Cost of Living in HK vs AUS

[Night Flight]

Hi All,

Would love to get some advise from anyone in Hong Kong, on how much extra I should expect to get paid to cover increased cost of living (accommodation, food etc) compared to my current salary in AUS which lets say is around AUD$100k p.a. to maintain a somewhat similar lifestyle.

Looking at a job based in HK but just want to make sure that I don't end up short.

And please be realistic, we would all love to get $1m p.a. but they will just laugh at me at the salary negotiations.

Also from my research I would expect to pay about HKD$40k per month to live in a 3 bedroom apartment on Lantau Island is that about right?

Thanks in advance,

NF

[Cedar Tree]

Look up Hong Kong property & real estate - find Hong Kong apartments, flats, accommodation- Square-Foot (http://www.squarefoot.com.hk/) for leasing & ownership costs, HK is E for Expensive!!

If you are not offered a housing package, IN WRITING, then take a pass on this gig. You could do better as DEFO in Aus. Jump the gun and you'll regret forever, as future hired pilots will get housing, but you'll be exempt.

As for other costs in HK, double to quadruple normal costs... Except public transit and taxi's. Those two are cheaper here, everything else, like food will set you back beyond the normal anywhere.

I think this question is coming from someone a,ready knowing the answer... Hmmm.

[Mouwaa]

I know you were joking....but to be serious, with the cost of housing (and let's face it, a reasonable supply of steak) plus your salary, you will need around $1,000,000HKD per annum to be comparable. Your rent (if you have a family, will be in the order of 50-60K per month alone.)

Unfortunately I am not kidding.

[Toruk Macto]

If you got plenty of savings or your wife can work you should be ok

[rick.shaw]

Do you have kids at all? That is a huge factor. As a single person, you CAN live cheap here. Lifestyle wouldn't be that great, but it could be done.

Think to the future too. If you plan on getting married and having kids, then you really need factor that in now.

[Capt Toss Parker]

Used cars are very cheap especially (automatic 911 turbos) like my lady slayer, man does this thing do the work for me :ok:

Insurance for cars is cheaper but petrol is more expensive, petrol works out at $2 AUD a liter.

Parking is very cheap compared to the extortion rackets in Australia, you can park at most major centers for $20-$25 HKD an hour so $3.5AUD roughly .... try and park for those prices in Sydney or Melbourne. If you spend $300hkd or more you usually get a few hours free parking.

Food is generally more expensive but imported beer is half the price of Australia ..... raising your kids on beer could be an option?

Cowboy boots in Kowloon are well made and look the part , brill cream to get that "Soul Glow" shine on your man rug or 80's tache is quite reasonable.

Internet dating is usually expensive & unsuccessful ..... that's my experience anyway.

[&&&]

Rent for a crappy appartment that you would NEVER live in, couldn't imagine people would live in and you patner would HATE, will cost you about $50k to $80K. Our living expenses (family with kids)for food and sundries is about $30k a month. This does not include schooling at the Australian school, which is $9300/month/child before assistance from your company. (if you get it from a certain company it will cover about $5000 of it, before extras).

Telecommunications cheap. Western food expensive. Compnay ignoring your contract (common) expensive. Divorce, when you wife hates you for coming here, expensive.

It's not worth it if you earm less than $150k/month, even then it's not attractive financially.
Stay at home.

[broadband circuit]

Looking at a job based in HK but just want to make sure that I don't end up short

Is this a flying job? if so, what airline? (you might get better information by being more specific)

Maybe ATC?

If you're not a pilot/controller, please note that this is an aviation forum.

[hongkongfooey]

Not much to add to the above.
Littlle things like Gym membership ( you will want your lungs in tip top shape to live in HK ) 4-5 times Oz prices.

Public health system rubbish for expats ( although child birth surprisingly good ), make sure you get good medical cover included.

If you continue to eat like an Aussie, as most of us do, it will cost.
On the plus side drinking is cheap :ok:

Buying property here has just become more difficult, a modest apartment will set you back 6-7 mil and you will need at least 10% deposit plus stamp duty etc.

