The Financial Implications of Dual Citizenship in Australia

The Financial Implications of Dual Citizenship in Australia?

Vibrant landscape, gorgeous climate, and a thriving economy; it’s no wonder so many people want to make Australia their home. And gaining Australian citizenship is one of the best ways to enjoy the many benefits that the land Down Under has to offer.

Being a dual citizen can be incredibly appealing, especially for expats. However, it’s also important to weigh all the important factors — such as the financial implications of being a citizen of two countries.

In this article, we take a closer look at the financial impact of holding dual citizenship in Australia.

The Much-Coveted Australian Citizenship

Suppose you want to be an Australian citizen but don’t want to give up your native nationality or are currently an Australian citizen but also want to be a citizen of another country. In that case, the answer is to secure dual citizenship.

Being a citizen of two countries offers countless advantages. If, for example, you are an American who wants to be an Australian citizen, you benefit from the social services of both countries, exercise your right to vote in the US and Australia, and even access low-cost education and medical care.

However, dual citizenship is only attainable if both countries, meaning Australia and your native country, allow dual citizenship. Before 2002, dual citizenship was not an option in Australia, but today, you can enjoy dual (and even more) citizenship in this country as long as you are eligible and have met all the requirements.

You can apply for Australian citizenship if you are already an Australian permanent resident. Or you can also be eligible if at least one of your parents was an Australian citizen during your birth.

Whether you’re applying for dual citizenship through descent or permanent residence, you still need to fulfil the following conditions:

  • Pass the residency test to indicate that you have been in the country for the last four years, including the previous year, but already as a permanent resident.
  • Good moral character
  • Proficiency in the English language
  • Acceptance and understanding of the code involved in attaining an Australian citizenship

Australia’s Department of Home Affairs manages application forms and provides further guidance to those applying for Australian citizenship.

The Financial Implications of Being a Dual Citizen in Australia

When applying to be a dual citizen in Australia, it is important to understand the positive and negative financial ramifications.

Here are three major financial implications of having dual citizenship in Australia:

#1. Double Taxation

Being a citizen of two countries means you must also abide by the tax obligations of both countries.

For example, as an American citizen applying for Australian citizenship, you will still be legally mandated to file and duly pay your income tax twice, regardless of which country you decide to live in.

It’s also worth noting, especially for US citizens, that the US and Eritrea are the only countries that tax their citizens globally, irrespective of where they reside. Despite having tax treaties in place to reduce double taxation, including in Australia, the Internal Revenue Service (IRS) still requires you to file your tax returns in the US yearly.

So, make sure you assess the income tax you have to pay in both your native country and in Australia, so you can determine whether you can fulfil your obligations to both countries.

This is a long-term and even a life-long implication as long as you hold two citizenships or unless there are changes in the tax laws of either your home country or Australia in the near future.

If you’re considering leveraging your dual citizenship for business opportunities, you might want to look into the different Australian Business Visas available.

#2. The Cost of the Process

When you’re applying for dual citizenship, you also have to pay the fees involved in the process.

For instance, if you are an Australian applying for American citizenship, you must prepare at least $3,000 to process everything. And despite having this amount, there is no guarantee that your application will be approved.

It’s the same for other nationalities applying for Australian citizenship. The government-mandated application fee can cost AUD 300 to AUD 490 (~$200 to $327) depending on the applicant’s age, and just like all applications, you have to take your chance with the process.

And before you can even apply for Australian citizenship, you first have to become a permanent resident of the country. This process alone involves expenses ranging from AUD 2,900 to AUD 23,000 (~$2,000 to ~$16,000).

Aside from the actual cost of processing, there may also be instances where you may require legal assistance, which can further shoot up the expenses.

For example, getting help from the Migration Agent Registration Authority agent can cost around AUD 224 to AUD 8,000 (~$150 to $6,000). The services of an immigration lawyer are also not cheap, and some documents required for the application would also entail upfront payments.

#3. Better Healthcare Options

A major financial advantage of being a dual citizen in Australia is that you benefit from two countries’ healthcare services. Once you are a citizen or permanent resident, you are already eligible for Medicare, which is Australia’s public healthcare system.

With this healthcare insurance, you can receive free treatment from government-funded and supported healthcare institutions or at a much lower cost. One of the Australian government’s goals is also to ensure that all citizens and residents can purchase prescribed medicines at a subsidized price.

So, if you are not an Australian citizen and need to consult a medical specialist, you would pay AUD 50 compared to not having to pay anything out of pocket if you are a citizen.

If your home country has its healthcare system, you can determine which one suits your medical needs better.

Final Thoughts

Being a dual citizen in Australia certainly has its perks. It’s also a smart and practical idea for those planning on living in Australia for an extended period or wanting to study or work in another country without losing their Australian citizenship.

You should assess and identify whether you can support the long-term responsibilities of holding two passports. Consider whether you are financially capable of fulfilling your obligations to two countries. Additionally, you must think long-term if the costs of being a dual citizen in Australia are worth it or if letting go of one country is a more feasible option.