Australian tax residency for individuals

Australian tax residency for individuals

Australian tax residency depends on the statutory tests and the person's circumstances. Citizenship, a visa, an overseas job or a departure date does not settle the question alone. This guide covers individuals, with sources checked on 8 September 2026. Company and trust residency require separate analysis.

Apply the four tests

A person is an Australian resident under domestic tax law if any applicable test is met. Consider all four before concluding that the person is a foreign resident.

The four tests (TR 2023/1, paragraph 11)

Test	What to establish
Resides test	Whether the person resides in Australia according to ordinary concepts, considering their presence, purpose, behaviour, family, work, assets and living arrangements together
Domicile test	Whether the person's domicile is Australian and, if so, whether the Commissioner is satisfied that their permanent place of abode is outside Australia
183-day test	Presence in Australia for more than half the income year, unless the Commissioner is satisfied both that the person's usual place of abode is outside Australia and that they do not intend to take up residence here
Commonwealth superannuation test	Membership or eligibility under the specified Commonwealth schemes, including the statutory spouse and child-under-16 extensions

• Source of tests — These tests come from the definition in subsection 6(1) of the Income Tax Assessment Act 1936, reproduced in TR 2023/1, paragraph 11. (TR 2023/1, paragraph 11)
• Superannuation test scope — The superannuation test concerns the specified PSS and CSS arrangements. Membership of any Australian super fund, or employment by government alone, is insufficient. PSSap is not PSS for this purpose. (TR 2023/1, paragraphs 96–97 and footnotes)

Build a dated residency record

• Record travel and circumstances — Record travel dates and time in Australia for each income year. Then document homes available in each country, family arrangements, employment terms, visas, belongings, social commitments and contemporaneous intentions. Explain any difference between stated intentions and actual conduct.
• Permanent place of abode / domicile — For the domicile test, a permanent place of abode can extend to a town or country. It does not require ownership of a particular dwelling or a promise never to return to Australia. Domicile is a legal concept, distinct from tax residency, nationality and a mailing address.
• Arrival or departure during a year — For an arrival or departure during a year, identify when the facts changed. A person can remain resident after physically departing or become resident after initially arriving as a visitor. Retaining an Australian bank account or home is a fact to weigh, not an automatic answer. TR 2023/1 replaced the withdrawn TR 98/17 and IT 2650. (ATO: TR 2023/1)

Deal with dual residence and temporary residence

• Dual residence and treaties — If domestic law treats the person as resident in two countries, examine the applicable treaty's residence article and its effect on the relevant income. Read the actual treaty and any modifying provisions. Do not copy a generic tie-breaker sequence into a conclusion without checking it. Domestic residence and treaty residence are separate findings.
• Temporary resident concessions — Temporary resident tax concessions also require a separate assessment. An Australian tax resident may qualify for temporary resident concessions; holding a temporary visa does not by itself answer all the tax conditions. Record this status before calculating foreign income or capital gains. (ATO: foreign residents and CGT)

Calculate the consequences separately

• Part-year threshold and income classification — Use the applicable part-year tax-free threshold and Medicare rules. Classify each receipt by source, timing, exemption and treaty treatment. Avoid a blanket statement that all Australian-source income is assessed at marginal rates: some investment income has final withholding treatment. (ATO: part-year tax-free threshold, ATO: resident tax rates)
• CGT event I1 on cessation of residency — CGT event I1 happens when residency ceases. Its asset exclusions are specific. Section 104-160 excludes Australian real property, relevant permanent establishment assets and options or rights over those assets; it does not exclude every asset described as taxable Australian property. Indirect Australian real property interests need separate treatment. For assets within I1, compare cessation-date market value with cost base or reduced cost base, subject to applicable exemptions. (ITAA 1997, section 104-160)
• Choice to disregard gains and losses — An individual can choose to disregard all gains and losses covered by I1. The choice applies to all affected assets, rather than selected winners or losers. Those assets are then treated as taxable Australian property until the earlier of a qualifying ownership-ending CGT event or resumption of Australian residence. (ITAA 1997, section 104-165)

Keep the residency conclusion, evidence, unresolved facts, applicable treaty and CGT calculations together. Reassess the conclusion when the person's living arrangements change.

Contributed by Ryan Duguid.