Anyone letting?
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I have seen several threads on here on selling houses after moving to Australia, but nothing about letting. (Maybe I just haven't been paying attention!) We have had ours up for sale for a few weeks, and like everyone else, we're experiencing little or no interest in the flat market.
Rather than have the house sitting here empty, running down and looking generally undesirable, we're seriously considering letting it instead, at least for the time being. We see this as being advantageous partly because it would give us a safety net if things don't work out in Oz for us - not that I'm expecting that to be the case, but you never know - and partly because it would give us a financial break - and who doesn't need those!
We have a 3-bed semi in a quiet little Somerset village, good area for commuters and about a mile from a London main branch line. We have a trustworthy letting agent and friends in the village who could generally keep an eye on it.
So hit me with some reasons not to go down this route....or some reasons to do it.
![Sad](https://britishexpats.com/forum/images/smilies/sad.gif)
Rather than have the house sitting here empty, running down and looking generally undesirable, we're seriously considering letting it instead, at least for the time being. We see this as being advantageous partly because it would give us a safety net if things don't work out in Oz for us - not that I'm expecting that to be the case, but you never know - and partly because it would give us a financial break - and who doesn't need those!
![Roll Eyes](https://britishexpats.com/forum/images/smilies/rolleyes.gif)
We have a 3-bed semi in a quiet little Somerset village, good area for commuters and about a mile from a London main branch line. We have a trustworthy letting agent and friends in the village who could generally keep an eye on it.
So hit me with some reasons not to go down this route....or some reasons to do it.
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Hiya,
We have a second flat that we are having trouble selling at the moment but have had this rented out for the last 2 years anyway. We will probably now instruct the agent to relet it instead.
In our experience, the managing agent took care of any repairs for us, sorted out anything which needed doing. In actual fact in the last two years we've had a few emails from the agent but thats about it. Relatively painless and would be no different from Aus.
Well worth doing and you can of course just sell it next year if you wanted to.
Australia does tax on worldwide income so there may be tax implications but nothing too bad to worry about that we can see.
Hope that helps!
We have a second flat that we are having trouble selling at the moment but have had this rented out for the last 2 years anyway. We will probably now instruct the agent to relet it instead.
In our experience, the managing agent took care of any repairs for us, sorted out anything which needed doing. In actual fact in the last two years we've had a few emails from the agent but thats about it. Relatively painless and would be no different from Aus.
Well worth doing and you can of course just sell it next year if you wanted to.
Australia does tax on worldwide income so there may be tax implications but nothing too bad to worry about that we can see.
Hope that helps!
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hia, we've rented our home out before and lived away - but not here in aus. I stuck this onanother thread -hope its of use
You need to
- Tell your mortgage company
- Tell your insurance company (buildings)
- Get tax advice, you will pay Aussie Income tax on the income ,but you deduct mortgage payments etc, or at least interest on mortgage. So it works out ok usually, sort that out when you get here.
- You need to transfer money from UK To Aus regularly (your profits) Use these guys they're good and they get me an ipod if enough people use my referral for giving them such good advice ;-) http://www.tranzfers.com/refer.asp?r=ijcollins , register with them from UK before you leave its much much much easier. Ive used them about 20times and they're realy really quick/reputable/good/safe , all transactions are online so its easy to do.
- Appoint a managing agent, better to pay them 10% than be on phone trying to sort out aplumber at 1am
- Let the agent rent the place
- Dont rent to friends - nightmare scenarios applenty
- Consider the impact on re-selling the house, tenants dont do you any favours
- Get online banking before you come here for UK bank accounts so you can manage it remotely
- You want to consider remortgaging it before you leave it to get equity out.
Good luck.
You need to
- Tell your mortgage company
- Tell your insurance company (buildings)
- Get tax advice, you will pay Aussie Income tax on the income ,but you deduct mortgage payments etc, or at least interest on mortgage. So it works out ok usually, sort that out when you get here.
- You need to transfer money from UK To Aus regularly (your profits) Use these guys they're good and they get me an ipod if enough people use my referral for giving them such good advice ;-) http://www.tranzfers.com/refer.asp?r=ijcollins , register with them from UK before you leave its much much much easier. Ive used them about 20times and they're realy really quick/reputable/good/safe , all transactions are online so its easy to do.
