AusDream

I know its probably an age old Q but heres my thoughts and welcome peoples comments.

Have a £300k house with £110 mortgage. Going out on a 457 for 2 years initially (may stay if love it but really no idea at present time). If we come back after 2 years, hows the figures stack up?

1. Sell the House

Put £190k in bank, earn 3.75% (after tax) over 2 years = c£14k
Less the estate agent leech costs at c£5k leaves c£9k

2. Rent it Out

House price increases by say 5% p.a. gives +c£30k
Tenant pretty much covers mortgage and agent fees
Risk tenant does the dirty - worst case say £10k
Net is +£20k

Am I missing something?

Thanks All

medwaymark

Tax on rental income?

on a mission

Tax on capital gains if bringing into Aus,

Buzzy--Bee

Not in Oz on a 457 to my knowledge.

Might get taxed in the UK.

Buzzy

AusDream

thanks for comments.........decisions, decisions...never knew be quite so tricky

Jasonmb

Hi

We are in a similar situation, we are hoping to go out on a 457, initially for 2 years and see how it goes, if we love it, hope we can stay, if not we can come home.

We have been looking at our options and have decided that it is in our best interest to rent out our home. We have been advised that we can rent on an Assured Shorthold Tenancy for a minimum period of six calendar months either Furnished or Unfurnished. A bond of approximately £100-£200 more than the rent would be payable by the Tenant at the outset of the tenancy. This Bond will be protected in a Government-authorised deposit scheme and the bond would be deposited into the custodial scheme run by the Deposit Protection Service (DPS).

Most companies have advised that they charge 10 % plus VAT per calendar month for managing the let and this will be deducted from the monthly income received.

Their are some really good Buy to let mortgage products on the market and we would need to ensure that the house is adequately insured and it is essential that before the property is let, a gas safety check has to be completed by a Corgi registered contractor and a Landlords Gas Safety Certificate provided.

Apparently rental income is taxable and is classed as unearned income, but the expenses of the letting can be offset against this. In the case of Landlords who are resident overseas, the regulations require the agent to deduct and account to the Inland Revenue for tax at the base rate of Income Tax from the net income received, unless you have written approval from the Inland Revenue to receive rent with no tax deducted.

You may already be aware of some of this, if not hope some of it helps

Jason

Alan-

Leaving out the financial aspect:

We rented our house out in Halifax while we moved to Cambridge.

I know it made financial sense, but couldn't wait to get rid once we'd moved as it was just another thing to think about in our past instead, of concentrating on the present and future.

IMHO, enough to think about with a new life in OZ without thinking about a house you might never see again back in the UK ???

Alan.

Jasonmb

Hi Alan

We are at Northowram Green, where were you?

Hopefully we will be in the same situation and be desperate to get rid of our house, but as a 457 is only a temporary visa with no guarantees, it would be too much of a risk to sell up for us. Personally if it didn't work out in Australia, we would struggle to get back to where we are now here in the UK. At least by renting we can keep all our options open

Jason

Famous 5

We kept our house in London and rented it out because we took a similar view that if things did not work out in Oz we would like to have a house to go back to rather than struggle to get back to the same position on the property ladder.

We have been in Oz a year and so far have not regretted holding on to the house in the UK. We let the house on a corporate let for a year and have just agreed to renew for a further year. I think it is important to choose your managing agents carefully and be comfortable with them and the service they provide. We took recommendations from friends who had rented out their home on a number of occasions when they had gone abroad with work.

As a previous poster said there are lots legal and tax issues to consider, but your managing agents should be able to give you advice on the basics. For example, our managing agents arranged our gas and electric safety checks and provided us with a checklist about what we needed to do before we let the property. You should check the Inland Revenue website as it has some helpful information too.

We are renting in Oz and because we have an appreciating asset in the UK, we don't feel under pressure to buy. This has been a bonus as we don't feel tied and we are unlikely to rush into buying for some time yet. Even when we do, we probably won't sell up in the UK but will release some of our equity in the UK to reduce the mortgage we would need here.

Best of luck with whatever you decide.

renth

Put the 190 grand Stirling in an Aussie bank and earn 6.8% = $60,000 interest over 2 years. You'll have to pay tax on it though. Maybe open the acc in your Mrs' name if she isn't working.

Not selling you risk the house price going down too.

russell

hi renth in the same position about selling or renting who gives you 6.8% on savings
russ

renth

Bank West Telenet Saver Account

www.abetterdeal.com.au

russell

thanks a lot renth
russ

Alan-

We built and lived in a few houses around the Siddal area, as well as Holywell Green.

Fortune favours the brave as they say. To me, going to OZ with a fall back safety net back in the UK has the ring of a defeatest attitude before you go, and is more likely to make a move back more easy, and therefore likely.

I can understand why folks do it, .....it would be interesting to know how many kept homes in the UK and went back to them, as opposed to burning all their bridges and staying ????

Alan.

brendan d

Hi, we are in a similiar position, however we have decided to sell, so that the temptation to come home wont be there, when we hit a bad patch.
We will be in a position to take £110k stg with us. will i get taxed on this in oz? Any advice on the best way to bank this. We are going to Bunbury, south of Perth
Brendan, cath & family