Renting house in UK, doesn't cover the mortgage !!
#1
BE Enthusiast
Thread Starter
Joined: Jun 2007
Location: The "Gong"
Posts: 433
Renting house in UK, doesn't cover the mortgage !!
Looking to move out to Aus during 08, and have had our house valued for rental
Mortgage £970 per month
Rental valuation £900 per month
Estate Agents cut 10% +VAT
So effectively we will be £170 down on mortgage payments.
I think i read somewhere about being to offset your tax against losses made.
Could someone explain how this works ?
Thanks
Stu
Mortgage £970 per month
Rental valuation £900 per month
Estate Agents cut 10% +VAT
So effectively we will be £170 down on mortgage payments.
I think i read somewhere about being to offset your tax against losses made.
Could someone explain how this works ?
Thanks
Stu
#2
BE Forum Addict
Joined: Oct 2006
Location: Brisbane
Posts: 1,492
Re: Renting house in UK, doesn't cover the mortgage !!
Looking to move out to Aus during 08, and have had our house valued for rental
Mortgage £970 per month
Rental valuation £900 per month
Estate Agents cut 10% +VAT
So effectively we will be £170 down on mortgage payments.
I think i read somewhere about being to offset your tax against losses made.
Could someone explain how this works ?
Thanks
Stu
Mortgage £970 per month
Rental valuation £900 per month
Estate Agents cut 10% +VAT
So effectively we will be £170 down on mortgage payments.
I think i read somewhere about being to offset your tax against losses made.
Could someone explain how this works ?
Thanks
Stu
Have you thought of changing your mortgage payments to interest only and maybe that way the costs will be covered? This is what we will be doing with ours as like yourself we would be out of pocket.
Debbie
#3
Forum Regular
Joined: Jan 2005
Posts: 82
Re: Renting house in UK, doesn't cover the mortgage !!
Looking to move out to Aus during 08, and have had our house valued for rental
Mortgage £970 per month
Rental valuation £900 per month
Estate Agents cut 10% +VAT
So effectively we will be £170 down on mortgage payments.
I think i read somewhere about being to offset your tax against losses made.
Could someone explain how this works ?
Thanks
Stu
Mortgage £970 per month
Rental valuation £900 per month
Estate Agents cut 10% +VAT
So effectively we will be £170 down on mortgage payments.
I think i read somewhere about being to offset your tax against losses made.
Could someone explain how this works ?
Thanks
Stu
#4
Re: Renting house in UK, doesn't cover the mortgage !!
Looking to move out to Aus during 08, and have had our house valued for rental
Mortgage £970 per month
Rental valuation £900 per month
Estate Agents cut 10% +VAT
So effectively we will be £170 down on mortgage payments.
I think i read somewhere about being to offset your tax against losses made.
Could someone explain how this works ?
Thanks
Stu
Mortgage £970 per month
Rental valuation £900 per month
Estate Agents cut 10% +VAT
So effectively we will be £170 down on mortgage payments.
I think i read somewhere about being to offset your tax against losses made.
Could someone explain how this works ?
Thanks
Stu
#5
Re: Renting house in UK, doesn't cover the mortgage !!
We have also just changed ours to interest only and looking at it as a short term thing until either the house sells or we get settled in Oz financially. We were paying £760 repayment and interest only has saved us £200. It means we have a bit to build up in the kitty from renting it out. We are also going to take a 6 month mortgage break 6 months down the line to build up some money in case the house is empty..if we have to rent long term (worse case scenario). As soon as we can sell we will!
#6
BE Enthusiast
Thread Starter
Joined: Jun 2007
Location: The "Gong"
Posts: 433
Re: Renting house in UK, doesn't cover the mortgage !!
Well we wanted to rent the house out for at least 4 years.
Our trip to Aus is based on a 457 Visa with a 4 year minimum commitment from ourselves. If we want to stay after that the job is permanent.
If thats the case we will probably sell the house.
