rabbie

Sorry if this sounds bullish, as I know many people are not in as such a fortunate position (I just got lucky), but if you had say approx. 200K GBP, and had a PR visa for Australia, what would you do?

a. Take the lot and exchange it at a very favourable rate and buy something when you were out there (Perth in our case, at least initially), living mortgage free.

b. Take the lot, rent for a while, get settled (job etc.) and get a mortgage for a percentage of a property. Use the rest to buy necessities like car, furniture etc.

c. Buy something rentable in the UK with a whacking big mortgage (£100,000 is big to me) and take the rest with you. And hence keep a foot in the UK housing market. Good escape plan if things don't turn out right.

If the answer is c. above then are there issues with having a mortgage in the UK and also one in Australia, if we decide to buy out there.

I know there are tax issues involved with owning a property when overseas etc., but I would appreciate help from genuine people who have probably been in a similar situation.

A financial advisor would obviously help, but I'm a bit cynical and reckon they have ulterior motives when advising.

Any views appreciated.

Cheers,

Rabbie.

wmoore

It depends on the type / size / location of property you are after but I think I would put down a hefty deposit (>50%), have a small mortgage and pay cash to fit out the house, buy the car, etc.
Then again, with that kind of money in your sky rocket, you could buy a decent property for cash and still buy all the necessities. As I said, it depends on your taste / needs.
I'm hoping to take about GBP 50k with me and buy a 'cheap' house for no more than GBP 125k, so I'll still have a chunky mortgage

Grayling

Rabbie
I am in a similar position but am unable to make up my mind
I also have an income from pensions etc. which means I am soon liable for higher rate tax before I even think about working.
When I am clearer about when I will move I will take professional advice.
If anyone has THE answer I would love to hear it.

G

mickj

Without a doubt, B is my final answer, and i don't even have to phone a friend, go 50/50, or ask the audience With that kind of "wonga", you can rent for a while and get all the stuff you need, and let the rest earn some interest in the bank, whilst there is something coming in from your job.

If things don't workout, then you can go back to england, and do the same.

rabbie

Sorry,

I have opted to ask the audience.

Still undecided myself between a. b. & c. although I must agree with you that b. seems to be the right answer. But at the moment will play out all my options before going for the £1million (coughs from the audience appreciated)

Cheers,

Rabbie.

ACE

Hi People,
Would appreciate you thoughts on the following scenarios.

Scenario 1- Take Redundancy in 2006:
Redundancy + equity on house £250 (after tax and debts paid)
stop pension etc
apply for job at sister company, re-start pension from scratch
starting wage $75K

Big lump sum to get started and earn interest on

Scenario 2-Accept relocation in 2006
house bought by company (equity £150)
job at sister company continue pension
starting wage $100K
rent paid for first 6 months
moving costs paid
% of mortgage paid for first 3 years on a sliding scale

Smaller lump sum but more secure

The big question is are the extras in scenario 2 worth the £100K in scenario 1, my husband and I differ on this point and we both keep changing our minds.

So people what would you do?

BTW we will both be in our early forties, our boys will be 3 and 10.

Kind Regards
ACE

Megalania

B. But hold the money in your company to keep tax at on interest at 30% not top personal rate of 47.5% + Medicare. Taxes on retained company profits come with attached tax credits of 30% when the profits are distributed. Most useful only if nearing or in retirement.

ABCDiamond

This option sounds interesting, but being a cautious person, I don't like the idea of any mortages.

How about a £100k house in UK, and a $250k house in OZ ?
Ok, Maybe a small mortgage so that you have funds left to buy the car etc.

Then, once you are settled, you sell the other property and buy something bigger ?

Personally though, i'd spend it all on one house here in Brisbane But then again, I am well and truly settled now

ACE

Hi Megs,
Was this answer directed at Rabbie or me?

The company I refer to in my post is the multi national my hubby works for not our own company.

If I have got it wrong please ignore this and accept my appologies

Kind Regards
ACE

Kiwipaul

b seems to be the best option in my opinion, with a wrinkle. Keep the money in cash in either the UK or Oz and find out wether you like it in Oz and can make a go of it with a job etc.

If you do find you enjoy Oz then buy a house without a mortagage and just enjoy the lifestyle.

BIG disadvantage of buying in WA is the high stamp duty and if you find it dosn't work out after 6 months you might make a loss with house infalation pretty flat.

Vegemite Kids

Either B or C in my opinion. Def not A - dont buy straight away, wait 6 months to get a feel for different areas and know where your job will be based. (bit unsettling for any kids I know, but better than making a huge property mistake) Perth is sprawling and you really dont want to buy in the north is you're working in the south.

One of the downsides of C as you rightly say is the tax issues.

Back in 2000 we bought a house in South Africa and currently have it rented out for the next 2 years, and to be honest even aside from the tax issues its it is a bit of a pain trying to deal with everything from a distance.

When renting out a foreign property aside from tax issues you have to consider how you will handle maintenance and repairs, general upkeep, what to do with the rental income (keep it in UK, put offshore, transfer to OZ), will family help you find rentees or will you use a rental management company, what will you do if you dont have tenants for a few months, how will you handle bad tenant problems eg. non-payment of rent, tenants trashing the place etc... The list goes on, and while hopefully you wont have some of these problems you still have to plan for them. Also for someone to have Power of Attorney for you, that can quickly deal with any legal issues.

If you can handle that then C could be a good option for you for the next few years just to give you the feeling of an escape plan being in place, but then consider that if your property is rented out, and you want to go back to UK, you cant sell it or move into it yourselves until the tenncy agreement is up.

There is nothing in OZ legislation that stops you having morgages in 2 countries. Basically as long as you have the money they will give you a morgage even if you have one in a foreign country already.

For a personal point of view, I think we will get rid of our S.Afr property in the next few years, just to get rid of the hassle and make our tax returns easier. Plus it will free up some more money for building our house here

Megalania

Incorporate. Your company can pay dividends or wages according to legal tax minimisation.

ianj

Mine is B.

I am selling my house, transferring all the money and then when I get to Melbourne I am going to do a house share in Melbourne. I have the bonus of being single so I do not need to rent straight away as I have no family or kids to consider....just me.

My thought is that with a house share I can get to know more people quicker and get a decent social circle going (which from what I have read is important). All being well I will get introduced to my house mates friends, their friends etc and be out for beers and stuff. Couple that with getting a job and meeting new people via that I hope to settle in rather quickly.

I will save money as I wont have to spend as much as others having to rent and I can then scope out the best areas to live in slow time before I commit to buying. All my stuff from my house will be in storage for a while (excpet the stuff I cherry pick when it goes through customs / inspection) before it goes into storage.

So that begs the next question..........I hope to have about A$130K or so that I will be looking to put somewhere I can gain some interest on but not be tied into for a year etc. Not instant access to it but may 30 / 90 days access or whatever.

Anybody in Oz got any ideas as to the best way. When I get there permanently I will be sorting out my whole investment portfolio properly again (once I have a job etc, know my income and the like).

Megalania

Yield curve flat. 5.25% for cash.

ianj

Excuse my ignorance but can you explain how

Yield Curve Flat works mate.