Australian living overseas. Is the grass greener?

[waz22]

Answering that may be easier if a particular profession was stated

Construction Project Management

 

[Archipelago]

Moving back to the original OP...

Once you are overseas you arent taxed on Australian income where as if you live in Australia you are taxed on any income world wide.

Not quite correct, see my previous post. You are still required to pay tax on any Australian income earned, and it is charged in the tax bracket of your total earnings, both in Oz and overseas.

Since Asia is a good hub for business there would be heaps of opportunities to travel around and could easily visit places and jet back to Australia now and then.

Totally true with this one. On an expat employment package you will fare far better than if you are self employed - travel can be negotiated and it will likely be on legacy carriers (getting J on a package is a bit more difficult these days, unless you are in a high position career wise.
Aside from included travel - it is SO much better for airfares and flight options in 2017 than it was 20 years and even 10 years ago.
Heaps of competition within Asia for airlines - lots of promotion fares, and regionally the low cost carriers offer good service for the relatively short routes.
Learn the tricks and tips on how to make travel on the LCC's better, and you will save a fortune without getting frustrated amongst the masses, so to speak (I have MUCH experience with this, travelling very frequently in and around Asia)

Another bonus in 2017 which has recently become clearer to me compared to the past 5 years - with the influx of LCC's, it is apparent to me now that the Legacy carriers are offering better deals at certain times, to compete. I was travelling 100% low cost carriers 5 years ago - now I am able to find the odd good deal (even in J, making some flights choices for me better than Y). Now I'm travelling about 20-30%% full service airlines and the remainder on LCC's.

Is the grass greener once outside Australia in terms of income and ease of employment or is this a relic from 30 years ago when places like Singapore and Asia were all the rage.

Cost of living and lifestyle for expats

Its very hard to make a general comment on this to help the OP.

Is the grass greener compared to 30 years ago? Probably not. In IT (the OP's example) there is a well trained couple of generations of nationals in Asian countries who are as good as, if not better, than a first-time Oz IT expat wanting to experience the overseas job market.

I myself ended up here in a totally niche position in a weird industry which could not be done by a local 20 years ago. That has changed a lot - and I am no longer in that industry (it really is a niche job haha). I still do the odd consulting in my original industry, but I have diversified and work as a consultant in several other positions in totally different fields, purely due to my experience here, my language abilities, and my contacts. I wonder these days, if I landed here today for the first time, would I be able to find a job and make a comfortable living here? Most wouldn't in 2017.

That aside it is TOTALLY dependant on the position, salary, city/country, accommodation, and benefits of the expat job.
Even in the same country - different jobs and packages will mean vastly different experiences for a new expat

Example - you may land a great expat position in a multinational company - with excellent salary and benefits package. I find that most expats in this situation end up living in an artificial bubble. You live in an expat enclave or hi-so area of the city, visit high end supermarkets and malls, eat in 5 star hotels and restaurants - and you may never get to fully experience the country or city you are living in. Your social circles are other expats or high positioned locals in similar living conditions.
This leads to my next point/bit of advice for an expat considering living in Asia/elsewhere:

Language and Culture

Of course one bit of advice you will always hear from anyone who knows you are moving to, or going to travel in - a foreign country. Learn the language.
But there is a catch! As per my previous point - if you are living in an artificial expat bubble in your new position overseas - language becomes an interesting spanner in the works.

If you are in a job/company where everyone around you speaks English (not just other expat employees, but all of your colleagues, bosses, staff etc) - plus your maid & nanny, driver, and the staff in the shops and restaurants you frequent - you will be less likely to learn the local language.

"Independent" expats - such as teachers, some NGO's, contractors not fully covered by a package - must fend for themselves. They will need to find accommodation locally, and perhaps live in an area where English may not be widely spoken. Then the benefits of learning the local language, culture and nuances becomes more important.

To both ends of the spectrum, I still thoroughly recommend that learning the local language will not only assist your daily working and living - but it will enhance the experience you have of living and working in a foreign country.

I have this conversation frequently around SE Asia with expats. There are those in the first camp who tell me it is pointless for them to learn the language as they don't need to (everyone they interact with daily, both at the office and in their after-hours life - speaks English - so why should they bother?)
On the flipside, the ones living indepedently in a foreign country tend to find that learning the local language is of great assistance - some times it is a necessity.

Whatever your situation as a first time expat (using Asia as an example) - my recommendation is to learn the language regardless of your situation.

 

[Sdtravel]

Those are some good points from Archipelago. Really appreciate your feedback and comments.
Especially your earlier comment about still paying AUS tax on a rental property. As i mentioned when i started the thread one of the reasons for folks had was the low tax benefits. If i did leave i would rent out my apartment i live in which by the sounds of it would mean that I would be taxed on all the income.
Although you mention you were making $5K a year on your investment property. I think I likely wouldnt be at a point where it would be making money off it for quite some time (10-15 years) since i only got it about 2-3 years ago.

