Keeping an Australian Rental Property While Living in Hong Kong: Tax Rates and the 15% Withholding
If you keep an Australian rental property after you become a foreign resident, the rent stays Australian-source income and is taxed at foreign resident rates from the first dollar. For 2025–26 the foreign resident rate is 30c for each A$1 up to A$135,000, because foreign residents have no tax-free threshold. These figures and the points below come from ATO pages checked 2026-10-10.
Is rent from my Australian property still taxed in Australia?
Yes. The ATO states that rent from Australian property remains Australian-source income for a foreign resident. It is taxed at foreign resident rates rather than resident rates. It is also not covered by the final withholding that applies to some other income types, such as interest, dividends and royalties.
What tax rates apply to my rental income?
The ATO’s foreign resident rate page applies these rates to an individual who was a foreign resident for the full year. Foreign residents are not required to pay the Medicare levy. The Australian income year runs from 1 July to 30 June.
| Taxable income (A$) | Foreign resident, 2025–26 (same as 2024–25) | Foreign resident, 2026–27 |
|---|---|---|
| 0 to 135,000 | 30c for each A$1 | Not stated on the official page checked |
| 135,001 to 190,000 | A$40,500 plus 37c for each A$1 over A$135,000 | Not stated on the official page checked |
| 190,001 and over | A$60,850 plus 45c for each A$1 over A$190,000 | Not stated on the official page checked |
The foreign resident page checked listed years up to 2025–26. It did not show a 2026–27 foreign resident table.
For comparison, the ATO’s resident rates are lower in the lower bands because they include a tax-free threshold. They also do not include the 2% Medicare levy.
| Taxable income (A$) | Resident, 2025–26 | Resident, 2026–27 |
|---|---|---|
| 0 to 18,200 | Nil | Nil |
| 18,201 to 45,000 | 16c for each A$1 over A$18,200 | 15c for each A$1 over A$18,200 |
| 45,001 to 135,000 | A$4,288 plus 30c over A$45,000 | A$4,020 plus 30c over A$45,000 |
| 135,001 to 190,000 | A$31,288 plus 37c over A$135,000 | A$31,020 plus 37c over A$135,000 |
| 190,001 and over | A$51,638 plus 45c over A$190,000 | A$51,370 plus 45c over A$190,000 |
The ATO page does not set out how the rates apply to a part-year foreign resident, so that case is not stated on the official page checked.
Does leaving Australia trigger tax on my property?
Not on its own. When you stop being an Australian resident, the ATO treats you as having disposed of most CGT assets at market value on that day. Taxable Australian property is the exception. Real estate in Australia is taxable Australian property, so it is not deemed disposed of when you leave. Listed shares are an example of an asset that can be deemed disposed of on departure, because they are not taxable Australian property.
Because the property is not deemed sold, you do not pay tax on its increase in value at the point you leave. The gain is assessed when you actually sell.
Can I claim the main residence exemption when I sell?
Generally no. The ATO says foreign residents cannot claim the CGT main residence exemption for property sold after 30 June 2020, unless they satisfy the life events test. Both of these conditions must be true:
- You were a foreign resident for a continuous period of 6 years or less.
- During that period, one of these occurred:
- you, your spouse or your child under 18 had a terminal medical condition;
- your spouse or your child under 18 died; or
- the CGT event happened because of a formal agreement following the breakdown of your marriage or relationship.
If you are a foreign resident when you sell and do not meet the life events test, you get no main residence exemption at all. This applies even if you lived in the home for part of the ownership period. There is no partial or apportioned exemption and no “home first used to produce income” rule.
Whether you are a resident or a non-resident at the time of sale matters here. Leaving Australia or holding a Hong Kong visa does not automatically make you a non-resident. The ATO decides residency on facts and circumstances under its own tests. The six-year absence rule applies to Australian residents who rent out their home, and the ATO states it sits alongside the foreign resident rule. It does not extend the exemption once you are a foreign resident at disposal.
If you are an Australian resident when you sell, the foreign resident rule does not affect you. The ATO also states that the disposal time is when you enter into a contract, or when you settle if there is no contract.
For a sale by a foreign resident, the ATO page checked says the full 50% CGT discount is generally not available for assets acquired after 8 May 2012. An apportioned discount may be available for the part of ownership when you were an Australian resident.
What is the 15% withholding, and can it be reduced?
From 1 January 2025, a 15% rate applies to the value of all Australian real property sold. There is no minimum price threshold.
Unless the seller gives a clearance certificate, the purchaser must withhold 15% of the sale price and pay it to the ATO. The clearance certificate is for Australian residents. A certificate is valid for 12 months from issue, and each owner on the title needs their own.
A foreign resident seller can apply for a variation to reduce the withholding rate. The ATO gives the example of a case where the tax owed will be less than 15% of the price. The variation process itself is not set out in the pack.
The amount withheld is not the final tax. The seller claims it as a credit when they lodge the tax return for the year the contract was signed. Individual cases need a registered tax agent in Australia.
Whether state land tax or absentee owner surcharges apply to your property is not stated on the official page checked.
What about Hong Kong tax on the rent or the sale?
The Hong Kong pages checked from the Inland Revenue Department (IRD) say salaries tax is charged on income from an office, employment or pension. Those pages do not describe a general capital gains tax on individuals’ investment gains. That is all they say on this point, and no legal conclusion is drawn here.
The IRD pages checked also do not cover profits tax for businesses or Hong Kong property stamp duty rates. Hong Kong’s year of assessment runs from 1 April to 31 March.
Individual cases need a qualified Hong Kong tax adviser.
Frequently asked questions
Does the 15% withholding mean I pay 15% tax on the sale?
No. The ATO states that the amount withheld is not the final tax. The seller claims it as a credit when lodging the return for the year the contract was signed. A variation can reduce the withholding rate where the tax owed will be lower.
Can I keep the main residence exemption if I lived in the home?
Only if you meet the life events test. Living in the home is not enough on its own. You must have been a foreign resident for 6 years or less in a continuous period, and one of the listed events must have occurred during that period.
Does moving to Hong Kong automatically make me a non-resident?
No. The ATO decides Australian residency on facts and circumstances under its own tests. Leaving Australia or holding a Hong Kong visa does not automatically change your status.
Does leaving Australia trigger a tax bill on my rental property?
Not by itself. Taxable Australian property such as real estate in Australia is not deemed disposed of when you leave. The position on a later sale is covered by the main residence and discount rules.
Who should I ask about my own situation?
Individual cases need a registered tax agent in Australia. Hong Kong questions need a qualified Hong Kong tax adviser.
Sources
Pages checked 2026-10-10.