The ZAR:AUD exchange rate... moertoe! :(

[Nev]

To clarify after reading this

If you wait to try make the little bit back on the spike you might get klapped when it jumps through 9, i would bite the bullet and move the money

But again, you have to take all the advice and make up your own mind

[Riekie]

My advise has been and always will be: cutt your losses and get your money out. To sit and wait for the rand to "get better" is making you poorer by the minute. Take the hit now and be better off in the long run.

Every ZAR you make or save in RSA will be worth 10c in Australia. Every AUD you make or save in Australia will be worth $1+

Somehow people don't get it...

[Bronwyn&Co]

I agree wholeheartedly with you Nev. Thanks for the insight.

[dazzmatazz]

Here is also a little bit of an educated (from a labour perspective) guess. While Europe has a huge influence on the rand, the striking does too. Things will continue with the striking for a while but the closer to Christmas (bonus and leave time) it gets the more the strikes will filter off. most would have been over by then with unrealistic agreements entered into and signed. Also with exchange rates after a major spike (which we have seen) there is always a drop off or dip for a bit afterwards. Shore the trend can be for the money to go upwards in general (as we have seen with the R/$ for the last few years) but from one week to the next it will go down at some stage. Just look at any graph that tracks currencies and while the year trend will be for it to generally upwards you get little up and down spikes happening all the time. Key is to try and get a down spike when you do the actual transfer (from SA to OZ of course). I believe that nearer to Christmas time there will be a shortish dip, and here guessing completely we will see it sit round the 8.5 maybe 8.4 mark and then we'll see.

However a HUGE spanner in the works in the ANC elective conference happening from the 16th to 20th of December. That even could create a MAJOR Cr#p storm but it could also create some calm (a relative term). We will only be able to tell closer to the time.

If, but I doubt it, Mothlante is elected as the new president of the ANC (thus the country) and the decision is respected this will have a brief positive spin on things and may help matters. If Zuma, and that is how it looks like it will go, is elected the youth league will go ape (word used purposefully) and we could see major instability.

We arrive in February 2013 but have hardly any money that we are bringing as we have no saving and only some cars and other more minor assets to sell, so it does not matter to us too much. I am just so grateful that I have family who is willing to "sponsor" us (I.E. let us stay with them in their home) until we can find a job and get on our feet. Something that I know most people wont have the luxury of.

[LizM]

We arrive in February 2013 but have hardly any money that we are bringing as we have no saving and only some cars and other more minor assets to sell, so it does not matter to us too much. I am just so grateful that I have family who is willing to "sponsor" us (I.E. let us stay with them in their home) until we can find a job and get on our feet. Something that I know most people wont have the luxury of.

Also blessed to have my family and my parents home to stay in till we find our feet. Very grateful for that "buffer" when the time does come.

[Jacques Voogt]

Yes, It is very difficult.

We can not simply send everything we have over right now, as we still have living cost and have to pay for VISA and Container and Plane tickets.

Then we also have to use our house and car until we leave so it is not like we can sell it and move the money right now. That will have to wait for later and we will get less for it.

So in a way we are already burning dollars just by staying here until we can go. Does that make sense?

The funny thing is, or in our case not so funny:

If you paid off your South African 3 bedroom house of say current value around R1mil and you immigrate to Oz, you will have enough for a deposit when you buy a 3 bedroom house in Oz.

If you paid off your Oz 3 bedroom house of say current value around AUD500K and you immigrate to South Africa, you will have enough for buying 4 houses.

By simply renting them out, you will be able te earn a comparable income without having to work.

So it seams in Oz you will create wealth 4 times faster than in South Africa. So if it took you 10 years to to put together what you have now, you should be able to do the same in 2 and a half years in Oz.

I have heard people say that childcare is sooo expensive in Oz they will not be able to afford it, so one of them will have to stay at home and look after the kids.

Dude! That's a luxury in South Africa. In South Africa most have no choice but for both parents to work. You can not afford to have one of the parents stay at home, cause then you'll have to move to a smaller house, let the nanny go and perhaps the cleaner and gardener as well. You will also not be able to afford that new car every 3 years.

I would love to be forced to stay at home and look after the kids, cause it is cheaper.