Its interesting everyone talks about expat packages. It sounds like they are common place but last time i went looking for a job 3 years ago i dont think i found a lot on seek.com.au or other recruitment agencies i spoke to. Is there some special search or places to go to where these are advertised? Or do they use special recruitment agencies.
It sounds like its better to get the job and package rather than go over and find a job and then packup ones live and make the big shift. While that sounds obvious how much of a reality is it though? Unless you're someone who is in such high demand that anyone will take you i dont see it being that easy to just get an expat package.

Thanks to all who have contributed. Some great discussion so far.

 

[Archipelago]

Hi Sdtravel - the 5k was just an example figure - I was earning more than that, and getting taxed on the whole lot. But its just something to keep in mind.

Keep asking more questions by the way, there are a lot of good contributors here and expats are amongst them (we walk among the living hahaha)

Cheers

 

[Deleted member 29185]

Construction Project Management

You have to work at it. Keep abreast of proposed projects, join expat discussion forums, keep on the lookout through Seek etc, In my case it was a combination of luck, being in the right place at the right time and previous experience.

Especially your earlier comment about still paying AUS tax on a rental property. As i mentioned when i started the thread one of the reasons for folks had was the low tax benefits.

The tax bit mentioned is pretty simple. In my case, I'm an AU tax payer so all income has to be assessed to establish the tax owed. That's income overseas as well as income in Australia. I pay the vast majority of my tax in PNG and that is applied as a foreign tax offset which means you may not owe any tax or you may still owe the difference. The Medicare levy, as an example, is still added based on your total income, yet many countries don't have that levy and it may need you to "top up" the amount you have paid overseas. In my case, PNG tax is more than the Australian tax + Medicare levy, so I owe nothing over and above what was paid in PNG. My AU business does not do a whole lot of work these days so not much tax is payable and remember genuine tax deductions are still allowable which means a negatively geared property still won't have you paying additional tax, but all income adds up which causes the tax bracket problem Archipelago spoke of.

I'm often reminded of what my accountant told me many years ago when I first started in business (yes, I still have the same accountant, 30 + years on), that being that tax is not a problem at all. If you are paying more tax, you are also earning more money, so be thankful!

 

[ermen]

If you can get an expat package (housing, health, education) covering a lot of your expenses it can be a great way to get ahead quickly combined with generally lower tax rates. I grew up as an expat kid and had a lifestyle that we never could have had living in Australia. Living in Melbourne now but may look at OS opportunities in the next couple of years.

Did you grow up a rich, spoilt expat kid?

Where I live, it is generally a problem within the expat community - given that most of them have at least one full-time helper, something you won't really get at home.

The pros as an expat kid are you get a bigger global perspective (like hey Australia is not the centre of the world ) and you make friends from many different nationalities.

The cons are you are perhaps living in a sorta manufactured bubble which is quite divorced from the reality of the "locals".

Having said that, true expat packages are hard to come by these days after the GFC I think...

 

[AisleSeat]

Did you grow up a rich, spoilt expat kid?

Where I live, it is generally a problem within the expat community - given that most of them have at least one full-time helper, something you won't really get at home.

The pros as an expat kid are you get a bigger global perspective (like hey Australia is not the centre of the world ) and you make friends from many different nationalities.

The cons are you are perhaps living in a sorta manufactured bubble which is quite divorced from the reality of the "locals".

Having said that, true expat packages are hard to come by these days after the GFC I think...

I see you live in HK, and from my experience as an expat brat there, it depended where you lived if you had a full-time helper or not. On the island, most likely; out in NT, not as much.
Likewise, with the bubble, I think it came down to where you went to school and where you lived. Schools on the island had a bigger majority of expats, whereas my school was a good mix of locals and expats. I don't think people who went to school on the island left it as much (maybe to go to TST) whereas everyone in my school who lived in the NT travelled all over (simply because it was necessary) and we'd rag on islanders for that all the time. I don't think there was much of a bubble for us; drinking in local bars, talking BS with triads.....and illegal immigrant stake-outs (a story for another time).

One story I remember well: I went mountain biking way out in the NT with my dad cycling from home to up near the border I think. We came down a hill to the sea and pulled up at this little cafe. Inside were some Canadians who lived on the island and were out on a junk trip. They were surprised to hear that expats lived out that far. Now there's a bubble.

 

[travelislife]

Did you grow up a rich, spoilt expat kid?

Where I live, it is generally a problem within the expat community - given that most of them have at least one full-time helper, something you won't really get at home.

