Renting house out instead of Selling - experiences please?
Nov 13th 2009 | 9:08 pm
#31
Thread Starter
'Made in Ulster' Member
Joined: Dec 2008
Posts: 6,578
From: Brisbane, QLD. (Though an Ulster girl through and through!)
Re: Renting house out instead of Selling - experiences please?
Going to show my ignorance here but is NI subject to UK tax rules? I will assume it is but if not ... well can't help you. 
You will only need to pay tax on the profit not the rental income. If you have an interest only mortgage you can fully offset this, if you stay with an interest and capital mortgage then you can only offset the interest element of your mortgage payments. I am not sure about the deduction of 20% at source, it could be that this is something that agents do for convenience when they handle that side of things, but I would have thought you could elect for them not to do this. Ask them. You should do an annual tax return anyway, even if it is a loss.
It is extremely unlikely that you will be liable to capital gains tax (if UK rules apply). You would have primary residents relief for the entire period of ownership for the period you lived in the house and for the last three years of ownership even if you did not live there. So if you let it out for say, four years after you leave for Australia, then only one year would be assessed for CGT. So if you had the house for ten years over all, 1/10th of the gain would be chargeable to CGT but even then the first £40,000 of gain would be allowed as letting relief. In short, you would have to make a mighty big profit on the house to have anything to pay...
And finally, if you are out of the country for five years then you would not be liable to any capital gains tax in the UK.
What you really need to look into IMHO is the Australian side of it, i.e. whether you would be liable for Australian CGT when you sell as an Australian resident.
Hope this helps.
You will only need to pay tax on the profit not the rental income. If you have an interest only mortgage you can fully offset this, if you stay with an interest and capital mortgage then you can only offset the interest element of your mortgage payments. I am not sure about the deduction of 20% at source, it could be that this is something that agents do for convenience when they handle that side of things, but I would have thought you could elect for them not to do this. Ask them. You should do an annual tax return anyway, even if it is a loss.
It is extremely unlikely that you will be liable to capital gains tax (if UK rules apply). You would have primary residents relief for the entire period of ownership for the period you lived in the house and for the last three years of ownership even if you did not live there. So if you let it out for say, four years after you leave for Australia, then only one year would be assessed for CGT. So if you had the house for ten years over all, 1/10th of the gain would be chargeable to CGT but even then the first £40,000 of gain would be allowed as letting relief. In short, you would have to make a mighty big profit on the house to have anything to pay...
And finally, if you are out of the country for five years then you would not be liable to any capital gains tax in the UK.
What you really need to look into IMHO is the Australian side of it, i.e. whether you would be liable for Australian CGT when you sell as an Australian resident.
Hope this helps.
(Sorry if this sounds like a sarky reply, but it just riles me sometimes when people presume because the Irish Sea is there that we're not part of the UK! LOLOL Also, we have BRITISH television, BRITISH currency and BRITISH passports (some have Irish though, through choice) end of RANT...hope you understand why I've just written what I have
I'm proud to be British...thus my response.)
Last edited by Jen1977ni; Nov 13th 2009 at 9:12 pm.
Nov 13th 2009 | 9:22 pm
#32
Lost in BE Cyberspace
Joined: Feb 2009
Posts: 14,284
From: UK
Re: Renting house out instead of Selling - experiences please?
Well as it's part of the UK, then yes, we are subject to UK tax rules!!! lolololol You do know which four countries constitute the United Kingdom yes? England, Scotland, Wales and NORTHERN IRELAND!!! LOL
(Sorry if this sounds like a sarky reply, but it just riles me sometimes when people presume because the Irish Sea is there that we're not part of the UK! LOLOL Also, we have BRITISH television, BRITISH currency and BRITISH passports (some have Irish though, through choice) end of RANT...hope you understand why I've just written what I have I'm proud to be British...thus my response.)
(Sorry if this sounds like a sarky reply, but it just riles me sometimes when people presume because the Irish Sea is there that we're not part of the UK! LOLOL Also, we have BRITISH television, BRITISH currency and BRITISH passports (some have Irish though, through choice) end of RANT...hope you understand why I've just written what I have
I'm proud to be British...thus my response.) Also in my defence, some Northern Irish (well the ones I have met) would take offence at being referred to as British. Hard to know what to do for best.
But now I know for you.
Nov 13th 2009 | 9:50 pm
#33
Thread Starter
'Made in Ulster' Member
Joined: Dec 2008
Posts: 6,578
From: Brisbane, QLD. (Though an Ulster girl through and through!)
Re: Renting house out instead of Selling - experiences please?
Tis ok missus, me sorry for rant lol
Nov 14th 2009 | 10:05 pm
#34
Thread Starter
'Made in Ulster' Member
Joined: Dec 2008
Posts: 6,578
From: Brisbane, QLD. (Though an Ulster girl through and through!)
Re: Renting house out instead of Selling - experiences please?
Agent out yday, thoroughly impressed with him, very professional, and his wee camera took some fantastic photos, even better still, the sun was shining and the sky blue in the photos! Not bad for November in NI! It's already on the interweb, so it's all systems go! Now just the waiting game til we see if we get a decent tenant.
He's charging 7% a month for full management, no upfront fee for listing, but £225 comes out of first months rent and he holds onto deposit. He carries out very thorough checks on prospective tenants and also offers an insurance that if the tenant stops paying the rent, it'll start paying the rent and pay for legal expenses to evict them, if they don't leave of their own accord. That insurance is £99 for the year, which to me, is a price worth paying. Also, if a new tenant isn't found it pays half the rent for a few months til one is found.
Things are moving forward, let's just hope any prospective tenant doesn't want to move in, before we....MOVE OUT! EEEK!
He's charging 7% a month for full management, no upfront fee for listing, but £225 comes out of first months rent and he holds onto deposit. He carries out very thorough checks on prospective tenants and also offers an insurance that if the tenant stops paying the rent, it'll start paying the rent and pay for legal expenses to evict them, if they don't leave of their own accord. That insurance is £99 for the year, which to me, is a price worth paying. Also, if a new tenant isn't found it pays half the rent for a few months til one is found.
Things are moving forward, let's just hope any prospective tenant doesn't want to move in, before we....MOVE OUT! EEEK!
Nov 15th 2009 | 11:59 am
#35
Forum Regular
Joined: Dec 2006
Posts: 48
From: UK
Re: Renting house out instead of Selling - experiences please?
I wish you luck.
I've advertised my property for sale since May - nothing.
For rent since mid Sept - nothing - two secured tennants changed their minds.
If anyone knows of a better rental agency than Countrywide, then please let me know. (Based in England)
I've advertised my property for sale since May - nothing.
For rent since mid Sept - nothing - two secured tennants changed their minds.
If anyone knows of a better rental agency than Countrywide, then please let me know. (Based in England)
Nov 15th 2009 | 12:10 pm
#36
Lost in BE Cyberspace
Joined: Apr 2004
Posts: 10,375
Re: Renting house out instead of Selling - experiences please?
My advice - do whatever you can to sell the house - including dropping the price.
Renting out a house in the UK when you are in Australia is a nightmare, even with a good tenant. With a bad tenant is even worse.
You'll face all the scams we had to face - the fake "your drains have collapsed" video - (we didn't fall for it) - having stuff stolen like paving stones. Tenants refusing to pay the rent, very expensive void months with no tenant. My house ended up being rented to some sort of witch - literally, who ended up putting a curse on me when she asked me to halve her rent and I told her where to get off.
It means you will probably have to rent in Aus. which is also a nightmare as you will be treated as a second class citizen by estate agents and property owners who (if they are Italian or Greek) will turn up out of the blue without an appointment.
If you are in a position to buy in Australia and you end up selling your UK house for a profit (which I reckon isn't likely in nominal terms but with the one eyed Scottish idiot printing money like Robert Mugabe you could see inflation driven house price rises) -- you will have to pay capital gains tax.
Just my 2c IMHO.
Renting out a house in the UK when you are in Australia is a nightmare, even with a good tenant. With a bad tenant is even worse.
You'll face all the scams we had to face - the fake "your drains have collapsed" video - (we didn't fall for it) - having stuff stolen like paving stones. Tenants refusing to pay the rent, very expensive void months with no tenant. My house ended up being rented to some sort of witch - literally, who ended up putting a curse on me when she asked me to halve her rent and I told her where to get off.
It means you will probably have to rent in Aus. which is also a nightmare as you will be treated as a second class citizen by estate agents and property owners who (if they are Italian or Greek) will turn up out of the blue without an appointment.
If you are in a position to buy in Australia and you end up selling your UK house for a profit (which I reckon isn't likely in nominal terms but with the one eyed Scottish idiot printing money like Robert Mugabe you could see inflation driven house price rises) -- you will have to pay capital gains tax.
Just my 2c IMHO.
We rent out a house 4klm up the road, (OZ) that is enough of a headache
Out of 7 lots of tenants, one lot didnt cause us any trouble at all. The others ranged from out on bail
litigation lunatics, obsessive fixer uppers - that sounds good apart from DIY wiring Only 2 lots caused rent arrears, but 2 lots trashed the house.Charming people
Must add current tenant seems perfect, however I am sure we will discover bodies in the sewer when he leaves, hes too good to be real
Nov 15th 2009 | 4:54 pm
#37
Thread Starter
'Made in Ulster' Member
Joined: Dec 2008
Posts: 6,578
From: Brisbane, QLD. (Though an Ulster girl through and through!)
Re: Renting house out instead of Selling - experiences please?
Agree 100%.
We rent out a house 4klm up the road, (OZ) that is enough of a headache
Out of 7 lots of tenants, one lot didnt cause us any trouble at all. The others ranged from out on bail litigation lunatics, obsessive fixer uppers - that sounds good apart from DIY wiring Only 2 lots caused rent arrears, but 2 lots trashed the house.
Charming people
Must add current tenant seems perfect, however I am sure we will discover bodies in the sewer when he leaves, hes too good to be real
We rent out a house 4klm up the road, (OZ) that is enough of a headache
Out of 7 lots of tenants, one lot didnt cause us any trouble at all. The others ranged from out on bail
litigation lunatics, obsessive fixer uppers - that sounds good apart from DIY wiring Only 2 lots caused rent arrears, but 2 lots trashed the house.Charming people
Must add current tenant seems perfect, however I am sure we will discover bodies in the sewer when he leaves, hes too good to be real
Nov 15th 2009 | 11:55 pm
#38
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Joined: Feb 2008
Posts: 779
From: Perth baby!
Re: Renting house out instead of Selling - experiences please?
Nov 16th 2009 | 12:09 am
#39
Thread Starter
'Made in Ulster' Member
Joined: Dec 2008
Posts: 6,578
From: Brisbane, QLD. (Though an Ulster girl through and through!)
Re: Renting house out instead of Selling - experiences please?
The agent I'm using does at least 10 different checks on prospective tenants, so that's something!
Nov 16th 2009 | 1:04 pm
#40
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Joined: Apr 2008
Posts: 2,294
Re: Renting house out instead of Selling - experiences please?
I am aware that I will have to change my B&C insurance to a Landlord insurance, only covering the actual building, and have had a few reasonable quotes about this so far, great. (Is there anything in this landlords insurance that I should be looking out for?)
Also I know I need to have my EPC done before a tenant moves in, no problem, I've a friend who does those.
What else is involved in the letting out of a house?
You will need to register with one of the 3 deposit schemes and make sure the tenants full deposit is put into the scheme within 14 days of the tenant giving it. 3x the deposit payable to the tenant (in court) if you fail to do this, plus you can't issue a Section 21 if you fail to do this.
You need to give the tenant the prescribed information within 14 days of the tenant giving the deposit. You can't issue a Section 21 is you fail to do this.
If a letting agent is doing all this for you, make sure they do as the landlord is the one who has the legal responsibility for all of these things.
Last edited by formula; Nov 16th 2009 at 1:08 pm.
Nov 25th 2009 | 3:12 pm
#41
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Joined: Aug 2005
Posts: 3,303
Re: Renting house out instead of Selling - experiences please?
I have no idea what that last post was about
I too am looking to let a house out in the UK.
It has been up for sale since june 2007 without a result so now its renting time.
So upto now i have ascertained from this thread that i need to get the following:
An EPC
Any electrical appliances i leave tested or a clause put into the contract saying otherwise.
I need to inform the mortgage company that it will be a rental property and change the mortgage to interest only
I need to register with the HMRC Non Resident Landlord Scheme
Get an NRL1 from for the tax office
Anything alse guys?
Thanks, Jazzys
I too am looking to let a house out in the UK.
It has been up for sale since june 2007 without a result so now its renting time.
So upto now i have ascertained from this thread that i need to get the following:
An EPC
Any electrical appliances i leave tested or a clause put into the contract saying otherwise.
I need to inform the mortgage company that it will be a rental property and change the mortgage to interest only
I need to register with the HMRC Non Resident Landlord Scheme
Get an NRL1 from for the tax office
Anything alse guys?
Thanks, Jazzys
Nov 25th 2009 | 5:12 pm
#42
Democracy advocate
Joined: Mar 2006
Posts: 13,313
Re: Renting house out instead of Selling - experiences please?
I have no idea what that last post was about
I too am looking to let a house out in the UK.
It has been up for sale since june 2007 without a result so now its renting time.
So upto now i have ascertained from this thread that i need to get the following:
An EPC
Any electrical appliances i leave tested or a clause put into the contract saying otherwise.
I need to inform the mortgage company that it will be a rental property and change the mortgage to interest only
I need to register with the HMRC Non Resident Landlord Scheme
Get an NRL1 from for the tax office
Anything alse guys?
Thanks, Jazzys
I too am looking to let a house out in the UK.
It has been up for sale since june 2007 without a result so now its renting time.
So upto now i have ascertained from this thread that i need to get the following:
An EPC
Any electrical appliances i leave tested or a clause put into the contract saying otherwise.
I need to inform the mortgage company that it will be a rental property and change the mortgage to interest only
I need to register with the HMRC Non Resident Landlord Scheme
Get an NRL1 from for the tax office
Anything alse guys?
Thanks, Jazzys
If you have gas at the property you need an annual CORGI gas cert from a corgi-approved plumber
Ensure your buildings insurance covers lettings. Consider the legal cover and emergency breakdown coverage which reduces some of your exposure to unplanned costs - about 5-10 GBP each pcm
Install a couple of fire extinguishers (not legal, but if the tenant has a kitchen fire they might put it out) Consider smoke detectors.
Knock up a tenants guidance sheet - where are the fuses, water stopcock, gas stopcock, how to re-light the central heating, who should they call in an emergency like power failure, water leak etc (hence the emergency breakdown ins)
Nov 25th 2009 | 7:05 pm
#43
Thread Starter
'Made in Ulster' Member
Joined: Dec 2008
Posts: 6,578
From: Brisbane, QLD. (Though an Ulster girl through and through!)
Re: Renting house out instead of Selling - experiences please?
I MIGHT have found myself a tenant, the first couple to come see the property less than a week after it was advertised! 
They've offered 6 months rent UPFRONT which would be excellent and then the rest, monthly after that. I phoned my mortgage company and they said they'd let me pay the mortgage for the next 6 months, all in one lump. Can anyone see any problems with this so far? 
(Jenny = a bit naive)
They've offered 6 months rent UPFRONT which would be excellent and then the rest, monthly after that. I phoned my mortgage company and they said they'd let me pay the mortgage for the next 6 months, all in one lump. Can anyone see any problems with this so far? (Jenny = a bit naive)
Nov 25th 2009 | 8:53 pm
#44
Lost in BE Cyberspace
Joined: Jan 2009
Posts: 20,821
From: Brisbane
Re: Renting house out instead of Selling - experiences please?
I have no idea what that last post was about
I too am looking to let a house out in the UK.
It has been up for sale since june 2007 without a result so now its renting time.
So upto now i have ascertained from this thread that i need to get the following:
An EPC
Any electrical appliances i leave tested or a clause put into the contract saying otherwise.
I need to inform the mortgage company that it will be a rental property and change the mortgage to interest only
I need to register with the HMRC Non Resident Landlord Scheme
Get an NRL1 from for the tax office
Anything alse guys?
Thanks, Jazzys
I too am looking to let a house out in the UK.
It has been up for sale since june 2007 without a result so now its renting time.
So upto now i have ascertained from this thread that i need to get the following:
An EPC
Any electrical appliances i leave tested or a clause put into the contract saying otherwise.
I need to inform the mortgage company that it will be a rental property and change the mortgage to interest only
I need to register with the HMRC Non Resident Landlord Scheme
Get an NRL1 from for the tax office
Anything alse guys?
Thanks, Jazzys
Jan 1st 2010 | 10:18 am
#45
Forum Regular
Joined: Dec 2009
Posts: 86
Re: Renting house out instead of Selling - experiences please?
Really useful and unsightful thread 
Thanks
Kay
Thanks
Kay
