Retiring overseas when you own your home: keep it, rent it or sell it

The order of decisions for you

If you own your home, it’s usually the biggest decision in the plan and the hardest one to undo. Both the pension rules and the tax rules turn on timing, so take the steps in this order.

1. Decide what kind of time away you mean. On a trip, your home stays exempt for 12 months. If you move overseas, your homeowner status for the pension changes from the day you leave. Our guide to whether the house counts while you are away explains both.
2. Know the house rules before anyone decides. A winter away or a long stay leaves everything as it is. Selling is hard to undo, and so is a long lease. Our guide to keeping, renting or selling the family home sets out the rules. A registered tax agent and a licensed financial adviser can explain what applies to you.
3. If you’re thinking of renting it out, ask about both sets of rules. The rent counts as income for the Age Pension, and it’s taxable. Foreign residents get no tax-free threshold: see our guide to foreign resident tax rates.
4. If you’re thinking of selling, check your tax residency first. If you sell while you’re a foreign resident, you generally lose the main residence exemption from capital gains tax. Our guide to tax residency when you retire overseas explains the ATO’s tests.
5. Watch the 12-month mark. If a trial stretches past 12 months, your home becomes an assessable asset for the pension.
6. Think about coming home. If you keep the house, you have somewhere to come back to. If you don’t, you’d need to buy or rent again.
7. Shortlist places where a trial is easy to arrange. These suit homeowners testing the idea:
   • Penang: 90 days on arrival allows a long trial with the house left as it is.
   • Chiang Mai: about A$2,790 a month for a couple (our estimate), and Thailand’s retirement visa starts at 50.
   • The Algarve: Portugal’s immigration agency sets the money test at the Portuguese minimum wage, €920 a month in 2026 (about A$1,540 at the RBA’s 12-month average rate). Portugal also has a social security agreement with Australia.

A worked example

An example, not a real person.

Lyn and Geoff are 69 and 70. They own their home in Brisbane outright and get the maximum couple rate of the Age Pension. They’re thinking of a trial year in Penang, with the house rented out while they’re gone.

	Amount
Their Age Pension, couple maximum (A$1,866.00 a fortnight combined)	about A$4,040 a month
A month in Penang for a couple, rent included (our estimate)	about A$2,540 a month
Rent from their Brisbane home (a made-up figure for this example)	A$600 a week

Pension rate from Services Australia (20 September 2026). How we worked out our estimate: Numbeo’s living costs for one person (without rent), plus a one-bedroom city-centre rent, plus 30% for eating out, local trips and extras. For a couple we multiply living costs by 1.8. We converted at the Reserve Bank of Australia’s average exchange rate for the 12 months to September 2026 (A$1 = 2.80 ringgit, for example). Health insurance isn’t included. Numbeo’s Penang page was last updated 15 October 2026.

What changes for them:

• The rent counts as income for the Age Pension income test, after allowable deductions, so it could reduce their pension. By how much depends on their other income.
• Months 1 to 12: the house stays exempt from the assets test, because they’re away temporarily.
• After 12 months: if they stay on, the house becomes an assessable asset. With a Brisbane home, that could change their pension a great deal.
• Tax: the rent is taxable. If they became foreign residents, they’d have no tax-free threshold, and a later sale would generally lose the main residence exemption.
• The visa: Malaysia gives 90 days on arrival, so a full year means several trips out or a long-stay visa such as MM2H.

In the end they decided to start with a 12-week winter, and to talk to a registered tax agent and a licensed financial adviser before signing any lease.

What to ask a professional

• Registered tax agent: “If we rent out our home and live overseas for a year, would we be foreign residents for tax?” “What would happen to capital gains if we sold later?” “Does the 6-year rule apply to us?”
• Licensed financial adviser: “How would rent from our home change our Age Pension?” “What happens to our pension if we’re away more than 12 months?”
• Insurance broker: “Does our home insurance still cover the house while it’s rented out, or empty?”
• The country’s embassy or a licensed visa agent there: “Can rental income count towards the visa’s income test?”

Book a free planning session on Zoom. Once we know your situation, we can tell you which of these people to start with.