Captain Roberto Posted February 12, 2015 Share Posted February 12, 2015 Hello We are renting our house out here in the UK when we move to Sydney in July. We have never rented out house out before wanted to get some knowledge before we choose an agent. Does anyone have any tips or knowledge? Things we wanted to know about: Managed property rental Tax issues (i.e. how much do we get taxed) or anything else we don't already know about. We are having new carpets and changing the windows that are single glazed to new double glazed units. We had a new boiler last summer, and we are redecorating throughout, so it's in a fairly optimal state when we rent it out. If anyone has tips, please let us know! Thanks in advance much love The Roberts Family. Quote Link to comment Share on other sites More sharing options...
Alaska Posted February 12, 2015 Share Posted February 12, 2015 We did it for years. We registered for self assessment and did all returns online using tax calc (you can't use the usual HMRC website I seem to remember). We filled in some form when we left so that we did our own taxes and tax wasn't taken out earlier. It means that you can then do all the deductions before you work out tax. Things like all your insurance, interest from mortgage, agents fees etc are all tax deductible. With the allowance we haven't paid any tax on the rentals since we left. We have had some great advice from GM Tax along the way even when doing them ourselves. This year coming though we will use them as it is very complicated as we became PR and sold 2 houses in the UK. Quote Link to comment Share on other sites More sharing options...
Captain Roberto Posted February 12, 2015 Author Share Posted February 12, 2015 Thanks @Alaska good tips Quote Link to comment Share on other sites More sharing options...
Captain Roberto Posted February 12, 2015 Author Share Posted February 12, 2015 @Alaska were you always able to rent your home out ok? There seems to be various levels of service - which take various amounts of interest. We are looking at managed ones, and one that does 'guaranteed rent (for a premium cut). ANy tips on what's the best way to do it? Quote Link to comment Share on other sites More sharing options...
Guest Posted February 12, 2015 Share Posted February 12, 2015 Absolutely go for fully managed if you are overseas, personally I wouldn't take a 'guaranteed rent' option unless you are reliant on the income to pay a mortgage, you are almost certain over time to lose money as these deals are offered at rates than ensure the agent doesn't lose out. Tax wise it is worth having an accountant familiar with both UK and Australian tax law - unless you have other UK income you will not pay tax in the UK if the profit is less than £10k (and that's after all expenses including mortgage interest - not capital repayments). You will in theory pay tax on profit in Australia but the allowances for depreciation are very generous so in reality you are likely to get a tax rebate rather than a bill. We had an absolutely horrendous time (lost about £10k) due to a rogue letting agent so be careful who you choose and I recommend a member of ARLA http://www.arla.co.uk/ We used Your Move after that and would be happy to recommend them to a friend We still use them now! Quote Link to comment Share on other sites More sharing options...
Captain Roberto Posted February 12, 2015 Author Share Posted February 12, 2015 @ladyrainicorn = great tips. thanks Yes, we are reliant on the income to pay the mortgage - we have another 10 years left to pay on the place. (we did have only 8 years and lower payments, but we had to get some equity out to afford to move to Australia...) 'Guaranteed rent' does look a bit of a rip off (they take want almost 1/3!) - but we could also end up in a tight spot if the place went empty. Houses on our street generally are in high demand, but we have never done this before. We can't afford to make big mistakes... decisiojns decisions. I'll look up those links thanks again. Quote Link to comment Share on other sites More sharing options...
Alaska Posted February 13, 2015 Share Posted February 13, 2015 My absolute top tip is to find a really good recommendation for an agent and do fully managed. We have dealt with some shockers in our time and actually found a really good small business to manage it whilst we were away and they were very proactive about letting us know any problems etc. Also it is worth getting some good recommendations in advance for contractors such as plumbers etc. The agents should have some anyway but good contractors are worth their weight in gold when you are a long way away. I can say this with authority as our rental (we bought to renovate in 2006 just before the market crashed and it went into negative equity) had some really serious problems with damp that took a long time and a lot of money to sort out. It was extremely stressful as you can imagine. Also negotiate with the agents regarding fees - you should be able to get them down a couple of % from their original quote. Regarding tax - you only need to declare the income in Aus if you are on a PR visa. We weren't at the time so didn't need to. Finally it isn't necessary for the faint hearted. We went a while with no problems but when they hit they hit hard and it really was difficult being over here trying to sort it all out. As soon as we got our PR we were lucky to be able to sell them both immediately and it was a massive relief. Quote Link to comment Share on other sites More sharing options...