Cars are cheap but petrol and tolls are not, also insurance gets much worse with V8s and older cars. Parking might be cheap, if you can find any, don't expect to do a few laps around the block and find a spot, no such thing.

Utilities are surprisingly cheap, which is good as you will have A/Cs running 24/7 for at least 1/2 the year ( oh and air purifiers too )

TVs, etc dearer here but not significantly, makes sense as Japan and Korea so far away ??????

If you include accomodation costs, I would say you will want double what you earn in Oz

[Night Flight]

Thanks everyone for your replys and PM's much appreciated. It is a big decision and we will not be taking it lightly. We have done a lot of reseach and spoken to a lot of people but any extra ideas/points of view are useful.

To Answer a few of the questions:
I have a wife and 2 kids (both under 3)
Yes I am a pilot
Job is a corporate gig for a private company (not it is not a MetroJet but dont have much other info)
Most conditions will be negotiable.

One other question to add to the above is how does the new Australian Tax on expats affect things? Do I need to break all ties with Oz and tell them I'm never coming back again? We have several properties in Oz which we dont want to sell if we dont have to.
Perhaps someone could recommend a good accountant on the East Coast who has good knowledge on Expat issues?

Thanks again,

NF

[HEALY]

Night Flight

You dont have to cut ties with Australia all together at all. Being a non resident for immigration purposes and non resident for tax purposes are 2 seperate things. You will always remain a resident of Australia hence when you travel to HK you dont put 'leaving permanately' on the card.
Having the family in HK, earning HK dollars for a HK company (im assuming???) means you are a non resident for tax purposes in Aust hence when you do an aussie tax return (which you can still do every year our of routine) you just tick the non resident box and be done with it.
Having properties in Australia is not an issue at all however if they are positively geared you will still be up for capital gains tax, however the tax rate is different for non residents (this im not positive on!!!). The ideal people to talk to are a company called smats in HK who can assist you with the ideal way to set up the finances and open up a world of negative gearing and tax credits which will benefit you when you return to Oz.
Dont take this for gospel and get some good advice though.:ok:

[hongkongfooey]

NF, I am pretty sure the tax on positive geared is the top rate ( 46c ? ) for non-residents, but you can continue to negatively gear ( for now ) which is nice, provided you put in an Oz tax return each year.

Since you have young children, if you have'nt already, google pollution in HK, Greenpeace, Clear the Air, clean air network are also good.
I am sure plenty will disagree with this but HK is NOT good for you or your families health ! Around 1500/year die from pollution related disease and don't belive the bull5hit about life expectancy here, the pollution has only been really bad in the last decade or so, and life expectancy won't drop for some years to come, but in the mean time people are still getting sick to varying degrees.

If you still decide to come, and stay a while, your kids will need education. As an idea, finger painting for 3 hours a day in Discovery Bay costs about 5000HKD per child ( from memory ), to my knowledge there are no public schools for gweilos in HK, education is expensive and most corp gigs don't pay for this.

PM me if you wish

[broadband circuit]

Sorry Night Flight for thinking you were not a pilot, but we do get lots of them on PPrune.

Everything said so far is pretty much on the mark. Personally, other than the pollution, I think HK is a great place for kids, but it is expensive.

Make sure you either get an education allowance, or a salary to cover the costs. Depending on the school and the age of the child, you're looking at anything from HK$5500 - HK$8000 per month. Some of the specialist international schools may well be more. Plus, as they get older, the fees go up & up & up. Add to that the transport costs, such as school bus (approx HK$1500 per term, 3 terms in the school year), or ferry if you live in outer islands (DB child fare HK$31 return doesn't sound much, but that's over HK$600 a month). School excursions/camp are not like Aus either, where they jump in a bus & travel for a few hours. Many trips involve airfares, some examples from friends & myself include New York, Mainland China, Thailand, Nepal, Europe.... I'm sure you get the idea.