[Gerhardk]

Jacques, keep in mind that generally things are a lot more expensive in Australia predominantly (I guess) since the minimum wage is around $12 per hour for an 18 year old - the person in Macdonalds behind the counter can earn $18 or more per hour! So if you earn R1m in SA in Australia a $120k salary ($120 x 9 = R980k) will most likely not get you so far.

Childcare is very expensive, around $80 per day per baby/toddler. Goverment subsides at least 50%. Good babysitter $25 per hour.

[elliemellie]

i thought a $120k per year was an above average income.

But i think i understand what you mean.

Clearly i need to re think my salary

[Nev]

Yep, 120k is high, reception type work is 35k a year middle management is 70k ish, 120 would be senior management and really specialized peeps

[Jacques Voogt]

Ok, so here is a question for the tax experts.

I have a house here in South Africa

When we leave I can either rent it out and have the poor South Africans that stay behind pay off the bond then sell it and move the capital.

Or sell it before we leave and move very little capital over.

Apart from the exchange rate that will eat up most of the capital the longer I wait. How will the tax work?

While we are in RSA we seem to be able to move capital over to Oz without much hindrance up to certain values.

But once we are in Oz and tax registered. If we move capital (that we have accumulated over years and has been taxed over and over already) to Oz,

will it be seen as capital movement or will it be seen as income from foreign investment and be taxed as income?

[Nev]

Something similar came up on these forums before,

As soon as you are considered a tax resident in a country you are subject to its tax laws, that means that once you have PR and are living here you are subject to Australian tax laws

Tax laws here are going to hit you for capitol gains tax as soon as you try to move the money, you will possibly also have fun on that side of the water when you sell it and try convince them that you shouldn't be paying tax there so that you don't get taxed twice..

I would get it sold now while it is still simple

[Jacques Voogt]

I would not incur any Capital gains tax in RSA as that only comes into effect if it is sold for more than R1mil more than I paid.

It's not even worth a mil.

But I agree, it will complicate things.

At the moment it is a form of investment.

So once there, If I bring it across, I think it may be considered investment income or taxed again in some way unless you declared it when you moved over.

I also spoke to a friend in Brissie who left in 2007 and recently sold his house in RSA.

He made a capital LOSS in AUD even though in ZAR it was a capital gain.

And with our government, chances of being told you are only allowed to own it if you live in it or have it simply taken from you are ever increasing.

So the safe option would be to sever all ties and take what you have and start your new life and work towards your future in a country where that is the norm.

Edited October 16, 2012 by Jacques Voogt

[Gerhardk]

A bit away from the topic but related I guess.

This is not advice, just my view. If you own primary residence in SA and permanently move to Australia and then sell somewhere in the future, you would most likely have lost your primary residence exclusion. The moment you arrive as PR in Australia you should value all your property since you should be subject to capital gains tax (loss) in Australia. CGT is 100% unless i.e. held by individual and more than 12 months then you get 50% discount. You will be taxed on all rental income in Australia (similar to losses).

Your gamble with not selling is that capital appreciation will be more than exchange rate depreciation. Also you have a liability of fixing things, getting tenant, tenant problems, dealing with council accounts etc etc. Remember 'Ver van jou goed naby jou skade'.

My wife suggested before we left that we should close as many things as possible, I did not listen and I am feeling the effect!

[Gerhardk]

In relation to the $120k example, my aim is to make you aware that with R1m salary you can live like a king in SA and can afford almost everything (even international holiday). The same salary converted to AUD $120k, will not give you the same level of comfort, not even close. By way of example, the max tax rate in SA starts around R500k in Australia it starts around $160k. More or less, been a while since I looked.

[Toitjie]

Im a little confused...will a salary of $120 not give you that level of comfort? I thought that salary is only for very senior executives. the posts I look at generally is between $ 50 and $ 70...or am I missing something?

[SA Aussie]

Trust me 120k is average - middle management is 200+

[Bronwyn&Co]

Trust me 120k is average - middle management is 200+

It really depends what state you are in, and what line of business it's too much of a generalisation.