Marisawright Posted February 13, 2015 Share Posted February 13, 2015 'Guaranteed rent' does look a bit of a rip off (they take want almost 1/3!) - but we could also end up in a tight spot if the place went empty. Houses on our street generally are in high demand, but we have never done this before. In Australia, Landlord Insurance usually includes cover for loss of rent if the property is empty for more than a certain number of weeks. I don't know if such a thing exists in the UK but worth checking. Quote Link to comment Share on other sites More sharing options...
Captain Roberto Posted February 13, 2015 Author Share Posted February 13, 2015 Thanks all Quote Link to comment Share on other sites More sharing options...
Guest Posted February 13, 2015 Share Posted February 13, 2015 In Australia, Landlord Insurance usually includes cover for loss of rent if the property is empty for more than a certain number of weeks. I don't know if such a thing exists in the UK but worth checking. I've never seen that in the UK, not saying you can't get it but rented places out since 1998 and never come across it. Insurance is a good point though - standard buildings insurance will not be valid if you rent your place out, you need a Landlords policy - we use the Simply Business website, they have a compare engine. Plus you can get a 'landlords indemnity insurance' which protects you against the costs associated with bad tenants e.g non-payment of rent, court fees etc. I agree it's not for the feint-hearted though, we had a terrible time with tenants that wrecked the place and left it uninhabitable, it was empty for over a year and without my exceptionally good friends in the UK it would have been impossible to sort out. Unfortunately the timing was bad as we were building a house in Australia so had rent and two mortgages to pay...I'd never put myself in the position of relying on rent to pay the mortgage again - our current tenants moved in 26th September since then they have only paid half the rent one month and been late paying two other months (& then got abusive when we gave them notice!). We pay the mortgage and invest any rental income (pension planning!) so whilst I prefer getting the rent there is no stress if we don't. No idea why you are renting your place out rather than selling but if it's pure investment I'd think about selling up and buying a place in Australia instead if you are going over as PR. Quote Link to comment Share on other sites More sharing options...
Captain Roberto Posted February 13, 2015 Author Share Posted February 13, 2015 I've never seen that in the UK, not saying you can't get it but rented places out since 1998 and never come across it. Insurance is a good point though - standard buildings insurance will not be valid if you rent your place out, you need a Landlords policy - we use the Simply Business website, they have a compare engine. Plus you can get a 'landlords indemnity insurance' which protects you against the costs associated with bad tenants e.g non-payment of rent, court fees etc. I agree it's not for the feint-hearted though, we had a terrible time with tenants that wrecked the place and left it uninhabitable, it was empty for over a year and without my exceptionally good friends in the UK it would have been impossible to sort out. Unfortunately the timing was bad as we were building a house in Australia so had rent and two mortgages to pay...I'd never put myself in the position of relying on rent to pay the mortgage again - our current tenants moved in 26th September since then they have only paid half the rent one month and been late paying two other months (& then got abusive when we gave them notice!). We pay the mortgage and invest any rental income (pension planning!) so whilst I prefer getting the rent there is no stress if we don't. No idea why you are renting your place out rather than selling but if it's pure investment I'd think about selling up and buying a place in Australia instead if you are going over as PR. I think the idea is that if some of us get homesick, we can come back. It's hard to know how it will be until we try it... Quote Link to comment Share on other sites More sharing options...
BearnBob Posted February 14, 2015 Share Posted February 14, 2015 Captain Roberto, We seem to be matching issues step for step so thought id add to the discussion. We will have a property in the UK that is currently rented and will continue to be as we maintain some links with the UK. Although originally our home it has now been rented out for over ten years and we have never had any major issues. We use a large Estate Agent in Chester and will move to partially managed as we have a fair bit of family in the area. We have a gas man to do the certificates and a builder for the general stuff. Tax in Australia as we have PR will be a challenge so getting someone who understands both is key. Bear Quote Link to comment Share on other sites More sharing options...
Captain Roberto Posted February 14, 2015 Author Share Posted February 14, 2015 Hi @BearnBob - sounds like you know what you're doing! We will have to go fully managed as most of our family are too busy. I see you use an estate agent in Chester. We are only in wrexham, so was wondering which one you use? I can PM if you prefer? Quote Link to comment Share on other sites More sharing options...
Guest Posted February 14, 2015 Share Posted February 14, 2015 Contact @Alan Collett for tax affairs - you're right having someone that understands both UK and Australia is the key and his practice specialises in exactly that. Quote Link to comment Share on other sites More sharing options...
