Tax Tips for Migrants

Sydney, Aug 1: Moving to a new country comes with many challenges — and for those migrating to Australia, navigating the tax system is often one of them.
From the moment they arrive, new residents must understand how their visa type affects their tax obligations, what income to report, and when to file their first return.
According to Mark Chapman, Director of Tax Communications at H&R Block, a migrant’s visa type plays a key role in determining their tax status.
“If you arrive on a permanent residency visa, you become an Australian tax resident from the day you arrive,” he explains.
“But if you arrive on a temporary residency visa, you’re classified as a temporary resident for tax purposes.”
This distinction matters because temporary residents are only taxed on their Australian-sourced income, not on overseas income or capital gains.
In contrast, permanent residents are taxed on worldwide income from the day they arrive.
“Temporary residents aren’t subject to tax on any overseas income or capital gains,” Chapman says.
“They still get the tax-free threshold and are taxed as Australian residents on Australian income.”
For capital gains tax (CGT) purposes, new permanent residents are considered to have acquired any overseas assets at their market value on the date they arrive. If a migrant later switches from a temporary to a permanent visa, they’re treated as acquiring overseas assets on the date their visa changes.
Your date of arrival also sets the clock for when you need to lodge your first Australian tax return. Migrants must report their income from the date they entered the country to the end of the financial year (June 30). Importantly, new residents are only entitled to a partial tax-free threshold, which is made up of two components:

• A flat amount of $13,464
• An additional $4,736, which is apportioned based on how many months you were in Australia during the income year, including your arrival month.

What About Overseas Income Earned Before Arrival?

Chapman clarifies that income earned before a migrant arrives in Australia is not taxable and doesn’t need to be declared.
But what if migrants continue earning income from overseas after their move?
“Again, it depends on your visa type,” Chapman says. “Temporary residents don’t need to declare overseas income. Permanent residents do — but they might be eligible for a foreign tax offset if they’ve already paid tax on that income overseas.”
This foreign tax offset ensures migrants aren’t taxed twice, by reducing their Australian tax bill by the amount of tax they’ve already paid abroad.

Common Mistakes to Avoid

One of the most frequent errors new migrants make is not lodging a tax return, often because they’re unfamiliar with the system. This is especially true for those from countries like the UK, where most tax is withheld automatically and individuals rarely need to file.
“The whole lodgement process can be confusing,” Chapman acknowledges. “We recommend new migrants seek help from a tax agent like H&R Block, who can guide them through their obligations and entitlements.”

Are There Any Tax Breaks for New Migrants?

While Australia doesn’t offer any special tax offsets or concessions just for new arrivals, Chapman notes that the foreign tax offset is the most relevant benefit.
“It’s not really a concession,” he explains. “It simply avoids the double tax that would otherwise arise.”

Final Advice

If you’ve recently migrated to Australia, getting across your tax responsibilities early can save you stress — and possibly money — down the track. Understanding your visa status, what income to report, and when to file your return is essential. When in doubt, speak to a registered tax agent who can help you stay compliant and confident in your new financial life.