storey4

Hi all,

We were granted our visa on the 7th Feb this year and have since been trying to sell our house but with the market conditions as they are we are not having much luck. So, we have decided to rent the house out until the market picks up again.

We are wanting to know if renting our house out in the UK will prevent us from buying a house in OZ? We will have to send a small amount of money home each month as the rent will not cover the mortgage, insurance and emergency fund costs. Will this be taken into account when buying in Oz??

Any help on this will be appreciated!

Thanks in advance!

cathy_rainbow

Hi,

We have not sold our house in the UK renting it out instead. We have just bought a house here, all dead easy, the fact that we have collateral in the UK seemed to make the lenders fall over themselves to help - plus there is that gov grant thingy too....

Cathy

Hills Boy

What sort of visa have you got? If it's a PR one then it's straightforward, while (some) other visa types need approval from the FIRB before you can purchase a house - that's the short, simple version anyway.

I assume you'll need a mortgage here. The deciding factor will be whether the lender is satisfied that you can repay the loan, rather than anything to do with you having a house in the UK. So, they will simply take into account your outgoings and income to work out what you can repay and the amount they'll lend you.

On a related note, if you have income from outside Oz then just familiarise yourself with the tax issues.

I'm no expert in mortgages or tax issues though.

benlast

Ask a knowledgable tax advisor about capital gains tax: if you own two houses, one of them may well be considered as "not your primary residence", so when you sell it, capital gains tax may apply.

But like I said... ask a tax advisor

Cheers
b (looking into the same issues right now)

longreach

You can't have 2 primary residence Assuming you live in your Oz house for more that 183 days in the year then that will be your primary residence.

The fact that you have a rental in the UK will make no difference. You will still have to qualify as anyone else would based on your income and liabilities. Just make sure that you still have at least a 5% deposit on any new house over here.

renth

Capital loss more like.

Caroline G

Hi, we're renting out our UK house and have bought one here.

We basically didn't mention the UK house to the Aus Lender. If we had to rely on the rental income to buy the Aus house then the lender would have taken that income into account. We also went through an independent financial advisor. It was free to use him as he got commission through the company he placed our loan with.

You can then claim tax back on any interest paid on the investment property and money spent on it's upkeep etc. Our UK mortgage was converted to Int Only to take full advantage of this.

My understanding of the CGT is that you only would have to pay it on the profit made from when it stopped being your primary residence up until the date of sale, that is, from when you purchase the Aus property to live in it and sell the UK one. I have also heard that if you want to avoid the CGT you can by moving into the UK property for 6 months before sale. I've picked up this info here and there so Please check it with a financial professional before taking it as gospel.