AandP

Hi,
This is our first post, and I'm sure wont be our last.
We are from the UK aged 59 & 53 and like the idea of having a holiday home in Australia to spend the winter months and then rent it out furnished when we are not there. From what I can see we are able to get a tourist visa which lets us stay up to 6 months and it also looks like we can buy property as long as it's a new build. But what I can't seem to find is, are we allowed to rent it out for the periods we are not there?

The idea is that the rent will pay for the costs of ownership and travel to and from Australia etc rather than wanting a profit.

Has anyone done this and what are the pros and cons and anything else we should be aware of? Should anyone need more info please let me know.

Many thanks.

spouse of scouse

A collection of thoughts that came to mind while reading your post that may help in your planning.

Pretty sure you could rent out your Australian property, but as a non-resident for tax purposes you wouldn't be able to take advantage of the tax-free threshold, which means you'd pay tax on every rental dollar earned. The UK and Australia have a double taxation agreement but I don't know the ins and outs as it relates to your situation. It's absolutely essential that you get some professional tax planning assistance before committing to anything.

In terms of renting the property through the Australian summer months, you'd need to choose the location very carefully. 'Ordinary' tenancies in Australia tend to be for 12 months, so you'd probably be looking for a property that would be suitable for a holiday let. What part of Australia are you thinking of?

Holiday lets bring their own challenges - you'd need someone who lived relatively near to the property to manage things like guest check in/out, cleaning and laundry between lets, maintenance, and to handle any requests/emergencies/problems such as anti-social behaviour while the property was occupied. The property would also need to be fully equipped, down to the teaspoons. You'd also need to consider how you were going to market the property, take bookings, receive payments and refund bonds.

An 'ordinary' tenancy is a bit less time consuming to manage but you'd still need someone to vet prospective tenants, manage changing the utilities into the tenant's name, be available for maintenance requests, collect rent and manage defaults etc.

Whatever type of tenancy you offered, you'd need to be up to date with the relevant legislation and ensure you're compliant.

Unlike the UK, Council tax (called Council/local government rates in Australia) is paid by the property owner, not the tenant. This is true for both 'ordinary' tenancies and for holiday lets.

Hope that helps a bit!

NickyC

I suspect that the OP is wanting to stay in the house during the Australian summer (in order to escape the UK winter) - therefore will want to let the house out during the Australian winter.

If that's so, then it needs to be located somewhere where Australians will want to go to in winter. That really means Queensland. And the further north, the better. Which means it's probably not the best place to be in summer (too hot, too humid).

The usual advice given on this subject is that second properties are either kept as a holiday house or kept as an investment. Because they don't really mix. The times of the year when you want to stay in them are also the most attractive time for renters so the rent is maximised. If you don't want to stay there in the winter - neither does anyone else.

spouse of scouse

I think you're right Nicky When the OP said they were looking for a home to spend the winter months in I thought they meant the Oz winter.

Shame though, a holiday let would have been a much better proposition in the Oz summer!

Pulaski

I would be interested to know why AandP are looking at Australia, when there are many places in the northern hemisphere that would work better, meaning that they could get the benefit of warm/pleasant weather during the British winter, and have a sporting chance at some holiday lets during the time they're back in the UK.

Pretty much anywhere on the Med would work, and be a dämn sight easier to get to and from, or, and I hate to say it, but Florida would be another option. There are also possibilities in places in the Far East, such as Thailand, Malaysia, or the Philippines, or in Central or South America, such as Panama or Ecuador.

That said, by the time you've paid taxes and management fees you shouldn't look at any property that you occupy half the year as a gold mine - but you should be able to get some summer season income to defray your expenses if you choose somewhere that has (northern hemisphere) summer holiday attractions.

Beoz

Travelling every month I would agree, every 6 months, no dramas.

Hmmm. Language, corruption, lack of decent medical facilities, lack of Coronation Street, ........... anything else?

AandP

Hi again and many thanks for your inputs so far!

To answer some questions, we would indeed like to escape the UK winters. Our initial thoughts were to buy in Brisbane as we have friends who live in the suburbs, and that is why we are thinking Australia in general as I'm sure that being new in a country it is a lot easier if you at least know someone there to start with.

But, saying that I wouldn't like to have to rope them in to look after anywhere while we were away. But rather than a holiday home we thought if we managed to buy a property close or close-ish to the centre of Brisbane we would increase our chances of letting purely due to the denser population. We would have to speak to a letting agent to find out if what we would like to do is realistic and are there enough people wanting to rent a furnished property short term. Maybe even to other UK'ers just landing and wanting to rent while they find a permanent home etc. We envisage having to employ a management agent to find us tenants and sort out any problems on our behalf etc ,etc.

Re the tax situation I wonder if we would have to pay on what we received minus the costs for the agent, which would help? The financial side of things would have to be very carefully looked into as we wouldn’t want any surprises so we would seek professional advice first but really appreciate your thoughts so far.

The idea of profits and goldmines etc isn't really of interest to us but I think if the property didn't pay for its self in rent after taxes and other costs then I think the whole project would be a no go.

I know there are going to be a lot of costs and calculations to take on and a lot of things we haven’t considered yet so please keep your thoughts and suggestions coming. But before we get ahead of ourselves we need to know if it’s legally possible for a visitor to own and rent out a property.

Thanks again.

Moses2013

Ckeck out link here regarding ownership of property https://www.ato.gov.au/Individuals/I...-in-Australia/Pulaski made some good points about buying elsewhere in Europe. And when you say Brisbane, many would actually argue that summer in Brisbane is the worst time. While you of course get plenty of sun, it rains a lot more in summer and severe thunderstorms can spoil your evenings, not to mention the heat. I don't know how much you're willing to spend, but that's another factor to consider.

AandP

Many thanks for that link, it looks like we are indeed able to buy and rent in Australia. But looks like we may need to prove it's not intended as our primary residence so may need to split our time more on favour of the UK.

Re buying a property in another country, that really isn't for us but all suggestions are good ones at this stage. We envisage buying a property in the 600k to 670k range if that helps or makes a difference?

Dorothy

Has anyone mentioned the visa situation yet? Yes, you can potentially be here for 6 months, but what will you do if the border agent decides one trip that they're not satisfied you're genuine tourists and denies you entry? At 53 and 59 you're young to be retired and DOHA agents could wonder how you're going to support yourselves here for 6 months without working.

AandP

Many thanks Dorothy, I think I have read that when applying for visas they can ask for bank statements etc to prove we can support ourselves and check we have return flights etc? Or have I made this up?

Moses2013

Fair enough, but apart from your friends/weather, what are the reasons you are only focused on Australia? For 300K, you could buy the most amazing villa in a European sun destination and you can use all year round. You'd still have 300K left for holidays to Australia. Regardless of Brexit talks, consider health care, taxes, visa + everything else.

Dorothy

Yes, they can request those things and a visa may well be granted. But that doesn't give you any right to enter the country if the border agent feels you are not a genuine tourist. Owning a property and wanting to stay 6 months every year may make them suspicious that you are trying to live in Australia without the proper visa.

What will you do for 6 months here? Will you be touring around? Volunteering? Looking to do a bit of part time work to fill your hours? Surely living in a house in Brisbane for 6 months you'll need something to do.

Pollyana

Even the legality of volunteering when on a tourist visa is a bit 'iffy' and (as I know you are aware) part-time work is out of course. Mind you, if they are spending 6 months in Brisbane in the summer, then a large part of it will probably be spent hiding in the air con that they will hopefully have!

AandP

Hi, as I've said it's not about the cash side of things it's where we feel comfortable for a variety of reasons. Hope that helps.