the UK have a double taxation agreement in place so that people do not suffer double the amount of tax.  Having said that income tax on pension income etc., is higher in Australia than it is in the UK.  This is something to take into account when looking at the financial aspects of retiring to Australia.

The cost of living down under can be far cheaper than living in the UK therefore additional income tax paid on a pension income can be negated in this way…but still it’s worth examining closely how much extra will be lost to the tax man when living in Australia.

The next considerations to cover are healthcare and housing.  In Australia it’s necessary to have health insurance and the main local provider is Medicare – however Medicare will not take on a client unless they have been resident in Australia for a year prior to policy application.  This means that a good international health insurance scheme is necessary for at least the first year.

Property in Australia has shot up in value in the most popular cities and states and the property boom has meant that it is no longer easy to buy cheap property in Australia.  The good news is that British house prices have at least kept pace with those in Australia so UK homeowners can effectively swap their old house for a new one down under!  There are no restrictions placed on international buyers especially if they are now residents in Australia.

The main issue with retiring to Australia for UK citizens is that any state pension they are entitled to is frozen from the day they leave Britain behind – the pension no longer goes up with inflation and this rapidly erodes the real value of the pension payment.  All of these considerations need to be taken into account by anyone seriously and actively researching their ‘retire abroad’ options.

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