We've been mulling over that question and we've yet to come up with a good answer.
In favor of renting the place out;
1) Our families want us to maintain the home over here, citing the reason - "in case it doesn't work out over there"
2) There is a passive stream of income, which hopefully balances out the rental we'd have to pay in Perth.
3) We do have an emotional attachment to the place - if we do come back, I'd rather come back to the familiar.
In favor of selling the place;
1) There's no greater motivator to succeed than having your back against the wall.
2) We receive a lump sum without worrying about whether the flat will be repossessed by HDB in the event that rental regulations are flouted by the tenants.
3) To rent out the place entails ads, rental agents, management agents, tenants, increased property tax (yes you pay more tax if you're not living in it) and rental income tax.
It was in the midst of reading all these that I came across the issue of double-taxation.
Being a Singapore citizen, I'd be taxed on my rental income but would I be taxed again because I'd be a Australian PR?
The following links are extremely useful in shedding some light on this issue.
1) www.guidmesingapore.com
2) Inland Revenue Authority of Singapore
3) Treasury.gov.au - a list of tax treaties that Australia has with the rest of the world.
4) A case study -
5) Another case study - this one from the Australian Taxation Office - interestingly enough
I have to admit. My eyes started glazing over after a few sentences of taxation technical terms.
The gist of it though is that,
Real estate income (read rental income) is taxed in the country the property is located in. That means we'll be paying the Singapore Govt taxes on our rental income.
This is on top of the property tax that we'll be paying.
Ho hum ... will it still be worthwhile to rent it out then?
On the Australian side, since we'd have paid tax on the rental income in Singapore, we would be able to claim a tax offset on the tax already paid in Singapore. When the Australian returns are processed, we'd receive a refund. (Another admission, read this multiple times but am still confused - will just have to see how it goes, I guess)
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| Suffice to say this is how you will feel. |
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