Your prospective employer will be aware of all these things, but they'll hope that you aren't. Forewarned is forearmed.

Good luck.

[F Scaler]

You mentioned you are in for corporate. It's not like the usual 'you get what you're given' at a legacy. 2 questions. Are you desperate for this HK gig? Are you inexperienced in corporate? If you answered no and no, I suggest you use a contract lawyer who knows the market, once you see what the company offers, then counter offer. Not too many use this approach, but can and has worked in the past.

[Numero Crunchero]

Some misinformation has been posted here in earlier posts.

For tax purposes you can be deemed to be a dual resident. That would mean you would pay tax in Oz on world wide earnings. To avoid that, move family to HK, close every bank account you don't need, end gym memberships, sell cars, rent out or sell your house. Show that you have the intent of a 'permanent' move to HK. The ATO fully accept that 'permanent' is not forever - they grey area is around 2 years. Once you exceed that you are probably safe being a non resident of Australia for tax purposes. You won't have to pay tax in OZ on your HK income for those two years - just if you go back within those two years they may deem you to be a resident for that 2 years.

Now onto tax for Aussie items. If it is a taxable Australian asset then you pay Capital Gains tax on its sale. Shares (less than 10% of any company) are CGT free if you sell them as non resident. However, if you own shares as you leave Australia you have two options - keep them and then pay CGT if/when you sell them or you can 'deem' to have sold them on the day of departure. So if your share prices are less than what you paid, the latter option would suit you better as then any subsequent gain would be tax free.

Dividends from shares have withholding tax of 30% - but I believe that is dropping over the next 2-3 years. Just make sure that you give a HK address and no tax need be paid on fully franked dividends but unfranked dividends will have withholding tax(30% or the new lower figure) taken out.

Interest on cash/term deposits have 10% withholding tax taken out. So if you get say 6% then you will end up with 5.4%. You will also note that the figures quoted for AUD term deposits in HK are lower by this amount as obviously they withholding tax has been factored into the quoted rate.

If you have positively geared property you will have non-resident rates paid - you can easily find them on the ATO site. But basically there is no tax free threshold and if memory serves you pay 30% until the level where it kicks up to 40% for resident tax payers. So it isn't much worse than being a resident.

If you can negative gear that is better as you can accumulate losses indefinitely and then in your first year or two back in Oz you won't pay any tax as your income will be offset against your losses.

You will hear erroneous information from many pilots about the 183 day rule. This rule is a secondary test, not primary. You can be deemed resident even if you don't set foot in Australia for a year or more. You can read lots of case histories on the ATO site to get a feel for how varied and inconsistent the rulings are on Residency.

If you have any specific questions feel free to PM me.

[404 Titan]

Numero Crunchero

You have been doing your home work I see. :ok:;)

[Teal]

If you have positively geared property you will have non-resident rates paid - you can easily find them on the ATO site. But basically there is no tax free threshold and if memory serves you pay 30% until the level where it kicks up to 40% for resident tax payers. So it isn't much worse than being a resident.

If you can negative gear that is better as you can accumulate losses indefinitely and then in your first year or two back in Oz you won't pay any tax as your income will be offset against your losses. Just to tidy up the loose ends:

Non-resident rates are 29% up to $37k taxable income, then 30%, 37% and 45% as your taxable income steps up to $80k, $180k, and over $180k. No tax-free threshold or other tax-offsets (rebates) available, and the Medicare Levy (1.5%) or Medicare Levy Surcharge is not payable.

If your properties are positively geared prior to departure, the ATO will not accept any sort of re-financing or other trickery to make them negatively geared. You may however be able to pre-pay 12 months interest in advance to force the issue provided the lender gives you a discount on the rates/fees in return. Simply pre-paying for a tax benefit only is not acceptable to the ATO - there needs to be a commercial/non-tax justification behind it.

