Property question
 

Hi All,

I'd like to know if anyone who has made the move to Canada has kept their property here in the UK as an ongoing investment? We've not looked into this yet but are there any financial (tax) implications?

We have a fairly small mortgage on our flat and we're considering renting it out.

Thanks in advance for any advice.

Re: Property question
 

No, we didn't, instead we invested in property in Nova Scotia and its far outreached the return we could have expected in the UK, and still climbing.

Re: Property question
 

iirc you have to declare the income in Canada but can claim the costs such as the mortgage payments. People I know who kept their UK properties but never moved back have done extremely well on them while others who sold cannot now regain what they one had. I would certainly keep the flat it if at all possible.

(This advice wouldn't apply of course if you moved to the El Dorado that is rural Nova Scotia).

Re: Property question
 

Nice one Ontheboatout,

You've done pretty well there - I guess it's down to timing.

I don't think we'll get that sort of return in Vancouver as property prices are fairly high already, however we'll still try buy property there but in my name (the current mortgage is in my wife's name).

Re: Property question
 

We're also going to do the same, not planning on letting go of our lovely UK home that is making us lots of money (£60k increase in value in past 6 months! :eek:) so we're going to rent it as well. Then we have it to come back to as well if we want to, don't want to have to struggle to get back on UK property ladder if we decide to return home at later date. So will be interested to see what replies you get.

We may well buy in Canada too if we like it there, so will do both. :)

Re: Property question
 

Cheers Christmasoompa, that mimics our thoughts entirely.

We can rent our property out for considerably more than our monthly payments and it would be a shame if it all goes t*ts up to have to get back on the ladder.

Re: Property question
 

It's good thinking but we would have never gone back to the UK whatever happened - rather Timbuktu, no disrespect to Timbuktuians. Aren't you worried about the US recession pulling the UK market down - it's pretty protected by China here.

Re: Property question
 

http://www.hmrc.gov.uk/cnr/faqs_general.htm#10nr

This gives a bit of guidance about tax on rental properties for non-uk residents - in Inland Revenue-speak though unfortunately :rofl:

Re: Property question
 

No, not worried at all as we only have a mortgage on a very small part of our property in the UK so it would have to lose over 400k in value for us to be in negative equity!! Even if the market dips (it certainly hasn't where we are yet, things are still selling quickly and for v high money) we'd still make money so it's a worthwhile investment for us.

And if we can buy in both countries then why not?? That way we cover both options and don't lose out. We're not planning on going to Canada forever anyway, just a few years, as we are perfectly happy with our lives here. But even if we were planning on emigrating permanently, I still wouldn't give up my UK property until I'd been there for a few years just in case we did change our minds and want to return home. Extra cautious perhaps!! :)

Re: Property question
 

Where we live in SW London, property is still at a premium. Flats especially sell very quickly and are currently priced at c. £450K for a 2 bed. Madness. We certainly can't afford to make the move up to a 3 bed terrace (in the same area) as you're looking at a minimum of £600K!!

I don't think the US economy is going to have that drastic effect on the UK - long term.

Re: Property question
 

You can nearly buy Nova Scotia for 600K - there's a big old house I've seen in New Glasgow for £20000! That means you could buy a whole street.

Re: Property question
 

Sounds as though your property market is about the same as ours - we're not too far from you in Buckinghamshire. Most things are selling here within 2 weeks and still at ridiculous prices. And sounds as though renting would be a very wise move for you too as you no doubt have a v desirable rental property. :)

Re: Property question
 

Exactly - so we get the best of both worlds and of both property markets but still have a foot on the UK property ladder if/when we want to return home. :)

P.S. $20k?? If the market in NS is rising as sharply as you say then how much was it worth a few years ago, $2k?!?:rofl:

Re: Property question
 

http://www.mls.ca/PropertyDetails.as...ertyID=6688441


I think it has been a rental hence it's price - it's ready for a refurb and 100% profit. One of our properties has gone up 77% since June and another 150% in 2 years. It's usual.

Re: Property question
 

Just to be clear, you think the property market in rural Nova Scotia outperforms that in London?

Re: Property question
 

Just wondered what on earth it would have been worth a few years ago if it's only worth £20k now!!

Sounds as though the NS property market is about as mad as ours here - and I thought the UK had the monopoly on crazy price increases but obviously not!

:)

Re: Property question
 

If so, I'll take the £400k profit that we've made on our house in the past 3 years and buy up half of NS! ;)

Re: Property question
 

Good grief! What are rental values like over there?

Re: Property question
 

It'll be some time before it gets near to UK prices!

A holiday rental in the summer rents for around £600/week (yes week!)

A house rental would be around £250-£500 a month. Antigonish much higher because of the University.

Re: Property question
 

I should add that Nova Scotians (no generalization then!) do not seem to appreciate older properties and pay a fortune for brand new.

