jamesegrant

Hi

Wondered if anyone had guidance/experience in keeping a UK house on - for rental and capital appreciation (with a UK mortgage) and then migrating to OZ and trying to get a mortgage there? Therefore, havign two house and two mortgages?

Teh UK one would easily have the mortgage covered by rental income so could probably be a buy to let??

Thansks in advance for any guidance/advice

Cheers

James

jan

You need to find out your tax implications first and foremost to see if perhaps you can re mortgage your u.k. house to the limit releasing funds to use in oz and not paying any tax on income from the u.k. although i believe you will have to pay full capital gains on the u.k. property if you buy one in oz as you are only allowed in either country one main property without incurring c.g.t. there is a double taxation agreement between u.k. an oz i would seek specialist advice though,as free advice is usually only worth what it cost's.

PJA

We thought about it but the rent the agency suggested didn't even cover our mortgage and then they said they doubted it would rent straight away! So we dismissed that idea! Now had it on the market for 6 weeks.

Jane

Fardell

We did just that and here are a few things to bear in mind;

1) If you do decide to mortage (or re-finance) your house in the UK do so before you arrive in Australia. UK banks will be concerned about your ability to meet the mortgage - since your employment income will be in AUD and they will discount any UK rental income to a lesser or greater degree. Getting a UK mortgage while in Australia is a frustrating experience, and that's putting it lightly.

2) It means two tax returns every year - once resident in Australia you will be taxed on world wide income, including rental income in the UK. You will get a credit for any tax paid in the UK.

3) In all liklelihood having a mortgage commitment in the UK will reduce your capacity to borrow in Australia. AKA the UK banks, the Australian banks will usually take your mortgage payments off your income in Australia, for calculating loan capacity, and not give full consideration for any rental income.

4) Managing a rental property half a world away is not easy - it depends largely on how good your agent is!!

On balance, we think the decision to retain a property in the UK was the right one, but it's not for everyone and it's not a simple analysis. Also, if you are keeping it because you want a bolt hole in case things don't work out ... well, there are arguments for and against in terms of whether it hinders you settling in.

232Bar

We did (very) briefly think about renting our place out in the UK, but as the previous poster has said, i think it gives you an 'easy' option to quit if things don't go to your plan when you get to Oz. If you have no 'easy return' then you'd be more inclined to make a go of it here. Fortunately we haven't ended up in the "we hate it here and want to go back" camp as some have done (and that's not a dig at them, just a statement of fact) so it is a moot point anyway, but we decided selling and using the profit we made in the UK to give us a good deposit over here, which has worked out well as we just bought our Aussie house last week

thribble

We have kept ours. So far we're renting in Oz to save up the deposit for buying, so haven't got experience of what actually happens.
The main bugs so far have been communications - for example, the estate agent we're using in the UK forgetting the time difference and ringing at 4am! I await with interest our tax-form experiences.
We kept it because we didn't want to get off the property ladder in the UK - we're not planning on going back, but we both have family-related situations that could arise in which we have no choice. As long as the mortage is covered in the UK, and we're not crippled over here, I'll suck up the paperwork and just do it. But that's not for everyone!

Tumbleweed

I would think very carefully about tenants it only takes one bad one to wreck the house or stop paying rent. do you really want the hassle when you're trying to start a new life here?

jamesegrant

Many Thanks for the feedback and guidance from everyone - useful information..

You are right about tentas as we once had a flat in London when we moved back to Scotland and had that experience with the tenants from hell and the agent not too far behind them

Where we are (Aberdeen), my Brother in law is a solicitor who's firm woudl deal with the tenancy no problem. My concerns were more on the mortagage situtaion I guess in terms of haveing a UK one and an Oz one - maybe trying to have our cake and eat it!

Cheers

James