What to do with property owned before moving to Japan

I’m moving to Japan in the new year on a spouse visa (likely for around 5 years, but the timeline isn’t set). I currently own a house in Australia worth approx AUD 1 million with a mortgage of around AUD 675,000. I’m trying to decide whether to sell the property before I move or rent it out while I’m living overseas. Here’s a breakdown of the situation:

• Property Details:
  • Value: AUD 1 million
  • Mortgage: AUD 675,000
  • Potential rent: AUD 720 per week
  • Mortgage cost: AUD 855 per week (includes principal and interest, interest alone is AUD 585 at current rates)
  • I'd need to top up about AUD 135 per week to cover the mortgage. (I will be working as an independent contractor for an Australian company, with a reasonably high income so this is manageable).
• Additional Considerations:
  • If I sell before moving to Japan, I avoid paying a 20% capital gains tax (on any property value increase).
  • If I sell while living in Japan, I’ll need to pay the 20% capital gains tax.
  • I’m worried about managing a rental property from overseas, though I could hire a property manager (with fees of around 7-10% of rent).
  • I’m also concerned that if I sell now and property prices in Australia rise, I may get locked out of the market when I return.
  • Am I able to depreciate an overseas property as per Japanese tax law, even though Australian property generally increases in value?

I’ve run some scenarios:

1. Flat Property Growth: If I keep the house and the value doesn’t change, I’ll be building equity through mortgage payments, but there won’t be any capital gains.
2. 20% Property Growth: If the property appreciates by 20%, I would need to pay capital gains tax if I sell while living in Japan.
3. Sell Now and Invest: I could sell the house now, invest the proceeds in the S&P 500 (assuming 5-6% annual returns), and also contribute what I would have used for mortgage top-ups to the investment.

I’ve also considered a 50% property growth scenario, which would obviously yield the highest return if the market rises, but who really knows what will happen.

What do you think is the best course of action, considering the potential property value growth and capital gains tax implications? I’m particularly interested in thoughts on the long-term financial impact of each option and any insights specific to managing a property from Japan.

Thanks for your advice!