Stretch my Dollar? - Where to go...

[silos21]

I am a Australian citizen and I've got two investment properties in Australia which give me a humble income. I was thinking of moving overseas to make this income more effective in improving my quality of life compared to what I can do for myself here. Initially I was looking at Italy because I understand the language, but its taxes proved to be too suffocating from what I understood, especially the wealth tax on international properties which is %1.06 on the property market value...this alone would eat up a significant chunk of my passive income that I get from the properties. And the tax on the income on top of that or the tax on the money I would have in my bank account...all this felt like too much.

Right now looking at France, as from what I understood I wouldn't be affected by their property wealth tax because all my property assets are worth less that 1.3m euros. I am still in the process of finding out about France, but, I wanted to know what other options there are or what else could be done. I am leaning towards Europe and the Europe-esque places, nordic maybe, slavic, baltic etc. Asias and Americas don't really appeal to me. In either case this move is being made in consideration of being permanent. I would want to 'grow roots' in the new place, buy a house for myself, start a business maybe. Looking for any and all advice regarding countries where I could make the most out of my income.

I know that with assets like properties its a lot more problematic when living overseas, it would be a lot simpler to have shares, but brick and mortar is more appealing to me. And on the off chance that I need to come back to Australia I will have a place to stay...But if I love it too much in the new country its not out of the question that I may sell the aus properties and turn them into some other kind of investment or to buy properties in the new country.

[Freedomin5]

People seem to quite like Spain. I'm not familiar with the details, but I've heard Spain mentioned as a FIRE destination multiple times on the forums.

[Green_Tea]

Oh, exciting! 🤩

Some ideas going somewhat from the south to the north.
Southern Europe: For climate change reasons I would exclude the most southern parts of Europe: the south of France and Italy and basically all of Spain, I believe. Probably also Portugal. Heat waves of 40 degrees and lack of water are already standard, these countries are not used to it as Australia might be, and it's only going to get worse, the land is drying out and fires are getting more common.
Know that some climate is regional, e.g. Lyon in France gets quite hot in summer, but go a bit further in any direction and you're ok. Go up into the mountains and it gets colder anywhere.
Being Australian, YMMV on climate perception...
Personally I love Croatia and the Balcan but I'm not knowledgeable about finances there.
Romania might be interesting, beautiful country and great people, maybe similar dynamics in the neighbouring countries.
Germany should be good tax and health ensurance wise, people might seem generally less approachable than in southern Europe but are good, think English personality wise, language is in the same group as English, so is Dutch.
Switzerland is beautiful with a truly outstanding infrastructure (and has three distinct language regions, German, French and Italian) but with Luxembourg and Lichtenstein the most expensive European countries to live in.
Anywhere north of the northern German border expect long, dark and wet winters, already somewhat the case at the hight of the middle of Germany.

I would consider financial aspects but look further to find a spot where you will be happy. Give us some pointers about what you appreciate and value (urban/rural, hobbies, necessary infrastructure for your business, travelling plans, personalities you prefer...) and maybe what your budget will be... Which regions in Europe have you already visited and what were your impressions?

I'm curious to read more about your journey!

[Green_Tea]

The corridor I'd be inclined to explore 😊

[Laura33]

Portugal is lovely and has been much cheaper than France/Germany/etc.  Porto or north.

Coming from Australia, do you need visas for long-term stays?  What's the path to residency, work permits, etc.?  I'd look very closely at those things, too.

[ChpBstrd]

So the goal is to retire earlier than otherwise possible through geolocation?

I would think very hard about the time commitment involved with moving, becoming fluent in a new language and culture, rebuilding a friend base, getting housing and insurance set up, etc. If you stayed in Australia and applied all that time toward income-producing activities, would you still need to stretch your dollars to retire? Are there places in Australia that are cheaper than where you live, where you could obtain some of the benefit of an intercontinental move?

Second, I would be wary of trying to earn rental income from properties on the opposite side of planet earth. Yes you can hire a property management company, but these companies might also let your properties become derelict, get you in trouble with local regulators, create liabilities for you, or even defraud you of rent. If it costs maybe three thousand dollars to make each visit, how often are you going to visit? Never if you're stretching your dollars! So although some people make it work, this is a risky business involving a high degree of trust in someone else.

Maybe look at the income you could earn from the proceeds if you sold the properties and invested in paper assets. That's a more reasonable income budget as an expat. I honestly don't know if this would be higher or lower than the cash flows from your properties, because properties are outrageously expensive right now and interest rates are relatively high.

Step one is making it work on paper. Step two is visiting one or two target locales for a week or two.

[daverobev]

With rental income France is pretty good, but bear in mind if you're not drawing a pension or otherwise paying in to the healthcare system they'll get you for 6-ish% on eligible income, it's called PUMA https://www.urssaf.fr/portail/home/espaces-dedies/beneficiaire-de-la-puma.html

I say pretty good because dividends and cap gains are 'social charged' 17.2% from the first Euro (you get a ~11k EUR tax allowance before paying actual tax), but foreign property income does not incur this.

Don't know how Aus will tax property income for non residents.

AFAIK Spain tax is worse, but I was having a chat/debate with a French person living in Spain on Reddit who was telling me it is worse in France... not comparing apples to apples I think.

You have to take the whole picture into account of course. If you're taxed 20% more but cost of living is 20% lower it's a wash, right?

If you're handy France can be cheap. Cheap properties, cheap property tax, but labour is expensive and/or hard to get. Climate's good for growing food, you can get the weather you like, you've got beaches, skiing, the works.

[Green_Tea]

Agree with @ChpBstrd that the will to save money alone would be a weak reason to move.

[Kwill]

Second, I would be wary of trying to earn rental income from properties on the opposite side of planet earth. Yes you can hire a property management company, but these companies might also let your properties become derelict, get you in trouble with local regulators, create liabilities for you, or even defraud you of rent. If it costs maybe three thousand dollars to make each visit, how often are you going to visit? Never if you're stretching your dollars! So although some people make it work, this is a risky business involving a high degree of trust in someone else.

I experienced this as a renter when I rented out a house with some friends near Boston. The landlord was in Greece, and the house was where he and his family had lived some years past. It was probably very nice when they lived there, but another group of renters had been there for about 8 years before we moved in. The landlord had a friend watching out for the place, but there hadn't been much maintenance. There was mold in the basement and some broken glass in one window, and there were initially some gas leaks because the landlord's friend had done the plumbing instead of a proper plumber. The garden was overgrown. Over the years our group of friends lived there, it got progressively worse. Roommates swapped out now and then to keep the place filled, and I think it's still going with at least one person I still know. After the landlord's death, his wife apparently came and had some work done on the house, but that was after my time. Anyway, it probably would have been better to sell the house when the family left the US and get the income from investments. After more than a decade of renters, it seems like it would need lots of work to be ready to sell.