- Appoint a managing agent, better to pay them 10% than be on phone trying to sort out aplumber at 1am
- Let the agent rent the place
- Dont rent to friends - nightmare scenarios applenty
- Consider the impact on re-selling the house, tenants dont do you any favours
- Get online banking before you come here for UK bank accounts so you can manage it remotely
- You want to consider remortgaging it before you leave it to get equity out.
Good luck.
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Thanks for the replies.
[QUOTE]
Sadly, this isn't an issue. We are in the situation where we have the choice of leaving the house empty - which will cost us dearly in mortgage payments in addition to rent in Oz - and hoping it sells in the next 13 weeks
OR
letting it, which would give us some income against it, but we would be extremely surprised if any rental income covered the mortgage with profit. We may cover the mortgage if we're superbly lucky...
If we do rent it out, we'll almost certainly end up transferring money from Oz to the UK but at least we'd be making something out of it!
Thanks for all the advice gratefully received and noted. Some very good points.
Thanks - we're going to need it!
![Smile](https://britishexpats.com/forum/images/smilies/smile.gif)
[QUOTE]
Originally Posted by spalen
You need to
- Get tax advice, you will pay Aussie Income tax on the income ,but you deduct mortgage payments etc, or at least interest on mortgage. So it works out ok usually, sort that out when you get here.
- You need to transfer money from UK To Aus regularly (your profits)
- Get tax advice, you will pay Aussie Income tax on the income ,but you deduct mortgage payments etc, or at least interest on mortgage. So it works out ok usually, sort that out when you get here.
- You need to transfer money from UK To Aus regularly (your profits)
![EEK!](https://britishexpats.com/forum/images/smilies/eek.gif)
OR
letting it, which would give us some income against it, but we would be extremely surprised if any rental income covered the mortgage with profit. We may cover the mortgage if we're superbly lucky...
![Sad](https://britishexpats.com/forum/images/smilies/sad.gif)
If we do rent it out, we'll almost certainly end up transferring money from Oz to the UK but at least we'd be making something out of it!
Thanks for all the advice gratefully received and noted. Some very good points.
Good luck.
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[QUOTE=Bella Donna]Thanks for the replies.
Sadly, this isn't an issue. We are in the situation where we have the choice of leaving the house empty - which will cost us dearly in mortgage payments in addition to rent in Oz - and hoping it sells in the next 13 weeks
OR
letting it, which would give us some income against it, but we would be extremely surprised if any rental income covered the mortgage with profit. We may cover the mortgage if we're superbly lucky...
If we do rent it out, we'll almost certainly end up transferring money from Oz to the UK but at least we'd be making something out of it!
Thanks for all the advice gratefully received and noted. Some very good points.
Thanks - we're going to need it!
Hi Bella Donna,
We will be renting out our house in the UK when we go to Oz, only as a safety net really. We can then come home if it doesn't work out. The only disadvantage we can see is that we will not be able to buy in Oz until we sell our home here. I can live with this for a couple of years. After this time, we'll know whether or not we'll be staying in Oz permanently or not, and then our letting agent will sell for us if necessary without us having to come home.
Good luck with whatever you decide.
Claire.
![Smile](https://britishexpats.com/forum/images/smilies/smile.gif)
Sadly, this isn't an issue. We are in the situation where we have the choice of leaving the house empty - which will cost us dearly in mortgage payments in addition to rent in Oz - and hoping it sells in the next 13 weeks
![EEK!](https://britishexpats.com/forum/images/smilies/eek.gif)
OR
letting it, which would give us some income against it, but we would be extremely surprised if any rental income covered the mortgage with profit. We may cover the mortgage if we're superbly lucky...
![Sad](https://britishexpats.com/forum/images/smilies/sad.gif)
If we do rent it out, we'll almost certainly end up transferring money from Oz to the UK but at least we'd be making something out of it!
Thanks for all the advice gratefully received and noted. Some very good points.
Thanks - we're going to need it!