Our trip to Aus is based on a 457 Visa with a 4 year minimum commitment from ourselves. If we want to stay after that the job is permanent.
If thats the case we will probably sell the house.
#7
Re: Renting house in UK, doesn't cover the mortgage !!
If things change and permanence becomes an option then we will look at it again, but our area is good for houses so the longer we can keep it the better the return of investment.
#8
Forum Regular
Joined: Apr 2007
Location: Toowoomba, Queensland
Posts: 136
Re: Renting house in UK, doesn't cover the mortgage !!
Income from property letting is classed as unearned income and subject to tax, same as any other (share dividends, stocks, pensions, etc).
It balances out at the end of the year when you submit your tax return. You work the figures so you make an overall loss from the rental. You may get a tax rebate, but I would doubt it as I did this for 12+ years. You have to take the hit for the loss, knowing you are getting the majority of your mortgage paid and your property is (hopefully) increasing in its equitable value.
The profit comes when you sell it.
There are several associated costs of letting, so you should speak with someone who has been doing this for a while. You can claim for many things too, to ensure you make that loss.
It balances out at the end of the year when you submit your tax return. You work the figures so you make an overall loss from the rental. You may get a tax rebate, but I would doubt it as I did this for 12+ years. You have to take the hit for the loss, knowing you are getting the majority of your mortgage paid and your property is (hopefully) increasing in its equitable value.
The profit comes when you sell it.
There are several associated costs of letting, so you should speak with someone who has been doing this for a while. You can claim for many things too, to ensure you make that loss.
#9
Re: Renting house in UK, doesn't cover the mortgage !!
Income from property letting is classed as unearned income and subject to tax, same as any other (share dividends, stocks, pensions, etc).
It balances out at the end of the year when you submit your tax return. You work the figures so you make an overall loss from the rental. You may get a tax rebate, but I would doubt it as I did this for 12+ years. You have to take the hit for the loss, knowing you are getting the majority of your mortgage paid and your property is (hopefully) increasing in its equitable value.
The profit comes when you sell it.
There are several associated costs of letting, so you should speak with someone who has been doing this for a while. You can claim for many things too, to ensure you make that loss.
It balances out at the end of the year when you submit your tax return. You work the figures so you make an overall loss from the rental. You may get a tax rebate, but I would doubt it as I did this for 12+ years. You have to take the hit for the loss, knowing you are getting the majority of your mortgage paid and your property is (hopefully) increasing in its equitable value.
The profit comes when you sell it.
There are several associated costs of letting, so you should speak with someone who has been doing this for a while. You can claim for many things too, to ensure you make that loss.
#10
Bitter and twisted
Joined: Dec 2003
Location: Upmarket
Posts: 17,503
Re: Renting house in UK, doesn't cover the mortgage !!
#12
Re: Renting house in UK, doesn't cover the mortgage !!
Looking to move out to Aus during 08, and have had our house valued for rental
Mortgage £970 per month
Rental valuation £900 per month
Estate Agents cut 10% +VAT
So effectively we will be £170 down on mortgage payments.
I think i read somewhere about being to offset your tax against losses made.
Could someone explain how this works ?
Thanks
Stu
Mortgage £970 per month
Rental valuation £900 per month
Estate Agents cut 10% +VAT
So effectively we will be £170 down on mortgage payments.
I think i read somewhere about being to offset your tax against losses made.
Could someone explain how this works ?
Thanks
Stu
We changed our mortgage to interest only just so that there would be some sort of profit in it.
#13
Re: Renting house in UK, doesn't cover the mortgage !!
Income from property letting is classed as unearned income and subject to tax, same as any other (share dividends, stocks, pensions, etc).
It balances out at the end of the year when you submit your tax return. You work the figures so you make an overall loss from the rental. You may get a tax rebate, but I would doubt it as I did this for 12+ years. You have to take the hit for the loss, knowing you are getting the majority of your mortgage paid and your property is (hopefully) increasing in its equitable value.