Guest Posted February 14, 2015 Share Posted February 14, 2015 I think the idea is that if some of us get homesick, we can come back. It's hard to know how it will be until we try it... That's both sensible and controversial at the same time - I have been accused many a time on here of 'failing' in Australia because we kept a home in the UK....actually we didn't keep a home, it had never been our home, we kept an investment - we sold our family home but this was back end of 2008 and it made more financial sense to keep a 'buy to let'. I have to say it made it very easy to come back though and maybe the ball would have never been set in motion if we hadn't had it. I wasn't in any shape or form unhappy in Australia, for us it just didn't fulfil the promise and there was no reason to stay. I also accept the stress (both emotional and financial) that renting out a property caused certainly didn't help our general life satisfaction in Australia and it is possible things could have turned out differently. The reality is you almost certainly will be homesick, it's part of the process and if it's too easy to come back you may live to regret it and ping-pong. If you were to return would you really want to come back to the same house in the same place? I'm not sure that works for many people, you're leaving for a reason! Quote Link to comment Share on other sites More sharing options...
Captain Roberto Posted February 14, 2015 Author Share Posted February 14, 2015 We wouldn't really want to come back to the same house. It's time for a change, as we've been here nearly 18 years. I have also spent a lot of my time and wages commuting for work here, as there's no jobs where we live for what I do now. So that would mean moving elsewhere in the UK. To be honest, knowing that we'd need to move from away Wrexham closer to a big city (London or Manchester) was a factor in our deciding to go to Aus, and also the reason why we are headed to Sydney. The way we saw it, moving the kids away from their schools and friends would cause an amount of upheaval, so we thought if we are going to do, maybe we should really make a big move. The other thing is that my in laws are really close to us all, and it's hard leaving them behind. And we are also being cautious! We'll only know what it'll be like when we try it. We have to balance all our needs (our kids will be 12, 9 and 6 when we get there). And my wife will really miss her mum. It's a strong bond and the main cause of guilt for us both. So - these are the reasons we are keeping our house here. We have PR and can always sell it if we decide to stay. (Although it seems pretty expensive to live in Sydney) Sorry for the longwinded explanation! Quote Link to comment Share on other sites More sharing options...
Captain Roberto Posted February 14, 2015 Author Share Posted February 14, 2015 Also - I'm not too worried about being called a failure on here. As long as I don't fail my family. Other PIO people aren't a priority! Quote Link to comment Share on other sites More sharing options...
Captain Roberto Posted February 14, 2015 Author Share Posted February 14, 2015 (edited) Ps - @Lady Rainicorn where aboits were you living in aus? Edited February 14, 2015 by noworriesmate Quote Link to comment Share on other sites More sharing options...
Gbye grey sky Posted February 14, 2015 Share Posted February 14, 2015 We wouldn't really want to come back to the same house. It's time for a change, as we've been here nearly 18 years. I have also spent a lot of my time and wages commuting for work here, as there's no jobs where we live for what I do now. So that would mean moving elsewhere in the UK. To be honest, knowing that we'd need to move from away Wrexham closer to a big city (London or Manchester) was a factor in our deciding to go to Aus, and also the reason why we are headed to Sydney. The way we saw it, moving the kids away from their schools and friends would cause an amount of upheaval, so we thought if we are going to do, maybe we should really make a big move. The other thing is that my in laws are really close to us all, and it's hard leaving them behind. And we are also being cautious! We'll only know what it'll be like when we try it. We have to balance all our needs (our kids will be 12, 9 and 6 when we get there). And my wife will really miss her mum. It's a strong bond and the main cause of guilt for us both. So - these are the reasons we are keeping our house here. We have PR and can always sell it if we decide to stay. (Although it seems pretty expensive to live in Sydney) Sorry for the longwinded explanation! I have to say the reasons you state I see as reasons for selling it. I would only keep my house if I thought I would or might return to live in it in the future. Without that reason you might as well invest in a house anywhere in the UK and why would you do that while having to pay rent in Oz. Owning a house on the other side of the planet is fraught and not the greatest investment either IMO. Quote Link to comment Share on other sites More sharing options...
Captain Roberto Posted February 14, 2015 Author Share Posted February 14, 2015 I have to say the reasons you state I see as reasons for selling it. I would only keep my house if I thought I would or might return to live in it in the future. Without that reason you might as well invest in a house anywhere in the UK and why would you do that while having to pay rent in Oz. Owning a house on the other side of the planet is fraught and not the greatest investment either IMO. More good news! Ah well. We probably don't have time to sell it now as we are off in July. Also - buying in Sydney looks expensive and we don't know what suburb would be best as yet or where we can afford. So - we'll have to go with our plan for now and suck it and see. And if we were selling up, family would make me even more guilty. It's hard to explain on here, but it's a big deal for us. One thing at a time... Quote Link to comment Share on other sites More sharing options...
