l_jg

Hi, Our buyer on the house pulled out last week - two days before we were due to exchange contracts and we are now thinking of renting. We'll have practically no money to go over with :scared: but will have the monthly rent which will help to keep us going.
Is anyone else renting out their houses whilst they try to make a go of it in Oz? If so have you any tips about the taxation system - do we have to pay tax in the UK and Oz? Are there any good sites out there that will give me any more information on this?

All help gratefully received

sjn2003

Hey bummer about your buyer - there seems to be loads of those sh*tes about. Check out the link below, it should give you lots of the info you are looking for

http://www.inlandrevenue.gov.uk/nonr...gnrl1_bw.shtml

mumomonty

Hi Lisa
we rented when we moved to oz.
we left it with an agent as we were going to be so far away.
we left it unfurnished bar thecooker and something to cut the grass/hedge with.
it rented immediately
it was in a tiny hamlet.
good bits:
paid the mortgage easily
we felt safe in the knowledge that we had tennants that were vetted

bad bits:
the tennant was involved in a murder!
the agent didnt do their job
it was sub let
the tennant did arunner and owes us about 3k in damages and back rent
we didnt' have a leg to stand on

you have to declaire it on your tax forms andit's a tad complicated but it's seen as a business by theinland revenue.
the ATO (aus tax office) don't have anything to do with it.

good luck though. i'm sure we were very unlucky.
now sold! and we're buying in oz.

l_jg

Hi,

I've heard some horror stories about renting - but I think yours just about takes the biscuit! We are also thinking about doing it part furnished - as then there's less things that can go wrong (hopefully!).

Did you manage to sell it ok from Oz, or did you have to come back to the UK to organise things....

I've looked at the link from sjn2003 and found many forms and booklets there - so interesting bedtime reading tonight but at least we're safe in the knowledge that the Australian tax system won't be interested in any money we make!

Thanks for your help

glittababe

Hi there,

We're renting out our house part furnished as we have a fixed rate mortgage at 3.6% at the moment. It changes to variable July 2005 (which is when we'll come back to UK to sell it), hopefully it would have increased with value and we'll get more equity!

Tips: get a good letting agency! We had several come round but after recommendations we went with Essex and Suffolk Lettings in Colchester. They have been fantastic in the selection process and have turned down prosepctive tenants because they just had a 'feeling' about them (gut instinct). Only leave stuff in the house that you don't mind getting trashed. Ask friends and family to keep an eye on the place, if they have any concerns ask the agent to do a spot check.

Don't worry about the Inland Rev. We're exempt from paying tax but you have to get the form in early.

Our letting agents also organised the finalisation of all our bills etc. I phoned the council up and they said "thats ok Ms Jones, we already know the date your leaving and have prepared your council tax refund!" Fab!

Good luck with it all!

Don

Don't forget that exemption permission only means you are exempt from paying tax upfront, automatically. It doesn't mean you are not liable to UK tax.

You will still need to do a tax return for the UK and include the rental income in your AUS tax return.

renth

The ATO would be very interested if they found out you were receiving income from rent and not declaring it in your Australian tax return, regardless of whether it was being remitted to Australia or not.

RichS

my experience...it was ok to rent our house out whilst we had tennants, but it became a little stressful in those blank periods. Its all well and fine if you have money to cover the mortgage for say 6 months, but if not you'll get a bit fretful.

On the Tax front - yup the ATO will want to tax any profit you make at the difference between what you paid in the UK and your AUS marginal rate (up to 48.5%) - that from my accountant.

Alan Collett

As others have noted, the ATO is most definitely interested in your net rental income from a UK property, but there may be deductions available in Australia that give a lower assessable amount than in the UK (eg depreciation adjustments).

Also, don't forget capital gains tax and inheritance tax considerations ...

Best regards.

johanne

[we felt safe in the knowledge that we had tennants that were vetted

bad bits:
the tennant was involved in a murder!
the agent didnt do their job
it was sub let
the tennant did arunner and owes us about 3k in damages and back rent
we didnt' have a leg to stand on


The same thing had happened to my friend who moved to Spain last year, she put her lovely 4 bedroom detached house with lots of land and extras into the hands of a certain agents in the UK...
They vetted this man and put him in the house it turned out he was an undertaker and stored bodies in the house without permission and put a big electric gate and fence around the property, again without permission.
Turns out he was a drug dealer selling ecstacy "i think" the police raided the house and found 60,000 tablets ( even in the coffins) the house was totally trashed and he owed more than 3000 in back rent, people were knocking on the door asking for money that he owed for the fence that he didnt pay for...To top it all off the agents say its not their responsibilty because they didnt recommend these people
My friend had to fly back to the UK to fix her house up before going back to Spain penniless and upset and is now putting her house on the market...
So dont trust all agents with your bricks n mortar.....

DIMO8

Renting would have been our option when we go to OZ, however having read these posts we will have second thoughts about it.
How good is this forum, its given us so many tips and advice with our future plans. Thanks everyone!!!!!!! D

helinuk

We were very nervous about putting our house up for rent when we went to singapore because my SIL had just had a nasty experience of non payers and trashed house.
We rented out for 6 yrs. we had a good experience with lovely Australian tenants, one couple from Sydney, one from Melbourne. The agent inspected the house every 3 months. Corporate lets are good and fairly safe.

renth

Our house has just been put on the market and it has coincided with the tennant deciding to stop paying rent.

Lord only knows what she is saying to prospective buyers

I guess we're about to discover that the landlord's insurance policy to cover such eventualities is not worth the paper it is printed on.

Don

Sorry to hear that renth. Nightmare scenario. How long will it take to evict?

jad n rich

Only had one rental property ever, but we are now thinking of selling it, because if we do return to the UK it will be a major hassle. At the moment the 7pm the toilet wont flush call is just a plunger away, if we were in the UK it would become a major drama and probably expensive too.

Tenants are pot luck we got both our lots through same agent, same proceedures, very choosy they knocked back dozens of applications till they found the perfect one, however after just 4 months these tenants want to break the lease, so here we go again.

Having a rental on other side of world sounds like a nightmare to me, because after 3 landlord years you realise how much can go wrong.