Hi Bella Donna,
We will be renting out our house in the UK when we go to Oz, only as a safety net really. We can then come home if it doesn't work out. The only disadvantage we can see is that we will not be able to buy in Oz until we sell our home here. I can live with this for a couple of years. After this time, we'll know whether or not we'll be staying in Oz permanently or not, and then our letting agent will sell for us if necessary without us having to come home.
Good luck with whatever you decide.
Claire.
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Originally Posted by Bella Donna
I have seen several threads on here on selling houses after moving to Australia, but nothing about letting. (Maybe I just haven't been paying attention!) We have had ours up for sale for a few weeks, and like everyone else, we're experiencing little or no interest in the flat market.
Rather than have the house sitting here empty, running down and looking generally undesirable, we're seriously considering letting it instead, at least for the time being. We see this as being advantageous partly because it would give us a safety net if things don't work out in Oz for us - not that I'm expecting that to be the case, but you never know - and partly because it would give us a financial break - and who doesn't need those!
We have a 3-bed semi in a quiet little Somerset village, good area for commuters and about a mile from a London main branch line. We have a trustworthy letting agent and friends in the village who could generally keep an eye on it.
So hit me with some reasons not to go down this route....or some reasons to do it.![Smile](https://britishexpats.com/forum/images/smilies/smile.gif)
![Sad](https://britishexpats.com/forum/images/smilies/sad.gif)
Rather than have the house sitting here empty, running down and looking generally undesirable, we're seriously considering letting it instead, at least for the time being. We see this as being advantageous partly because it would give us a safety net if things don't work out in Oz for us - not that I'm expecting that to be the case, but you never know - and partly because it would give us a financial break - and who doesn't need those!
![Roll Eyes](https://britishexpats.com/forum/images/smilies/rolleyes.gif)
We have a 3-bed semi in a quiet little Somerset village, good area for commuters and about a mile from a London main branch line. We have a trustworthy letting agent and friends in the village who could generally keep an eye on it.
So hit me with some reasons not to go down this route....or some reasons to do it.
![Smile](https://britishexpats.com/forum/images/smilies/smile.gif)
If things work out, we will sell the house after the first year and hopefully have enough profit to get something better in Oz. That's the plan so far.
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Have a read of this thread BD.
Some food for thought.
http://britishexpats.com/forum/showt...ght=bix+rental
Some food for thought.
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You won't need to worry too much about the tax on the rental income in Oz because they have depreciation allowances here for investment properties.
Basically it means you can claim about 2% of the value of the house (NOT the land) as a tax deduction against any income from the house. So if the house is valued at 100,000 pounds you could claim at least a 2,000 pound allowance. If you go to the trouble of getting all fixtures and fitting valued they all have higher depreciation allowances and so you can eaisly double this allowance to 4,000 pounds.
It's quite a novel approach to to assume a house goes down in value for tax purposes.
Basically it means you can claim about 2% of the value of the house (NOT the land) as a tax deduction against any income from the house. So if the house is valued at 100,000 pounds you could claim at least a 2,000 pound allowance. If you go to the trouble of getting all fixtures and fitting valued they all have higher depreciation allowances and so you can eaisly double this allowance to 4,000 pounds.
It's quite a novel approach to to assume a house goes down in value for tax purposes.
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Originally Posted by Bix
Have a read of this thread BD.
Some food for thought.
http://britishexpats.com/forum/showt...ght=bix+rental
Some food for thought.
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http://britishexpats.com/forum/showt...ght=bix+rental
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Originally Posted by Kiwipaul
You won't need to worry too much about the tax on the rental income in Oz because they have depreciation allowances here for investment properties.
Basically it means you can claim about 2% of the value of the house (NOT the land) as a tax deduction against any income from the house. So if the house is valued at 100,000 pounds you could claim at least a 2,000 pound allowance. If you go to the trouble of getting all fixtures and fitting valued they all have higher depreciation allowances and so you can eaisly double this allowance to 4,000 pounds.
It's quite a novel approach to to assume a house goes down in value for tax purposes.
Basically it means you can claim about 2% of the value of the house (NOT the land) as a tax deduction against any income from the house. So if the house is valued at 100,000 pounds you could claim at least a 2,000 pound allowance. If you go to the trouble of getting all fixtures and fitting valued they all have higher depreciation allowances and so you can eaisly double this allowance to 4,000 pounds.
