Resident or foreign resident
An Australian resident for tax purposes is assessed on worldwide income and declares everything earned in Australia and overseas, even if it was already taxed abroad. A foreign resident is taxed only on Australian-sourced income; income already correctly taxed at source — such as interest, unfranked dividends and royalties subject to withholding — does not have to be taxed again through a return.
Citizenship plays no part. An Australian who moves abroad on a nomad visa can remain an Australian resident for tax purposes, and the ATO has a dedicated page on living overseas while remaining one.
The four residency tests
If you reside in Australia in the ordinary sense of the word, you are a resident and no other test is needed.
Your domicile is Australia, unless the ATO is satisfied your permanent place of abode is outside Australia.
Present in Australia for more than half the income year, unless your usual place of abode is outside Australia.
Australian Government employees at overseas posts who contribute to the CSS or PSS schemes, with their spouse and children under 16.
If you fail the resides test you are still resident if you meet one of the three statutory tests. The domicile test is the one that catches nomads: an Australian domicile continues until the ATO is satisfied that your permanent place of abode is abroad — and a string of short stays in different countries is hard to present as a permanent place of abode anywhere. The ATO's detailed view is in Taxation Ruling TR 2023/1.
Nomad reality check — The more your life keeps pointing back to Australia — a home kept available, a partner and children there, open-ended travel rather than a settled base — the more likely the ATO is to treat you as still resident, taxable on everything you earn abroad.
How the ATO weighs where you reside
For the resides test, no single factor is decisive and many are interrelated. The ATO may take into account any or all of these:
- the period of physical presence;
- the intention or purpose of your presence — judged by what you do, not only by what you say;
- your behaviour: how you organise your domestic and economic affairs;
- family, business and employment ties;
- where your assets are and where you manage them — bills, bank accounts, insurance;
- your social and living arrangements.
Why nomads keep an Australian domicile
The domicile test is the one that usually applies when an Australian goes to work overseas for an extended period. In the ATO's words, a resident who has always lived in Australia keeps an Australian domicile while absent overseas unless they choose to migrate permanently to another country. While your domicile is Australian, you are an Australian resident unless the ATO is satisfied that your permanent place of abode is outside Australia.
Case law gives those words a practical meaning: "permanent" is contrasted with temporary or transitory rather than meaning forever, and your place of abode is where you live with your family and sleep at night. A settled home abroad, where your household lives, fits that description; a rotating series of short-term rentals across several countries is much harder to present as one. Keep the documents that show where your life is actually based.
Foreign resident rates for 2025–26
| Taxable income | Tax on this income |
|---|---|
| $0 – $135,000 | 30c for each $1 |
| $135,001 – $190,000 | $40,500 plus 37c for each $1 over $135,000 |
| $190,001 and over | $60,850 plus 45c for each $1 over $190,000 |
The table applies to individuals who were foreign residents for the whole year. There is no tax-free band: the 30% rate starts at the first dollar. Foreign residents are not required to pay the Medicare levy.
If you have a study loan
People with a HELP, Australian Apprenticeship Support Loan or VET Student Loan debt may need to declare their worldwide income to the ATO even while living overseas. Check the ATO's rules for overseas debtors before you go.
Capital gains when you stop being a resident
When you cease to be an Australian resident, CGT event I1 happens: assets that are not "taxable Australian property" — shares, including Australian shares, are the usual example — are treated as if you had disposed of them at that time, and any gain or loss goes on your final return as a resident. Australian real property remains taxable Australian property and is not caught by this rule.
As an individual you can choose to disregard these gains and losses. The choice covers all the assets caught by the event at once; those assets are then treated as taxable Australian property, so Australia keeps the right to tax the full gain, including any growth after you leave, when you eventually sell. You don't have to notify the ATO separately — the way you prepare your return shows your choice.
How this meets the nomad visas
If you settle in one country — say Portugal, Spain or Malaysia — and become resident there, the double tax agreement between Australia and that country, where one exists, decides where you are resident for treaty purposes and how double taxation is relieved. If you keep moving between short-stay programmes, the domicile test makes it likely that Australia still sees you as its resident.
Checklist
Run the four tests
Start with the resides test, then domicile, then 183 days; be honest about where your permanent home is.
Document the move
A lease or purchase abroad, family relocation and a settled base support a change of residency.
Decide on CGT event I1
Pay tax on the deemed gains now, or choose to disregard them and keep the assets in the Australian net.
Check your study loan
HELP and similar debts can require you to report worldwide income from abroad.
Update banks and payers
Tell your bank and share registries you are a foreign resident so the right withholding applies.
Related guides: U.S. taxes, United Kingdom, Canada, Italy, from nomad visa to permanent residence.