Re Capital Gains Tax on property - if you rent out your own personal property (main residence) whilst working in HK, it will be exempt from CGT for a period of absence of up to six years. If you don't rent it out, then the exemption is indefinite.

As always, seek your own professional advice.

[Lowkoon]

Kids.... They will both be starting Kindi soon. Expect to pay between $2000 and $4000 a month each, and if you want them to go to school, bring along about $100,000 to get them on a waiting list. Some schools this figure is refundable, others it isnt, unless of course they are fluent in Canto, then you can send them local. (Yes, some tight ass A scaler is going to tell us how they sent their kid to local school, and the psychological scars are so small you hardly notice, but they saved a fortune!) Your kids are going to want to go to western schools with their friends usually.

Medical. if it isnt included, expect decent cover to cost you about $50,000 pa, check with a company called kwiksure for confirmation of this. Otherwise that same A scaler will tell you how fantastic the local system is, he had his 3 kids there, and it cost him $100hkd. Let your wife decide.

So, $100,000+ per kid, just to get them on the list, no gaurantee of a spot, International School Debentures (http://www.mformembership.com/Debenture.aspx) and $50,000 for medical, and on your $40,000 flat, don't forget your 2 months deposit. Don't budget on 15% tax for the first year, they will expect you to fork out 2 years worth first time up.

Want some frozen mince to make spagetti bog? Try $100hkd per kg for starters. Frozen Meat South Stream Seafoods (http://www.south-stream-seafoods.com/c/FROZMEAT/Frozen+Meat.html) Yep, beer is cheap at the 7/11. Ever been for a big night out at a 7/11?

So if you have half a mil in cash, then you may be able to afford to take the job! :ok: Good luck!

[hongkongfooey]

and on your $40,000 flat, don't forget your 2 months deposit

Aaah, yeh, the 40K/month 1100sqft flat will cost you just shy of 130K to move into ( 2 months bond, 1 month in advance and agents fee ), you have a better than even chance of having to fight for that money when you move, regardless of how well you looked after it :hmm:

But, the beer is cheap ...................

[zhishengji751]

If you have kids.. seriously think about the air quality/pollution of living in HK and also how big an apartment you will have so they can have room to run around. If you can get it in the contract, be a member of a club with a kids area, that would make life much more enjoyable :)

btw.. this is the govt pollution page..
Environmental Protection Department (http://www.epd-asg.gov.hk/eindex.php)
There was a period when it even went off the chart. :\

You won't be living 'green' in HK, with aircon/dehumidifiers running.. so be happy using electricity.

As has been said.. red meat is expensive, and good red meat even more so. If you don't trust food out of China, you options are reduced, but you will find supermarkets well stocked (even if items are expensive).
Eating out can be cheaper than in Aus if you like the local food :ok:

The expat community can be a real help, and there is a ozhongkong group.

It can be a great adventure, but make sure you like living with lots of people in close proximity.

Visiting Lantau.. I'd always take insect repellent. For some reason, flyscreens aren't very common in HK. I guess its the outward opening windows.. but still, it has been solved elsewhere :)

Have you been over there with the family? You can get one of the real estate agents to show you around the area you are interested in to see what the market is. They will expect you to sign an 'exclusivity' agreement for the apts they show you however.

I presume you are already renting out some properties in Aus.. so you have a suitable property manager.. this can also make your life easier.

The immunization schedules are pretty close, but in HK for newborn they give a TB shot.. I'm not sure what they recommend in your case. China has a high incidence of TB, and the HK harbour waters would be best avoided.. but the ocean side beaches have swimmers :)
File:Mapa tuberculose.png - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/File:Mapa_tuberculose.png)

It can be exciting when it's not recommended to go outside due to rain (or typhoons) Ferries will be stopped in this case so you may not get on/off Lantau.

Surprisingly lots of greenery and walking trails outside of the populated area on the mainland and islands.

[hongkongfooey]

seriously think about the air quality/pollution of living in HK

True, but you can use the cheap beer to flush your system, this may be a problem with the kids however :rolleyes: