toon williams

We are getting professional advice on this little topic, but just wondered if anyone on here has done it/doing it/about to do it and knew of the implications regarding tax both UK and Oz.

Also any info on when you sell the property in say 2 years and then bringing cash into Oz, do we get clobbbbbbered??

Any info or advice greatly received as I said we will be talking to Finance guy in a couple of weeks but welcome views, advice and opinions!!

paulaljones

we looked into it briefly but was told that any money taken out after the first intial 6 months is taxed at 40%. So basically any money made on the property over the 2 years is taken by the tax man
I think more people would be doing it if it was worth it.

joho

Not strictly true. That rule only applies to savings and such I believe property is a different ball game. If its your only residence then you can happily sell and bring the proceeds over within 6 years (I think). If you buy a property to live in over here then I suggest you get your house valued, its the difference in the value of your UK property when you bought your second house and the value when you sell your UK property that you get taxed on as it is deemed captial gains. We are currently selling our UK property after letting it for 1 year. But we only rent here.

As for tax on rent and stuff, we had to declare it in our Aus tax return, but you can offset your mortgage payments, landlord ins, British gas 'gas, elec and plumbing cover and agents costs if any we shouldn't have to get taxed in UK but will still need to do a tax return - soon :scared:

Jo

suzimc

We are renting ours out while in US and will probably keep it when we move to Oz as the mortgage should be all paid up in a few years. We have someone sorting outn our tax for us because we are here with the company, but I know that after 6 months you are liable for some sort of tax in the UK, but you can fill in a form about being overseas and as far as I understand that makes you exempt. I know that's a bit vague...I've not found out too much as the time hasn't come yet!

As far as tax in Oz, I believe that if you sell your property after you move to Oz you have to pay tax on any extra cash you made in that time from either an increase in property value or difference in exchange rates. I believe it's only payable on the difference between what you would have got and what you do get. There have been some other threads about this recently - I asked the question myself about a week ago, but I can't find it to post the link....

toon williams

Thanks for answers!! Will run a check to find other threads about it!! Did try but for some reason that Search never works for me!!

To be honest we not keeping the house with hope of financial gain really as a safety net for 2 years!! No matter how many times we visit beforehand you never really know what it is like till you live there full time, and I guess we not as brave as most on here!!

I cant see the properties over here rising to much anyway over never couple of years if anything we anticipate them to fall!! But not to much I hope!!

I would sell and say sod it lets go for it, my husband is the worrier!! (Big TIME!!)

galloping gaijin

...and I believe you can also offset the cost of a flight back to check on the property

h2oskineil

Hi

We have rented our house in the UK and living in Perth.
The only negative so far is the rental agent we picked. They were really good when we met/interviewed and had good recommendations, however in the past 2 months things have gone down hill to the point they just will not return calls or emails, though they send the money!
They charge around 12%-15% of the rent depending on the area. Despite the fact we have an excellent tenant, I think you have to consider an agent when you live so far away.... just in case.

Before you leave the UK, fill out a NRL1 form. This allows you to receive all the rent money (less agent commission) direct to your account. You are then responsible for paying tax on the amount over your personal tax allowance, which is around £4000 (I think).
If the house is in joint names, you both have an allowance.... remember that.

You will no doubt be relying on the rent to pay your mortgage, so the continued income is important. You can get landlord insurance to cover the rent should your tenant not pay. Even the best tenant with the best references can loose their job or become ill etc. Here's a link to the company we used. http://www.letsure.co.uk/landlords/rentprotection.htm

Very reasonable cost for the cover you get.
100% of the rent paid until you get vacant possession Covers rent up to £5000 per month (I wish)
Covers legal costs brought about by the tenant.
Remove squatters
etc etc...... check the web site if you want more info.

You can get British Gas 5 star cover for all your gas and water pipes etc, about £30 per month. Good for piece of mind.

You will need a Landlord safety certificate for all your gas appliances and I believe soon for electrics though not just yet. British gas were very busy when we wanted them to check our property, so plan ahead. The certificate is renewed yearly.

Your building insurance will need to know there are tenants in the property, some companies will not cover them, but there are many that will.

You may have to change your mortgage to a 'Buy To Let Mortgage'. Check with your current lender, but it's another cost you will need to comconsider.

Another thing to consider and think about is that the cost of property is rising VERY fast here in Oz and if we don't get on the housing ladder soon, they may be too expensive in the future. Do your homework I'm sure they are rising much faster than the UK, which means a chance to make some money over here. And if you don't like it and go back, you should in theory have more money to repurchase in the UK.

Good luck
Neil.

suzimc

Sorry to jump on this thread - I had been looking for suitable landlords insurance so followed this link and it looks great - just wondering if anyone can recommend any other co's as I'd like to shop around first...

Thanks
Suzi

toon williams

Thank you for all that great info/advice!!

The agent we will use has been a good friend for a long time so I know they say dont mix bsns with pleasure and all that but we think better the devil you know!! Fingers crossed it will all work out ok!!

To be honest I think we will know after 12 months if we are staying for good or not, so I think it will be a short term rental rather than long term, so like you say it is a concern property prices goig up in Oz and then finding yourslef in a position where you cant afford to buy anything. We have talked about getting a small mortgage and buying a small house in Oz until we decide 100% to stay that way we are killing to birds with one stone!!

But like everything we will see what happens, making no definate plans therefore no expectations or Disappointments!! Well hopefully!!

FRAYNE

Hi we are planning on renting our house out for a year our mortgage company portman said they will add 1% on our mortgage repayments if we rent it out,and the only estate agents we have spoken to so far are palmer Snell who rent out lots of property in our area said they will charge 11% of the rent and give us 1 years rent protection free we will check with a few more agents to see what they have to offer before we decide what to do.
Janet

Juliecabs

Hi Neil,
Thanks for all this info. It's just what we needed
Julie. x

Grayling

You will be liable for Australian tax on the rental income.

G

pogsy

Is the Austalian Tax only on the profit after all your British allowances have been taken of your Rental income i.e. personal tax allowance, mortgage interest, repairs and any maintenance costs and agents commision including VAT ??

Grayling

Australia and the UK have a 'double taxation' agreement which means you only pay in one country. If you pay tax in the UK you can get a tax credit against Australian tax.

It is probably best to take professional advice as the whole issue of tax on overseas earned income is a nightmare. :scared:

G

windsordave

Just to re-ignite this one. Is it true that you can claim flights back to the UK to check on the property as a tax deduction? That'd be nice Thanks !
Dave