If you own property overseas, you need to know about double tax agreements

Many of our clients come from migrant backgrounds, and many families that migrated in the past half century have maintained close links with their homelands, including owning or inheriting property overseas.

Now, inheriting an apartment on a Greek island or a villa in the Italian countryside is a wonderful luxury, but it also creates tax headaches where those assets are used to generate an income.

Often the first question we’re asked is whether people need to pay tax on their overseas asset-driven income twice, once overseas and again in Australia.

The answer in some cases is yes, you do.

But in other cases, Australia has developed double tax agreements with a large number of countries, that ensures Australians with overseas interests in those countries, only pay tax once.

As an Australian resident for tax purposes, you are assessed on your global income, which is reported in your Australian tax return. In cases where a double tax agreement exists and tax has been paid overseas, you would receive a foreign income tax offset for the amount of tax paid overseas.

This is complex taxation law and if you generate an income overseas, you will most likely need expert advice.

As always, if you have any questions, please don’t hesitate to get in touch.