It's quite a novel approach to to assume a house goes down in value for tax purposes.
The 2.5% is based on the original build cost, not current value, and you can claim the deduction for 40 years from the date construction was completed.
Where a new owner is unable to determine precisely the construction expenditure associated with a building, an estimate provided by an appropriately qualified person may be used. Appropriately qualified people include:
â–ª a clerk of works, such as a project organiser for major building projects
â–ª a supervising architect who approves payments at stages of projects
â–ª a builder who is experienced in estimating construction costs of similar building projects
â–ª a quantity surveyor.
Unless they are otherwise qualified, valuers, real estate agents, accountants and solicitors generally have neither the relevant qualifications nor the experience to make such an estimate.
Where a new owner is unable to determine precisely the construction expenditure associated with a building, an estimate provided by an appropriately qualified person may be used. Appropriately qualified people include:
â–ª a clerk of works, such as a project organiser for major building projects
â–ª a supervising architect who approves payments at stages of projects
â–ª a builder who is experienced in estimating construction costs of similar building projects
â–ª a quantity surveyor.
Unless they are otherwise qualified, valuers, real estate agents, accountants and solicitors generally have neither the relevant qualifications nor the experience to make such an estimate.
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Don't forget that there may be times when there is no tenant so you could end up paying mortgage on Uk and rent on Aus properties. Unless you pay shedloads to agent to cover any un occupancy.
Also be very very careful as to who manages. Get lots of recommendations. Just cos they say they will get best quotes in for works, etc doesn't mean they will when you're on other side of the world.
Don't want to put you off but best to be aware of pitfalls.
Also be very very careful as to who manages. Get lots of recommendations. Just cos they say they will get best quotes in for works, etc doesn't mean they will when you're on other side of the world.
Don't want to put you off but best to be aware of pitfalls.
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Originally Posted by ABCDiamond
But don't forget that those 2.5% that you claim each year will be added back on to the final profit you make for CGT purposes, when the property is finally sold.
ATO
ATO
Also if you continue to claim the house as your principle place of residence I'm not sure what the tax situation would be regarding depreciation, as their is no CGT liability for up to 6 years.
Also with foreign investments of any sort you don't have to declare any details on your tax return. You'd only have to declare details if you got audited and that is highly unlikely (though not impossible). The ATO I believe struggle to audit foreign investments unless we are talking about millions as it's just too difficult for them and not cost effective.
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Originally Posted by Kiwipaul
Not neccessary so. If you can convince the Tax office that the house has depreciated and the gain is due to the rise in the value of the land their would be no liability.
Also if you continue to claim the house as your principle place of residence I'm not sure what the tax situation would be regarding depreciation, as their is no CGT liability for up to 6 years.
Also with foreign investments of any sort you don't have to declare any details on your tax return. You'd only have to declare details if you got audited and that is highly unlikely (though not impossible). The ATO I believe struggle to audit foreign investments unless we are talking about millions as it's just too difficult for them and not cost effective.
Also if you continue to claim the house as your principle place of residence I'm not sure what the tax situation would be regarding depreciation, as their is no CGT liability for up to 6 years.
Also with foreign investments of any sort you don't have to declare any details on your tax return. You'd only have to declare details if you got audited and that is highly unlikely (though not impossible). The ATO I believe struggle to audit foreign investments unless we are talking about millions as it's just too difficult for them and not cost effective.
With claiming it as a principle place of residence it is doubtful they would allow any depreciation.
Good point about the "foreign investments of any sort you don't have to declare", but if you do get caught then the tax plus penalties plus interest add up. I agree that not many will be checked, but here is a quote from the ATO website:
We are improving data matching with foreign tax administrations. This year we will complete 1,000 data matching audits
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Originally Posted by ABCDiamond
The CGT is based on land and house value, so the net effect will be the same, no matter how the values are apportioned.
Take an extreme case, you buy a brand new house rent it for 12 months and then sell. During this 12 months you claim the depreciation on the house but the tennants trash it. However you still sell it at a profit and you would be able to claim the depreciation on the house is valid (due to the damage done) and not repayable as the value of the house has gone down. In this situation the gain was made from the land value increaseing.
Just my opinion and it's how I'd agrue the case.
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