Buying house in Oz with prop in Uk still
 

I hope someone can help me out Mr Diamond maybe :D we are looking to buy a house in oz at around $450k But we still have our house in the UK. We couldn't sell it and are renting it our for a year before re marketing. Most of our money is tied up in it about £65k therefore we only have approx $25k to $32k with first buyers grant. Does anyone know who will give us a mortgage of upto 95% and what the tax implications are when we sell are UK house. How much capital gains would we have to pay if any. Are plan is to have an interest only mortgate or half half until house is sold and then take all the proceeds off the loan amount when the house sells. Just dont want to lose all our hard earned profit by paying tax on it :(

Cheers Jo

Re: Buying house in Oz with prop in Uk still
 

Why not rent when you first arrive that gives you the opportunity to look around and find some good deals. House prices in Oz aren't moving much at the mo in any of the major cities. Also you won't believe how easy it is to rent good quality property here at half the price a mortgage would cost you.

That way you could claim your UK house as your principle place of residence and pay no CGT on it when you sell.

But if you insist on buying in Oz once you own a property here you would need to value your UK property on the date you take possession of your Oz house in Oz dollars. Any capital gain would be worked out from the gain since you purchased your Oz property.

HOWEVER any costs associated with the sale would reduce the capital gain liabilility (assumeing it went up in price) and maybe eliminate it entirely. Remember it is a self assessment system here and they would have very little idea of what was happening in the UK houseing market.

I've submited now 6 tax returns in Oz and they have never querried any of my foreign income declarations and I've had to produce NO documentation to prove what I've declared on my tax return.

So basically it's no big deal.

Re: Buying house in Oz with prop in Uk still
 

Hello

As an idea what about taking the capital out of your house via re-mortgage in the UK. If the rent will cover the costs this might be an idea.

Interest only loans (on a primary residence) are not common in Australia and you may find that you pay a premium for it. These are more common in the buy-to-rent market.

Have you checked the UK tax website for time frames on selling your principal house. Australia you have 5 years (Or you used to) before capital gains issues became a problem, but this may be different in the UK.

Re: Buying house in Oz with prop in Uk still
 

I thought that capital gains on property is fine unless you own another property which you live in, then the other is seen as an investment and not you primary residence, I think I will need to see an accountant or FA.

First poster, thanks for your idea, but we are already living and renting in Oz and I am fed up of not being able to do anything or worrying about the kids making marks on the walls etc, I want a place of my own.

Re: Buying house in Oz with prop in Uk still
 

If your house is valued at GBP 200k today and sells for GBP 200k in 12 months time you may think there is no CGT to consider.

Wrong - there could have been a loss or gain due to the exchange rate movements.

Am I right ?

Re: Buying house in Oz with prop in Uk still
 

Sorry seemed to have missed this bit in your reply. Thank you very interesting. With the housing market in the uk being so bad, I cant see that the house will rise that much if at all, and the worst case being I may have to pay a small bit of GST. I can live with that :D