Gbye grey sky Posted February 14, 2015 Share Posted February 14, 2015 More good news! Ah well. We probably don't have time to sell it now as we are off in July. Also - buying in Sydney looks expensive and we don't know what suburb would be best as yet or where we can afford. So - we'll have to go with our plan for now and suck it and see. And if we were selling up, family would make me even more guilty. It's hard to explain on here, but it's a big deal for us. One thing at a time... Ours isn't yet on the market and we are off in July but the market is more buoyant in Surrey than Wreham. I fully inderstand where you are coming from though. Luckily we are both 100% committed to the move so find it hard to imagine being in your situation. Good luck with it all. Quote Link to comment Share on other sites More sharing options...
Captain Roberto Posted February 14, 2015 Author Share Posted February 14, 2015 We are also commited to moving - but also plan to review it as a family after 12 months, 2 years and 4 years. We all make our personal choices. This is ours. There's no way of really knowing. We just plan to try, take it one day at a time. Quote Link to comment Share on other sites More sharing options...
BearnBob Posted February 14, 2015 Share Posted February 14, 2015 (edited) The problem with the forum is that there are many views from many posters and thus are coloured by their views and experiences. However, only your view is valid for your circumstances. Only you can know what will work for you. When I don't know I seek advice (Pension) but having a property in a growing UK market may make the jump back more attractive, or indeed might secure our financial future. In brief - only you will know. Seek advice, filter and enjoy the ride, says the most cautious person I know. Me. More good news! Ah well. We probably don't have time to sell it now as we are off in July. Also - buying in Sydney looks expensive and we don't know what suburb would be best as yet or where we can afford. So - we'll have to go with our plan for now and suck it and see. And if we were selling up, family would make me even more guilty. It's hard to explain on here, but it's a big deal for us. One thing at a time... Edited February 14, 2015 by BearnBob Quote Link to comment Share on other sites More sharing options...
Guest Posted February 15, 2015 Share Posted February 15, 2015 Ps - @Lady Rainicorn where aboits were you living in aus? Close to Fremantle which is sort of Perth but a town in it's own right - a really cool place. There are little things I miss, like decent coffee shops! Quote Link to comment Share on other sites More sharing options...
Captain Roberto Posted May 30, 2015 Author Share Posted May 30, 2015 (edited) Just updating with this post. @Lady Rainicorn @Gbye grey sky @Alaska - some queries. The info is not completely exact as yet, but I am working on it... We did our house up, chose an agent and have a tenant, so all is good for now. We fly out in just over 4 weeks, and will be moving out of our house in 2 weeks time. I'll be back on this with questions regarding Tax on rental income as soon as I get a minute. The basic scenario is this: Point 1 // Tax return - I have been self employed since 1992, although for the last 4 years I have a normal salary job. I still have to do a tax return as I do the odd bit of freelance on the side, and have small residual income (only about £150 a year) from my previous career in music. The residual income is at a level where it's more hassle than it's worth, but combined with the extra freelance work, it means it's worth doing the tax return (just about). Point 2 // Combined income streams? - Once we're in Sydney, It might be too much hassle to get this residual income. I am slightly tempted to just close that account, and let the little payments not get paid. BUT - if I have to do a tax return for rental income, should these income streams be combined? Point 3 // Tax on rental income for a couple - Would my wife and I have to complete a separate UK tax return each when we are in Sydney? if so, are there any benefits? (tax allowances etc?) Point 4 // filling in tax return - Despite being self-employed for so long, I have always had my accountant do the tax return itself. The idea always was that they saved you money and kept the tax man sweet, as they were trusted, thus avoiding investigations and such. Over time, my self employment has dwindled as I now just work for normal PAYE salary pay, but I still use the accountant to do the tax return. This is partly out of habit, because I find bookkeeping pretty dull, and I am scared of upsetting the tax man (it's easier, peace of mind). But, now there isn't much going on except rental income in the UK, should I do my own tax returns now? Is it easy? I gather it's online. Sorry for all the questions, but I am sure you wise people know the right answers. any tips would be most gratefully received. Matthew Edited May 30, 2015 by Captain Roberto typos, bad grammar Quote Link to comment Share on other sites More sharing options...
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