The profit comes when you sell it.
There are several associated costs of letting, so you should speak with someone who has been doing this for a while. You can claim for many things too, to ensure you make that loss.
It balances out at the end of the year when you submit your tax return. You work the figures so you make an overall loss from the rental. You may get a tax rebate, but I would doubt it as I did this for 12+ years. You have to take the hit for the loss, knowing you are getting the majority of your mortgage paid and your property is (hopefully) increasing in its equitable value.
The profit comes when you sell it.
There are several associated costs of letting, so you should speak with someone who has been doing this for a while. You can claim for many things too, to ensure you make that loss.
#14
Re: Renting house in UK, doesn't cover the mortgage !!
Are you sure about that?? You are treated no differently on a 457 Visa to any other Visa.......apart from the fact that you cant claim a lot of benefits. We came here on a 457 Visa and as far as I was aware ALL income was taxable (although obviously we decided our UK property wasn't ).
#15
Re: Renting house in UK, doesn't cover the mortgage !!
We also changed our mortgage to interest only and basically only just covered ourselves. We have not had a any tax issues (but then we were not making a profit). We have been totally honest in our returns with the tax office.
Our bank insisted that we could only have 6 month leases in place to continue on the existing mortgage, but that worked out fine with us.
We rented here for 2 years and have had no problems. We put the house up for sale in April and that is when all our problems started, our tenant moved out because she was worried she wouldn't find anywhere else and we could not get a new one as we would have had to sign a 6 month lease. The house has been empty since June, we have just sold but it is still in the processes and the amount of money we have lost on it is untrue - we are going to receive very little money form the sale now. Which we had budgeted on getting when we bought here with our huge temporary () mortgage - but hey such is life!
Sorry, had a bit of unloading to do there obviously - basically I just wanted to let you know where the pitfall for us was.
Endesleigh do a great landlords insurance.
Oh just another thought, we left our house in the hands of an agent and they were pretty pants, they failed to pay us twice and we had to hassle them for the money, also when we went back to the house in July last year, after the tenant had moved out the place was definitely not up to my idea of maintained - the tenant had used tbluetac on the walls and ripped the paper pulling stuff down, she had ahad a cable phone line instaled without our permission and they had used black wire all up the front of our white house, she had had token meters put in and had redecorated (not totally accurate!) one of the bedrooms, there was a line of cracked tile in the conservatory and the carpet up the stairs was absolutely filthy too - according to the agent that was all wear and tear and she got here deposit back Partly ruined our holiday having to deal with it all!
Nikki
x
Our bank insisted that we could only have 6 month leases in place to continue on the existing mortgage, but that worked out fine with us.
We rented here for 2 years and have had no problems. We put the house up for sale in April and that is when all our problems started, our tenant moved out because she was worried she wouldn't find anywhere else and we could not get a new one as we would have had to sign a 6 month lease. The house has been empty since June, we have just sold but it is still in the processes and the amount of money we have lost on it is untrue - we are going to receive very little money form the sale now. Which we had budgeted on getting when we bought here with our huge temporary () mortgage - but hey such is life!
Sorry, had a bit of unloading to do there obviously - basically I just wanted to let you know where the pitfall for us was.
Endesleigh do a great landlords insurance.
Oh just another thought, we left our house in the hands of an agent and they were pretty pants, they failed to pay us twice and we had to hassle them for the money, also when we went back to the house in July last year, after the tenant had moved out the place was definitely not up to my idea of maintained - the tenant had used tbluetac on the walls and ripped the paper pulling stuff down, she had ahad a cable phone line instaled without our permission and they had used black wire all up the front of our white house, she had had token meters put in and had redecorated (not totally accurate!) one of the bedrooms, there was a line of cracked tile in the conservatory and the carpet up the stairs was absolutely filthy too - according to the agent that was all wear and tear and she got here deposit back Partly ruined our holiday having to deal with it all!
Nikki
x