Bella

Anyone been through the big debate as to whether to sell or rent their property in UK? I've been through it a billion times and am interested in others' thoughts, particularly if you've thought of something I haven't.

House sale just fallen through and just wanna go ...!

arg

I suppose itll depend on how a rental agent handles things. Some on them dont even chase for non paid rents (they assume its the landlords duty!) Then theres always the scenario of the tenant trashing the place. It could cost you more than you get in rent. I certainly wouldnt offer long term let, just say 6 months at a time with the property still for sale.

karlos

I think it depends on your personal circumstances. We are choosing not to sell our house, but then we bought this property with a view to not selling it (for a good number of years) wherever we moved to, be it Aus or within the UK.

Good luck with which ever route you choose.

Regards
Karl.

PeteY

If you can afford to not sell your house over here it would be a VERY wise thing to do.

As far as i can see, there are 3 main advantages.

1) You will have an income from the rent
2) You have somewhere to come back to if it does'nt work out in Oz.
3) After 5 years in oz any capital you gain from either sale of the property or form rental income is tax free (from the Uk gov't at least)

Pete.

Slater

We havn't got the go ahead yet, but we puts our bungalow on sale last friday, depends where you live I suppose, but property prices in our area have definately peaked.

Slater. (Sussex)

kevmitch

We're in the same boat. I keep wavering between selling and renting - and the closer we get to an actual date, the more difficult the decision becomes.

I've tried to summarise the key factors:

- How long are we likely to rent for in Australia. At this stage I would guess at least 6 months, more like 12 until we decide where to live.

- What are the costs associated with selling v renting out our house in the UK?

- What is the market like for selling/renting where we live.

- Where are we likely to get the greatest capital growth? - at the moment Australia looks a better bet, but then if the UK decides to go for the Euro in the next 2 to 3 years, economists are predicting a surge in UK house prices of up to 50% (lower Eurozone interest rates)

- Do we need any of the capital tied up in the house during the first 12 months?

- Would we need a mortgage in Australia - and how long would it take us to establish a financial history to enable us to get one?

- what will be the 'emotional' impact of having no permanent home?

Having said all that, it may ultimately come down to market factors. Can we actually sell our house for anything like the valuation figure?

Can anyone throw any light on the subject?


Kev

Dinky

Guys,
Remember the theory.

1. Any overseas rental income will have to be declared in your Aussie tax return.

2. Any gain either in value or from exchange rate movements on selling will need to be declared in your Aussie tax return.

Above £60,000 odd tax is at 47.5%

Dinky

P.S.Would be interested to hear from anybody who understands the "theory" and how they put it into practice.

Alan Collett

Be careful with capital gains tax Pete ... if you sell a UK investment property when you are living in Australia you would be subject to Aussie tax on the gain that has arisen since the date of your arrival, less a 50% discount if you have retained the property for more than 12 months since your arrival in Australia (tax tip - get a valuation of your property as at the date of your arrival in Australia from a qualified valuer that is bullish as to the expected sale price).

Also, be aware of income tax (in the UK and Australia), the need to obtain clearance from the UK Inland Revenue if you want your rental income paid to you on a gross basis (ie with no tax deducted - complete and lodge form NRL1 with the tax office), inheritance tax, and withholding tax in Australia if you are going to maintain a mortgage.

Best regards.

karawara88

If you are going to use rental agent, ask them to supply names and phone numbers of clients who are happy with there work.

Most of them are a shower of no good money grabbing sharks, and if they know you are out of the country they seem to be worse.

I have had dealings with a few of them and even (for this area) a prestige agent was a complete waste of space.

If you have family that can do things for you so much the better. Get a solicitor to draw you up a rental agreement and do it privately.

Bella

Thanks everyone for your thoughts. Much appreciated.

I do err on the side of selling but go through anxieties sometimes cos it's a big deal.

Bella

DavidT

TRY this web site, you can even pursue tennants for un paid rent, criminal damage etc. The policy covers you for this.
www.easylet.org.uk is the landlords insurance company. the policy can be bought direct for a fraction of what the letting agencies charge. I would pay a friend to nip in once a month rather than pay a company that does absolutely nothing.
Have a list of prefered handy men who are able to agree an hourly rate with you before you go, then get plumbing & electrical cover with someone like B Gas or even a professional organisation

debsy

Pete
Can you tell me where I can find info regarding point 3 of your reply. I am currently non resident and I have a house which was rented and I intend to sell before I go to Australia. I have been overseas (not in Australia) for past ten years.

Thanks

Kiwipaul

Something to bear in mind regarding 3) if you sell the property whilst in Australia you are liable for capital gain tax in Australia , even if the property is not in Australia.

BUT if you own the property (or any asset) before you arrive in and stay in Australia LESS than 5 years you won't be charged CGT on this asset by Australia so long as you DON'T sell it. If you stay in Australia 6 years and then leave the Australian gov assess you for CGT on this asset even if you don't sell it.

This is good if you want to come here for a couple of years but keep your options open with property in UK. But strongly rec you take prof advise if you go this way.

chippy

One point nobody seems to have mentioned. It may be relevant or you may think its crap.

If you rent out your house in the UK you always have a 'bridge' back home, in that you would have a house to go back to, should you decide to return.
Psycologically this could prompt you to return home, (if things were tough in Oz or whatever) sooner than you may otherwise would have done if you had severed all material links with the UK.

I don't want to make things hard for myself, but on the other hand when I do get there I want to give it my best shot with the intention of staying permenantly. If I gave myself an easy route back, so to speak, I'm afraid I my not give it my best.

karawara88

Chippy your point is very relavant, and Psycologically it is a big draw when things get rough. But on the other hand its a saftey net.

I agree with you because last time I went coming back was made a lot easier because I had property here. Maybe I would have re-considered had I had nothing to come back to.

This time however I have sold my main property and have a smaller property, let. Having the property gives me great piece of mind knowing I have an income, and that I have a way back and not lost foot on the property ladder.

So I guess that I am stuck between the two arguments for and against.

Part of me would like to sell everything and go for it. But my sensible head says keep all options open.

I appreciate that I am in a fortunate position to have these choices, so for those of you with the one property, my personal choice would be, if you dont need the money from your property, rent it for six months and see how you feel further down the line. After all circumstances may dictate you return. Ie not being able to get work etc. etc. Which brings us back to Chippy's post saying it could have the effect of bringing you back. ! Best go for a lie down.