Platten81 Posted April 16, 2014 Share Posted April 16, 2014 Hi all. just had a chat with my prospective employer in perth. My salary will gross approx $83000 per annum. I can supplement my income with the rental from our uk property which will be a further $12000 per annum. Just wondering if this is a reasonable sum for a family of four (2 adults, 2 kids aged 7 and 5). Also, what tax would I pay on my income from my rental property? I will be on a 457 visa to start with and in rental accommodation. The job is in canning vale so any tips on where to live? Also any breakdown of approx outgoings would be massively appreciated. Hope someone can help! cheers Link to comment Share on other sites More sharing options...
Rupert Posted April 16, 2014 Share Posted April 16, 2014 We could all give you comparisons, some will think this is fine and others will think it is very tight. Unfortunately the people that think it is going to be tight might not comment because it usually ends up in a barrage of abuse about how there must be something wrong with them if they cannot live well on $X and why they spend so much on food. So the only comparison that matters is yours and your comparison to what you live on now. I will stick my neck out today and say that I would not even consider making this move on that salary, especially on a 457 visa with a family to Perth. But it honestly doesn't matter what I would do, only you matter, where do you live in the UK now and what is the household income? We can certainly tell you whether you would be faring better, worse or much the same. You can check tax on www,paycalculator.com.au. The advantage of being a 457 visa holder is that you don't need to declare your rental income in Australia so it will probably fall below your allowance in UK and therefore be tax free. If you got a permanent visa then you would pay tax on the rental income at your top rate. Link to comment Share on other sites More sharing options...
Quoll Posted April 16, 2014 Share Posted April 16, 2014 I would agree with Rupert, it won't be a life of luxury by any means. You're going to need to add in about $10k for two kids' education in Government schools too as a temp resident, along with the double whammy of no benefits. Also, check that that gross doesn't include superannuation - sometimes they give you the "package" figure to make it seem better than it may actually be. Link to comment Share on other sites More sharing options...
Platten81 Posted April 16, 2014 Author Share Posted April 16, 2014 We could all give you comparisons, some will think this is fine and others will think it is very tight. Unfortunately the people that think it is going to be tight might not comment because it usually ends up in a barrage of abuse about how there must be something wrong with them if they cannot live well on $X and why they spend so much on food. So the only comparison that matters is yours and your comparison to what you live on now. I will stick my neck out today and say that I would not even consider making this move on that salary, especially on a 457 visa with a family to Perth. But it honestly doesn't matter what I would do, only you matter, where do you live in the UK now and what is the household income? We can certainly tell you whether you would be faring better, worse or much the same. You can check tax on www,paycalculator.com.au. The advantage of being a 457 visa holder is that you don't need to declare your rental income in Australia so it will probably fall below your allowance in UK and therefore be tax free. If you got a permanent visa then you would pay tax on the rental income at your top rate. Hi, hi and thanks for your reply. Current household income is approx £42000. We live in York and just manage to get by week by week. Apart from mortgage we have no debt to speak of except for the overdraft of a couple of hundred quid! We really want the move to work but won't do it to be worse off. My prospective employer might assist with school fees so we'll have to wait and see. thanks again for your honesty and help Link to comment Share on other sites More sharing options...
Platten81 Posted April 16, 2014 Author Share Posted April 16, 2014 Sorry, meant to add that my gross salary doesn't include superannuation. Cheers Link to comment Share on other sites More sharing options...
Rupert Posted April 16, 2014 Share Posted April 16, 2014 Hi, hi and thanks for your reply. Current household income is approx £42000. We live in York and just manage to get by week by week. Apart from mortgage we have no debt to speak of except for the overdraft of a couple of hundred quid! We really want the move to work but won't do it to be worse off. My prospective employer might assist with school fees so we'll have to wait and see.thanks again for your honesty and help Ok so on £42k in north of England, then you will, I think, feel the pinch in Perth on $85k. Not utterly out of the ball park, but a tight pinch. That is if your employer does pick up school fees, if they don't then it gets worse obviously. Would you have a second income as that would make a big difference? If no second income, you would have to weigh up whether the life experience of living overseas worth the sacrifice in disposable income. We are in a lesser financial position for that very reason, so I guess we would say that we currently think it is worth it. Having said that, we are a couple and both earning good income so it is not a question of just getting by. Link to comment Share on other sites More sharing options...
VERYSTORMY Posted April 17, 2014 Share Posted April 17, 2014 It is liveable. Purerly from a financial point of view i would say you are going to be slightly worse off, particularly as the school fees will eat most of the UK income. You will also be taxed as a non resident - higher. Link to comment Share on other sites More sharing options...
Platten81 Posted April 17, 2014 Author Share Posted April 17, 2014 It is liveable. Purerly from a financial point of view i would say you are going to be slightly worse off, particularly as the school fees will eat most of the UK income. You will also be taxed as a non resident - higher. Do you know what the higher tax bracket is? Would I be better off applying for a 186 pr visa? i heard that this then makes my income from my uk property taxable. Is this true? cheers Link to comment Share on other sites More sharing options...
