charlie brown

just need a little help deciding we just keep going round and round should we shouldn't we thing for weeks , just getting a bit confused now , do they relay wreck you house or not

haggis supper

We decided to rent our house, primarily as we're on a 4 year visa and my wife was uncertain as to whether we would settle and wanted to security of keeping the house. One year on we're very settled and feel it's unlikely that we'll go back to the UK. However we've had a year of rental income that is currently more than the mortgage and other associated bills. It seems to make sense to keep it for the time being. I'd prefer to sell but Mrs Haggis wants to keep. When/if we go for PR then we may decide to sell and bring the money over here which will allow us to buy here.

The estate agents feel that it's in a good area/village (also Hampshire) and there should always be demand if we do continue, though I do have to accept there may be periods when it sits empty. We also still have several good friends in our village who keep an eye on the place !

If you get a good agent you should get some good advice. I can thoroughly recommend the firm we're using - McCarthy Holden. Think they are based in Fleet. Ask for Hilary.

Also worth getting a decent accountant to help with the tax return !

Good luck.

Downies

Some down sides:

Mortgage - your current mortgage might not allow you to let out property so may have to re-mortgage to a buy-to-let one.

Safety Docs - you will be responsible for getting landlord safety certificates for Gas, hear rumours may introduce them for electricity also.

Next year introducing house sellers packs - this will be an extra cost and burden paperwork wise, do you need it when on the other side of the world?

Tax - not sure on how much this will affect you, but I am sure you have a specific time period on when you can transfer the money over if perm resident in oz - have also heard you will be taxed on the increase in value of property between moving to oz and when you actually sell it.

Tenants - there are some major knightmares out there!! Even dealing with a reputable agency can not cover you for the fact that some people are not nice!

Insurance - as you will not be resident you will need to take out special cover.

Mind you, am a little biased - we have made the decision to sell - want to take the full equity to Oz to get as small a mortgage as possible when we land and we feel then that we will be making a huge commitment and it deserves our full 100% effort.

Good luck with what ever decision you make - main thing get lots and lots of professional advice from both sides of the pond so to speak.

Paula

haggis supper

Paula makes some good observations. Re the mortgage, we simply informed The Woolwich who just required written advice and they confirmed that they had no objections. Safety docs are required. Easy to obtain though.

You have to pay tax on the rental income, however you can offset this with your tax allowance, the cost of the interest on your mortgage, any associated costs, repairs etc, and our accountant suggested we claim the cost of 2 flights home each year to inspect the property ! All in all we've been able to reduce our tax liability to zero.

Re tax on the funds you receive when you sell at some point in the future, you need to provide the Aus Tax Authorities with the value of the house the day you became an Australian tax resident. You will be taxed on the difference from this and the price you sell at. We've been advised to find a sympathetic valuer in the UK to perhaps mildly inflate the possible value of our house so that any increase when we do sell will be marginal.

We have specific insurance but not too bad - only £230 per year.

And as Paula also says - get some good advice in Oz and the UK !!

Sun n Surf

Hi we are also in Hampshire and looked into this really deeply. We were initially going to rent the house out, but when we took the mortgage, agents fees, house insurance, tax and maintenance into account, we realised that it would actually cost us to rent it out (and that is assuming that we have it rented out continuously).

We realised that if we kept the equity in the bank for a year, then we would get about a £3k return. I don't advocate staying out of the property market for a long time (we won't) and obviously the UK property market will make you more money than the Oz market but you have to weigh it up for yourselves.

Basically we are giving it a try for a year and realised that us being out of the property market for one year would not be detrimental to us (assuming the UK doesn't have a massive boom this year) and that we would be free to buy a property sooner in Oz or just buy one if we returned to the UK. We would have been selling the house in the Uk to move to a bigger one anyway so we didn't need it for security.

Another this to know is that you will get taxed capital gains tax if you keep your house in the UK and decide to sell it after 6 years and bring the money to Oz - it makes no difference if you haven't bought a house in Oz, they tax you capital gains after 6 years so sell before then. Obviously if you buy a house in Oz whilst you still have one in the UK then you will be taxed capital gains.

Good luck with your decision.

JAJ

This is an urban myth. There is no such thing as capital transfer tax.

charlie brown

thanks jaj was thinking of going to accountant in uk, but don't know if it would be of much help just want to get things sorted so we know what we are in for

SJR

Hi, My response would be pretty much the same as Mr & Mrs Haggis as we are in the same situation, only we've been here slightly less...almost 8 months. Initially for us it was a safety net and it was mainly me that wanted to keep it. Hubby wanted to sell, he was thinking boats with some of the money from the house! It's highly unlikely that we'll be going back to live but it seems to be a good investment as it's continuing to rise in value and we get £900 per month which means it more than pays for itself. So long as it's not causing us any hassle I think I'd want to keep it on. I have heard something about capital gains tax after 6 years but don't know the details or if there's a way around it. Sandra

JAJ

A UK accountant (most of them anyway) won't know anything about Australian tax issues. And even though there's no such thing as capital transfer tax, you do have to consider income tax and capital gains tax.

Tax should not be your only consideration.

charlie brown

will the oz tax people be able to give me info if i contact them direct,

SJR

I was told recently that Oz/UK have some kind of agreement with the tax situation. That is, you can either declare your rental income here or back home. The accountant I spoke to here did specifically ask me for details of our mortgage and also rental income in the UK.

Bix

Personal opinion - sell.

Every hassle we've had since being here has related to having a UK property.
We tried to sell but couldn't so rented. Had to move when we did because of the job.

charlie brown

thanks bix , i think we may have to flip a coin , but do we do best out of three if we don't like the first toss

Sun n Surf

Contact the Austalian tax authorities, they couldn't have been more helpful to us and even offered to ring us back to save us spending money on the phone call. They gave us advise about tax if we were renting the UK property out and also if we sold it and bought the money over.

Bix

Best of five ?

We had a good tennant so that was okay.
It's the hassle of keeping bills paid, unforseen costs, worry about the house and loadsa forms to fill out.....tax.....again and again.
Stops us buying this end too so in rentals for the first time.....and that's an eye opener.

Now trying to sell and it's been murder.