The pros as an expat kid are you get a bigger global perspective (like hey Australia is not the centre of the world ) and you make friends from many different nationalities.

The cons are you are perhaps living in a sorta manufactured bubble which is quite divorced from the reality of the "locals".

Having said that, true expat packages are hard to come by these days after the GFC I think...

Whilst we definitely had a privileged lifestyle (maid, driver, etc.) we absolutely were brought up to recognise it wasn't normal. I would actually argue the opposite attitude wise to what you have outlined! I had a mix of secondary schooling at International Schools overseas and private Australian boarding school. A lot more rich, entitled, spoilt kids in the Australian private school system with no appreciation of other cultures than I found in the (more expensive!) international school system.

The international school system is almost devoid of bullying due to no 2 people being the same and the mix of cultures/races/background (50+ at every international school I went to) and also the transient nature (you get a much more varied friendship group) of a lot of expat families moving on every 2-3 years elsewhere. Compare that to the Australian private school system where bullying and the need to 'conform' is rife.

 

[ermen]

Whilst we definitely had a privileged lifestyle (maid, driver, etc.) we absolutely were brought up to recognise it wasn't normal. I would actually argue the opposite attitude wise to what you have outlined! I had a mix of secondary schooling at International Schools overseas and private Australian boarding school. A lot more rich, entitled, spoilt kids in the Australian private school system with no appreciation of other cultures than I found in the (more expensive!) international school system.

The international school system is almost devoid of bullying due to no 2 people being the same and the mix of cultures/races/background (50+ at every international school I went to) and also the transient nature (you get a much more varied friendship group) of a lot of expat families moving on every 2-3 years elsewhere. Compare that to the Australian private school system where bullying and the need to 'conform' is rife.

Those are actually really good points.

 

[dajop]

Time to clear up the tax issue which has been touched on a few times in this topic:
In the early years as an expat working overseas, I had property in Australia, plus income from shares etc.
Rule of thumb - 183 days or more per year overseas to qualify as non-resident of Oz for tax purposes.
However - when calculating tax payable in Australia (eg income from a rental property, capital gains on share disposal - whatever) - you are required to declare TOTAL income earned overseas for the purposes of calculating the tax payable in Australia.

This is not how it currently operates. For foreign tax-residents generally*
1) You are not asked to declare foreign income, nor any local income from which withholding tax has been taken (bank interest, unfranked dividends), nor income exempt from tax (fully franked dividends, capital gains other than for taxable Australian property).
2) You generally only declare capital gains on taxable Australian property, and for most individuals this does not include shares (although for shares and the like , you need to declare/pay CGT for anything you didn't elect to pay CGT on when you left AUS).
3) There are specific brackets for Australian income of foreign residents (eg first bracket is 32.5c ) The resident tax rates and tax free threshold do not apply.

* may vary depending on individual circumstances of course, but for most of those meeting the rules of "foreign tax resident" this applies. Different to Australian tax resident working overseas, which gets complicated.

 

[AisleSeat]

The international school system is almost devoid of bullying due to no 2 people being the same and the mix of cultures/races/background (50+ at every international school I went to) and also the transient nature (you get a much more varied friendship group).

This x1000.

 

[dajop]

Moving back to the original OP...
.....

Whatever your situation as a first time expat (using Asia as an example) - my recommendation is to learn the language regardless of your situation.

From what I hear for much of Asia most of what you say is true, but probably doesn't apply so much to Singapore, as increasingly expats, even within MNC's, are employed on local packages and do have to largely fend for themselves. Whilst there any still swathes of expats still in living in traditional expat areas on expat packages (particularly those from USA) there are lots of us living in private condos in (and some even in rented HDBs) well away from the main expat bubbles. Language here is also difficult to get stuck into Mandarin or Malay when English is so widespread in its use (although have learnt some Singlish ) . Whilst I enjoy my hawker food and commute/get around via MRT, I have met expats who've never eaten at hawker stalls ("too dirty") or ever taken the MRT (too many commoners and "smelly people") On the latter (not riding on MRT) one made a comment on social media to that effect and was hounded out the country ...

 

[birder]

We're Americans who moved to Australia for better quality of life. We certainly won't move back to the US. It's much safer here, with a much greater access to nature, and higher pay. Plus, the political discourse in the US is so divisive - it infects everything. In Australia, you have a mix on the political spectrum but at least you are not dealing with idiots who claim everything is fake news. Plus the health care here is so much better, as is the educational system.

The downsides? Bullying is rife here - much worse than in the US (and New Zealand, where we also lived). There's a bit of mentality that you expect to either be a bully, or be bullied. I've seen people treated horrifically on the job - if they were in the US, they would sue for millions of dollars and win. So that type of behavior is much rarer in the US because you could be held accountable.