Gbye grey sky Posted April 17, 2014 Share Posted April 17, 2014 Do you know what the higher tax bracket is? Would I be better off applying for a 186 pr visa?i heard that this then makes my income from my uk property taxable. Is this true? cheers If you are in Aus as a PR then the rental income will be taxable in Australia I understand. You mentioned that the property is mortgaged (mortgage interest is deductible) and there will be other costs (agent fees, repairs, insurance etc) so you probably need to look at what the actual taxable profit will be on the UK rental. You may find that it is just covering the costs so little or no tax is due anyway. You did mention $12,000pa from the rental, is this profit or gross income? Link to comment Share on other sites More sharing options...
Alan Collett Posted April 17, 2014 Share Posted April 17, 2014 No tax in Australia on your UK rental income while you are a tax resident holding a 457 visa. Little or no tax in the UK either due to the availability of the UK Personal Allowance to non resident UK citizens - at the moment: keep a watch on the UK Government consultation which is discussing the withdrawal of the PA for non residents effective from 2015/16. Best regards. Link to comment Share on other sites More sharing options...
Rupert Posted April 17, 2014 Share Posted April 17, 2014 Do you know what the higher tax bracket is? Would I be better off applying for a 186 pr visa?i heard that this then makes my income from my uk property taxable. Is this true? cheers You won't be taxed as a non resident just because you are on a temporary visa, tax status and visa status are not same thing. Yes as I said above, if you are PR your overseas income all becomes taxable in Australia. Presumably it would be less than two lots of school fees however, so has to be worth it. Link to comment Share on other sites More sharing options...
elizabethkolo Posted April 17, 2014 Share Posted April 17, 2014 As your kids would be in school and not require childcare, would your partner work? Would you be looking to go to Perth just for a couple of years or something more permanent? PR might be a better option for the reasons other people have said (tax, schooling costs, etc). Canning Vale is a lovely area, as are the surrounding suburbs. I would live there again in a second, and it's a great place for a young family. Link to comment Share on other sites More sharing options...
Platten81 Posted April 17, 2014 Author Share Posted April 17, 2014 If you are in Aus as a PR then the rental income will be taxable in Australia I understand. You mentioned that the property is mortgaged (mortgage interest is deductible) and there will be other costs (agent fees, repairs, insurance etc) so you probably need to look at what the actual taxable profit will be on the UK rental. You may find that it is just covering the costs so little or no tax is due anyway. You did mention $12,000pa from the rental, is this profit or gross income? Hi. The property I live in is currently taxed but I would downsize it anf buy a property to rent out. I could do this and be mortgage free. I would sell that property if/when I got property and use the cash (approx £170000) towards a house in perth. Don't know if this makes any difference to how we would manage Link to comment Share on other sites More sharing options...
Gbye grey sky Posted April 17, 2014 Share Posted April 17, 2014 Hi. The property I live in is currently taxed but I would downsize it anf buy a property to rent out. I could do this and be mortgage free. I would sell that property if/when I got property and use the cash (approx £170000) towards a house in perth. Don't know if this makes any difference to how we would manage I have read this a few times but not sure I understand it so am guessing that there are some typos. Do you mean that your current home is mortgaged and that you plan to sell it and buy a UK investment property without a mortgage and then rent it out to generate UK income and for income whilst in Oz. Then sell it when you have got PR to put towards a house in Perth. Link to comment Share on other sites More sharing options...
Gbye grey sky Posted April 17, 2014 Share Posted April 17, 2014 I would think carefully about buying a property in the UK purely to generate rental income. Buying and selling property short term incurs fees that you are unlikely to recoup. As Alan says it is looking likely that non-residents may lose the PA next year making the rental income taxable at 20%. Work out the Return on Investment (ROI) buying the property and receiving regular rent after all expenses and then factor in 20% tax. Link to comment Share on other sites More sharing options...
Rupert Posted April 17, 2014 Share Posted April 17, 2014 Hi. The property I live in is currently taxed but I would downsize it anf buy a property to rent out. I could do this and be mortgage free. I would sell that property if/when I got property and use the cash (approx £170000) towards a house in perth. Don't know if this makes any difference to how we would manage I also don't understand what you are saying there, but you seem to be suggesting you sell your current house, buy a smaller one and rent it out? I also don't believe this is a good idea, the selling fees, potential for loss perhaps would surely negate the difference between putting the money on a high interest deposit account versus rental income. If you are going to sell, sell and keep the funds liquid. Or just rent out what you have. Link to comment Share on other sites More sharing options...
Platten81 Posted April 18, 2014 Author Share Posted April 18, 2014 I also don't understand what you are saying there, but you seem to be suggesting you sell your current house, buy a smaller one and rent it out? I also don't believe this is a good idea, the selling fees, potential for loss perhaps would surely negate the difference between putting the money on a high interest deposit account versus rental income. If you are going to sell, sell and keep the funds liquid. Or just rent out what you have. Sorry, had just finished a 14 hour shift at work when I wrote that last night! Looking at it again, you are right, it doesn't make much sense! But, yes, you have all managed to deduce what I meant. In that case I would look at just keeping liquid funds or rent out my current property and let someone else pay the mortgage. I'll look into it. cheers Link to comment Share on other sites More sharing options...
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