Guest Posted November 3, 2011 Share Posted November 3, 2011 Let it out - the one thing that has picked up is rentals - they have gone through the roof. Its harder to get a morgage and less people have spare money for a deposit - as a result a lot more people are having to rent its great :-) When i make the move, I'm not taking much other than a deposit for a rental and the money for a car. the rest i will try and earn when there. You loose so much bringing it to Oz it just isnt worth it at the moment. Link to comment Share on other sites More sharing options...
Guest Pete the Feet Posted November 3, 2011 Share Posted November 3, 2011 Hello. Quick query which may pose more problems than is worth, but im not sure on the logisitics of the potential impact. When we move to Oz, we always planned on selling our house, exchanging it to $`s and using that money downunder. BUT.,., since our initial thoughts. The house asset rewards is only about £20K and the exchange rate is poor so wouldnt want to exchange it until I really had to. Savings we have, and can rely on for 6 months.,., maybe more. So, would it be viable for us to rent our house out. It would take more £ in rent than what i pay to the mortage. Whats happens tho if i do this, and i then land in OZ, do I have to declare this for taxing, or any other money related incidents i should be aware of.:policeman: Sell, or Rent??? Does it matter to OZ what i do? Cheers. Waste of time, stay there it's easier Link to comment Share on other sites More sharing options...
Danny&Em Posted November 3, 2011 Author Share Posted November 3, 2011 Let it out - the one thing that has picked up is rentals - they have gone through the roof.Its harder to get a morgage and less people have spare money for a deposit - as a result a lot more people are having to rent its great :-) When i make the move, I'm not taking much other than a deposit for a rental and the money for a car. the rest i will try and earn when there. You loose so much bringing it to Oz it just isnt worth it at the moment. I`m only any good at quoting 1 post at a time.,., so i`ll make it the last.,., I agree with all your comments.. Avoiding voids / gaps in rental is key and a drain. Keeping it maintained i understand the importance and luckly is very well presented. lovely garden etc. The home does become a `buisness`.,., or a property of bricks and mortar. I dont think we`d ever return (99.9% sure) as it would be too small given that we are a young family and expanding etc. (you catch my drift). So i`m happy not to call it home and move on. Rental is bonkers at the moment.... Dont need a quick fix.,., and hoping for something a more long term fix with a rental occupier. And certainly dont want estate agents sticking their beaks in and charging the earth for any old scrowt to doss about in. Cheers again.:hug: Link to comment Share on other sites More sharing options...
fleabo Posted November 3, 2011 Share Posted November 3, 2011 As for `sell your house` I really want to and wish i could,.,., but i`m afraid after all ive done to it and with other neighbours having a reduction price war.,.,., it would be more of a case of `give away your house`... Maybe I should sit on it for a few years.,. ,rent it.,., then sell it.,.,? even if a i break equal on the rent / repayments .,., the market may have increased and be in a better position to sell at a `normal rate`. You are not giving away your house - you are selling it for what it is worth today. The alternative is that you hope and pray that house prices are going to inflate in the next few years, and the exchange rate isn't going to get worse. You are tying yourself into two gambles. It is easy to convince yourself that you are going to win both gambles, but I suggest that at least one gamble you will lose. Have you read threads on rentals in Australia - you think the UK is hot... It is a difficult decision - good luck. Link to comment Share on other sites More sharing options...
Danny&Em Posted November 3, 2011 Author Share Posted November 3, 2011 You are not giving away your house - you are selling it for what it is worth today. The alternative is that you hope and pray that house prices are going to inflate in the next few years, and the exchange rate isn't going to get worse. You are tying yourself into two gambles. It is easy to convince yourself that you are going to win both gambles, but I suggest that at least one gamble you will lose. Have you read threads on rentals in Australia - you think the UK is hot... It is a difficult decision - good luck. totally agree.,.,.,., Voted worst-equal best newcomer 2010 by PIO members!:yes: Only kidding, You raise a good point. I`m hoping i can hold out and live of our savings for a while, esp until the house prices return. It is a double gamble tho. Although i feel if sold at todays prices ive already lost. Plan on going in Jan 2013,,, so just researching as much as i can to try and make the right call. just hoping i get some nice people who will take it on. Link to comment Share on other sites More sharing options...