If you are a manager at BHP Billiton you may earn $120k+ but if you are a manager at a shoe shop you will probably earn $55k

[Nev]

wow, I need to work where you do, if you look on seek.com.au (Biggest job site in Auz) middle management doesn't even get close to 120K

Updated October so it is current

http://www.payscale.com/research/AU/Country=Australia/Salary

General / Operations Manager - 89k

Operations Manager - 78k

Retail Store Manager - 44k

Executive Assistant - 61k

If you are earning 200k you are earning a hellofa lot

[Gerhardk]

No a family income or salary of $120k will not give you the same level of comfort as in SA. Not close. As far as I am aware the average income is $80k so combined income of $160k. This is also where most of the centrelink benefits end. The less the family income the higher the benefit such as rent assist, daycare, family assist.

Will a family in SA on $120k receive any benefits and not even be close to the max tax rate? No.

Also keep in mind that workers at mining sites earn a lot more. Apparantly technician can make $200k easily. Truck driver $150k etc.

Edited October 18, 2012 by Gerhardk

[Bronwyn&Co]

Let's say you are earning $120k and have 3 kids and are paying off a house and living in Sydney. You are going to struggle like hell and your kids are definitely going to Government schools because 3 x $12,000 a year for school fees is too much. This is after you've saved your 20% house deposit plus fees. There will be no overseas holidays.

If you are earning $120k and renting a townhouse for $350 a week in a small town or average area, and have no kids or one small child, you can probably afford an overseas holiday.

It's all about circumstances and budget. Are you driving a $6,000 Ford Falcon that you bought cash, or paying off a Prado? ;)

Edited October 18, 2012 by Bronwyn&Co

[SA Aussie]

I am talking about projects in mining and resources , but Perth based and not FIFO.

[Nev]

I think to answer the previous question, as a couple both working you should be earning combined about 120-160k in specific instances like spending months away from home living on a mine you can earn good money but at the expense of your family

That kind of work is not for me no matter how well it pays

Be careful of using the same mindset as South Africa to apply to schools here in Auz, In this country private school are not the norm with public school being for the poor people and offering a sub standard education like in SA

Public schools offer a good education, if you can afford private and are willing to drop that kind of money on it then great, but schools will not get your kid a job, as has been mentioned before it is more about after school and your attitude than pieces of paper

[Bronwyn&Co]

I think to answer the previous question, as a couple both working you should be earning combined about 120-160k in specific instances like spending months away from home living on a mine you can earn good money but at the expense of your family

That kind of work is not for me no matter how well it pays

Be careful of using the same mindset as South Africa to apply to schools here in Auz, In this country private school are not the norm with public school being for the poor people and offering a sub standard education like in SA

Public schools offer a good education, if you can afford private and are willing to drop that kind of money on it then great, but schools will not get your kid a job, as has been mentioned before it is more about after school and your attitude than pieces of paper

Nev I agree about schools. I was just mentioning the fees because if you go private it would be a huge % of earnings. So probably not something you want to spend a third of your earnings on. Just to add to my point that it's all about choices, and every family will make these kind of choices

[Nev]

Yea, i hear you (And i didn't have any issue with your post it just made me dust off the old soap box and hop on for a speech ), but there are still lotsa peeps who think that they are doing there kids and injustice by not going private and that is just not the case, i was just trying to help out with the little bit of panic i could hear creeping in to a few of the posts earlier

If you are looking at a job offering 70k and it seems that you will need 200k just to survive it would panic me a bit too

My wife and i live very well with annual costs of just under $50k the rest is spending money, if anyone wants to know how that is broken down send me a private message

[Fish]

..

Childcare is very expensive, around $80 per day per baby/toddler. Goverment subsides at least 50%. Good babysitter $25 per hour.

Median family income across Australia for families with children is $120,000. Childcare costs $200 per week in Brisbane before the childcare benefit payment (if eligible).

So full time childcare for one child costs 8% of the the median gross weekly income of $2310 to give everyone a comparison point.

I agree with Bronwyn...circumstances differ wildly. The Australia wide median might be $120,000 but in cities it can be much higher and regional centres or battler suburbs, much lower. In my area for example the median family income for families with children is $167,000 so childcare drops to 6% of gross income as I live in Brisbane but in a regional town income would be much lower (unless a mining town). Obviously childcare benefit then starts to kick-in and subsidise families with lower income a bit. So it all depends. Obviously these figures are all medians so some will fall below and some above.

Edited December 1, 2012 by Fish