The other two main downsides: shopping and home prices. I do miss shopping in the US but I go back at least once a year for work, so I just bring empty suitcases and fill them up with bargains. Also, I do find the home prices in Australia absolutely unbelievable -- and if the bubble does burst, all the people with upside-down mortgages will be in trouble. In the US, if you walk away from a mortgage for financial reasons, it goes onto your credit report, but that's it. Australia takes a much harsher tack.

That said, we wouldn't move back to the US for anything, even though we miss family and friends. Australia is a far better place to live and raise kids -- just have to bully-proof them.

 

[Deleted member 29185]

Bullying is rife here

Bullies should never be tolerated. Having said that though, political correctness in the US and AU is beyond a joke IMHO.

I was almost shocked when I first arrived in PNG. As an example, the PC way of referring to skin colour here is Expat or National, however PC speak is pretty much entirely confined to expats, nationals are not burdened by such. Once I had a book left on my desk and I wondered who it was from. I asked a young trainee lady who was working in the office at that time, "was the person who left it an expat or national"? She looked at me as if I was from Mars. My longer term secretary then simply said to her "was it a white man or black man", to which the young lady replied happily "oh, he was a black man"! There was no racial overtones and it is certainly not derogatory at all (in either direction), it was simply a statement of fact!

Another time, a national was trying describe to me another national and I just couldn't think of who he meant. In frustration, he said to me "you know, it's that black man". I laughed and said "Tommy, you're all black men". He replied "No, that blacker man"! That actually gave me the missing piece, I then knew straight away who he was talking about, he was the Bougainville guy (because they have much darker skin colour than the coastal mainland PNG people). It's not meant to be racist, simply a very obvious element in a description.

I do understand why we've reached the PC point we're at in Oz, but I can say it's so refreshing to experience just plain matter of fact talk, without the overarching worry of an accusation of some kind based on rubbish. PNG people however, swear a lot less than Australians and respect still plays a huge part in PNG life, which is also refreshing! I'm not overly keen though, on their penchant to enact swift justice(?) at the end of a bloody big bush knife!

 

[grreg]

We moved to the UK from Melbourne and love it here.
Immigration visa's haven't been mentioned much in this thread - but they are super important regardless of where you go.

Tax has been mentioned a few times. Please, please pay to get proper advice if you are moving abroad. It's likely your local 'suburban' accountant won't have a clue about all the curly rules for non-resident tax payers.

My biggest tip - If you have a SMSF and become non-resident you are possibly in a world of trouble. (ie the ATO can confiscate half of the assets from your SMSF). No one ever tells you about that one!

 

[mrs.dr.ron]

We moved to the UK from Melbourne and love it here.
Immigration visa's haven't been mentioned much in this thread - but they are super important regardless of where you go. ................

Yes, my SIL had a heap of trouble getting hers for the UK and she had married an English man !!!

 

[Jacques Vert]

Very common in the teaching world. Free housing, free flights, free healthcare, free top notch education for your kids. Good salaries at the top schools.

Would that include teaching English as a second language?

 

[travelislife]

Would that include teaching English as a second language?

Depends who for. I am talking about the private international school system which has a few tiers in every country. Somewhere like Bangkok probably has 5 top tier international schools, these are the places that will offer full expat packages (accom allowance, health, education, etc). Much like the private education system in Australia these are private schools charging high fees (often USD$30,000+ PA) delivering Primary and Secondary education. Curriculum is often the International Baccalaureate (IB), GCSE/A Level (British) or the American System. There is often one of each in the big Asian centres.

 

[Sdtravel]

Archipelago are you sure your tax bracket take into account your foreign income?
So my parent lives in HK (where he is wanting me to move to) and he has an investment property in Sydney still. He said he only pays tax on that property and income. His tax bracket calculation doesnt take into account income from HK.
eg 100K income in HK $5K income in AUS. Tax is calculated on the $5K. Not as if it was $105K.

Am i misunderstanding what you were talking about earlier??

 

[dajop]

Archipelago are you sure your tax bracket take into account your foreign income?
So my parent lives in HK (where he is wanting me to move to) and he has an investment property in Sydney still. He said he only pays tax on that property and income. His tax bracket calculation doesnt take into account income from HK.
eg 100K income in HK $5K income in AUS. Tax is calculated on the $5K. Not as if it was $105K.

Am i misunderstanding what you were talking about earlier??

Yes, the current arrangements for those who are considered foreign tax residents is not counting any foreign income in any calculations. Does not even need to be reported. Income tax is calculated on the $5k in your example using the special foreign resident tax rates which have no tax free threshold, and jump straight to 32.5c in the dollar for first bracket.