Let’s get straight to the point. You’re 60, retirement is on the cusp, and for the first time in – well -ever, you have the space, means and time to take a true sabbatical, a grown-up gap year. One year living overseas, trading supermarkets for souks, routine for ribollita, and maybe even a regular mug of tea for a Cambodian coconut on the beach. But where should you go? And how can you make the sums work, especially if you want to keep the dollars rolling in from home?
It turns out Australians aren’t just dreaming about a retirement gap year – many are acting on it. We’re seeing a genuine shift away from the old backyard BBQ hangouts to destinations that offer adventure, affordability, and, yes, a chance to live large on a sensible budget.
Where’s Best Value for Aussies in 2026?
Portugal. Mauritius. Spain. Uruguay. Austria. All top the international lists and, crucially, rank highly for low cost of living, good health care, and straightforward visa processes. Portugal, for example, regularly snares the crown: approachable visas, world-class health system, reasonable prices for rent, superb food and, let’s face it, sunsets over the Douro that you’ll never see in Ballarat.
Like the sound of Mauritius? It’s making waves with its territorial tax system and pension exemptions – not to mention warm seas, and a population that genuinely likes Australians. Spain and Austria echo the same charms: rich culture, accessible healthcare, and the buzz of being able to hop across the continent via budget airlines.
If your tastes run a little more exotic, Southeast Asia always delivers: Thailand and Malaysia both offer unfussy visa options, affordable rentals (often under $900 a month for something genuinely decent), and daily expenses that will have you wondering why you ever paid $22 for smashed avo. English is widely spoken, and the expat networks are robust – so robust you’ll almost certainly be invited to a Friday drinks before sundown.
And closer to home? New Zealand, our “other” backyard, is a perennial favourite: familiar language, familiar brands and a change of scenery without a long-haul flight.
How to make it pay: Renting your house
Here’s the clever bit. If you own your Australian home or investment property, renting it for a year turns your absence into income – potentially covering your overseas rent or, at minimum, taking the sting out of travel costs. In the current market, a well-located home in Sydney, Melbourne or Brisbane can net you anything from $700 to $1,500 per week. Apartments and smaller properties might pull in less, but with Australia’s rental market as tight as a drum, income is almost a given.
Tax-wise, you’ll need to continue declaring your rental income in Australia, even if you’re gallivanting in Porto or chilling in Chiang Mai. If you have a mortgage, property costs such as repairs, insurance and management fees can be deducted. Your profit is taxed at non-resident rates if you move overseas for the year and are deemed a non-resident, but for most gap year-ers who keep their primary residence, all costs stay relatively straightforward.
Even better: the current ATO rule lets you rent out your main residence for up to six years without losing the capital gains tax exemption – provided you don’t buy another main residence elsewhere in Australia. So, if your gap year stretches a little longer than planned, you’re still covered when you move back in or decide to sell on your return.
The non-financial sizzle
Adventure aside – and the adventure is considerable – the real gift is the change of pace. Living somewhere new forces you into new routines, new friendships, new food, new thinking. Morning walks through Lisbon’s Alfama might give way to afternoon paddles in Penang, or evenings spent browsing markets in the heart of Mexico City. Group tours and expat communities aren’t just for newbies: they’re lifelines and social networks, places to swap stories, tips and maybe even house keys for next month’s destination.
Health care? Most top destinations for retirees now boast impressive medical systems. Portugal, Spain, Thailand, Malaysia and New Zealand all offer solid public health care, and private insurance (often astoundingly affordable compared to Australia) is widely available.
Visa Jigsaw
Don’t leave visas till the last moment. Portugal, Spain and Malaysia all offer extended retirement or “long stay” visas for Australians, with requirements typically involving proof of income (your rental income will help here), health insurance and, of course, the all-important forms. Thailand recently launched a “Long Stay” retiree-friendly visa, making year-long holidays a breeze. France, Italy and Austria all have their own quirks -you’ll need to prove income and health cover, but for most Australians nearing retirement, it’s doable.
Life beyond the numbers
Can you do it alone? Yes. Should you? Why not? But think carefully: solo travel means full-scale independence, but a year is a long time. Consider travelling with a partner, or setting up home bases in expat-friendly cities to foster friendships and connections. Group tours or local meetups can be a welcome relief if homesickness bites.
Final thoughts
Your retirement gap year isn’t just about balancing the bank account or ticking off sights. It’s about the freedom to wake up somewhere else; to spend your superannuation, your time – and yes, your house rental revenue – living like a local, not a tourist. Australia’s best-value options might be halfway around the world or closer than you think, but the real reward is the experience.
So put the rental agent on speed dial, scan the visa requirements, and start dreaming. The best gap year is the one you’ve got time – and the means – to take.
Bon voyage.
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