That New Glasgow one looks to have original maple doors, probably hand-made, hardwood floors and oak panelling. It was probably a bankers or captains house. It may need a new roof but that is just around £1500 here. Furnace is new and it's on mains and sewer. If I had the spare cash...

Re: Property question
 

It really does depend on the area though.
We saw some lovely houses in Annapolis when we started looking 3 years ago, that are still on the market now, despite massive reductions in price. One in particular I loved has dropped from $210k to $150k and still hasn't sold.
Likewise up towards Sheet Harbour, houses we saw there for around $60K are still unsold. On the other hand, the house we bought in Halifax has gone up in value approx $90k in the last 2 years. As the realtors love to say, position, position, position.:rofl:
Going back to OP question - you have to declare on your Canadian tax form any propery you own overseas if it's value is more than C$100K, whether you rent it out or not.

Re: Property question
 

That is a great link. Thank you. I have shamelessly stolen it and used it as the basis of a short wiki article here outlining the tax implications of renting out a home in the UK whilst being a tax resident in Canada.

Re: Property question
 

This is not quite right. You have to declare specified foreign property with your tax return each year. This will include any income producing assets like a house that you rent out.

You do not need to report personal use property. This would include a house in the UK that you do not rent, but use as a holiday home when you visit.

Re: Property question
 

You might want to consider how you will be able to manage and maintain the property and significantly the tenants whilst you are out of the country. You might be leaving a big financial asset open to abuse in your absence.

Re: Property question
 

There are capital gains tax issues. You need to get your property fair market valued before you leave as you will be laible for canadian capital gains on any gain after you leave when you sell.

Re: Property question
 

Sorry but we were with the tax consultant on Monday, and on the form it specifically states that you have to declare any overseas property valued over $100k regardless of whether you rent it out or not. We have a house in France which we don't rent out as I use it for most of the year, but we still had to declare it for my OH's tax return here in NS. I know it's the first time we've had to do it, so maybe there were changes made during the last financial year.

Re: Property question
 

These are from the instructions on page two of T1135 (my emphasis):

What property do you have to report?

You only have to report property that is specified foreign property.
Specified foreign property includes:
* funds in foreign bank accounts;
* shares of Canadian corporations on deposit with a foreign broker;
* shares of non-resident corporations held by the resident filer or on deposit
with a Canadian or foreign broker;
* land and buildings located outside Canada, such as a foreign rental
property;
* precious metals, gold certificates, and futures held outside Canada;
* interests in mutual funds that are organized in a foreign jurisdiction;
* debts owed by non-resident persons, such as government or corporate
bonds, debentures, mortgages, and notes receivable;
* an interest in or a right to any specified foreign property;
* property that is convertible or that can be exchanged for a right to acquire
specified foreign property;
* an interest in a partnership where the share of income or loss of the
partnership for non-resident members is 90% or more and the partnership
holds specified foreign property;
* an interest in a non-resident trust or a non-resident trust deemed to be
resident by section 94 of the Act (discretionary trust);
* patents, copyrights or trademarks held outside Canada; and
* an interest in, or a right with respect to, an entity that is non-resident.

Specified foreign property does not include:
* property used or held exclusively in the course of carrying on an active
business;
* personal-use property (i.e., property used primarily for personal use and
enjoyment, such as a vacation property used primarily as a personal
residence);
* an interest in a U.S. Individual Retirement Account (IRA);
* shares of the capital stock, or indebtedness, of a non-resident corporation
that is a foreign affiliate;
* an interest in, or indebtedness, of a non-resident trust that is a foreign
affiliate;
* an interest in a non-resident trust that neither you nor a person related to
you had to pay for in any way;
* an interest in a non-resident trust principally providing superannuation,
pension, retirement or employee benefits primarily to non-resident
beneficiaries, that does not pay income tax in the taxing jurisdiction where it
is resident; or
* an interest in, or a right to acquire any of the above-noted excluded foreign
property.

The form is here. This is for Federal tax. Nova Scotia tax rules may be different, but this would surprise me.

Re: Property question
 

christmasoompa

In hindsight we should have kept our UK property when we moved to Canada. I ended up with a 50% bigger mortgage in Canada than when we left the UK. When we sold up after 8 years, our house in Canada it was only worth a third of what our UK house would be now. That's an issue I found buying a cheap house in rural Canada. I actually worked with a Brit who sold his house in the early 2000's at 60% of the build price he paid for it 10 years earlier. If we every returned to Canada I would buy a house in commuting distance of a major city i.e Ottawa/Toronto so not to lose on real estate assets.

I know expats who kept property in the UK for 25 year plus as an investment and safety net. I would keep you UK house and buy a second home in Canada if you can afford to.

Returning to the UK is easy. Managed to get a well paid job with company car, but having to move out of Oxfordshire to Kent to afford a decent sized house again.

hudd