fleabo Posted November 4, 2011 Share Posted November 4, 2011 totally agree.,.,.,., Voted worst-equal best newcomer 2010 by PIO members!:yes: Look, I was up against a strong field!:biggrin: Only kidding, You raise a good point. I`m hoping i can hold out and live of our savings for a while, esp until the house prices return. It is a double gamble tho. Although i feel if sold at todays prices ive already lost. Plan on going in Jan 2013,,, so just researching as much as i can to try and make the right call. just hoping i get some nice people who will take it on. We never considered renting our house out. We sold and bought a place over here. If I bothered to do the sums, on paper we are financially 'better off' - without even contemplating how you price living in your own home and feeling settled. Of course, that 'paper' sum can change on the whim of the exchange rate, but your life will continue to go on irrespective. Don't get me wrong, I can see the attraction of holding on to your property, but you must factor in the possibility that things may get worse. Good luck in your deliberations!:wubclub: Link to comment Share on other sites More sharing options...
kellyjamie Posted November 4, 2011 Share Posted November 4, 2011 count us in on this thread unfortunately. we would love to sell ours but we have dropped the price to as low as we can and it just wont sell, we havent even had a viewer so really the decision had been taken out of our hands and renting it will have to be. Link to comment Share on other sites More sharing options...
Jambos Posted November 5, 2011 Share Posted November 5, 2011 Hi all Our perspective is that we will try and sell (should not be a problem in our area) keep the money in a bank for at least a year. Given our estimated time frame this would be from getting a co in Jan / Feb -12 ( 3 months ) Moving to Oz 9 months (Nov-12) Renting for 12 months (max) Total months 24 months (2 Years). By then we hope the ex-rate would have improved (ex rates tend to be cyclical). There is already talk of further interest rate cuts in Oz for 2012 (this should help) Again in all depends what is just around the corner and with the GFC 2 potentially looming who really knows? Anybody have a view on where the £/$ will be say in 1-2 years? Link to comment Share on other sites More sharing options...
Alaska Posted November 5, 2011 Share Posted November 5, 2011 If we come it will be on a 457 so we will definitely keep our house. We only bought 2 years ago and it got a 5 year fixed mortgage so would have a big penalty, also it is worth less than we paid for it anyway. No-brainer for us. The bigger problem is the other house we bought to renovate. We bought it just before the crash! We intended to renovate it and sell it straight on. Of course it didn't sell and the value went down. It's on an interest only mortgage at the moment which is brilliant, but won't last forever. We have been lucky and have had the same (brilliant) renters for over 3 years now. Link to comment Share on other sites More sharing options...
Jambos Posted November 5, 2011 Share Posted November 5, 2011 Hi Alaska Slight different position to you. Mortgage paid off. Property purchased 12 years ago. Property worth more than we purchased it for.Therefore looking to cash in and sell. Only have one property. Our Visa is 176 Family. Link to comment Share on other sites More sharing options...
Danny&Em Posted November 7, 2011 Author Share Posted November 7, 2011 count us in on this thread unfortunately. we would love to sell ours but we have dropped the price to as low as we can and it just wont sell, we havent even had a viewer so really the decision had been taken out of our hands and renting it will have to be. I think thats the reality of most folk. Others who have paid of the mortgages or lucky enough not to have such an impact of the decision of buy / rent. It more of a case of the pound versus the dollar and getting a realistic exchange. And i`d hold out and wait if you can afford it. But that based on nothing more the guess work (I travelled in 2004 and it was $2.4 to the pound) Non the less. The house increase and then slight `decrease` has caught most 1st home buyers and put them into a strian. But after buying your first home doing it up nicley and hoping to make a little and capturing a something out of it. Most folk in UK are slashing their home prices to buy bigger etc,.,. to buy a bigger house with a bigger slashed price. [i would do the same] I`m more of less resigned to renting,,,, esp given the attraction of the return... Just need to make sure we avoid any gaps and voids as Alan C prev mentioned. Good luck.,., Link to comment Share on other sites More sharing options...
Guest Posted November 14, 2011 Share Posted November 14, 2011 We are renting too. All our friends over in Australia have rented their properties in the UK out & are glad they have done so. If things don't work out for us over there we want our house to come back to. Friends have told us that they want to rent our house which is great news. We trust them 100% to look after it and to be honest it's a big weight off our minds. Of course everything will be done by the book...contract, insurance, boiler check etc. I just wish our mortgage company were being more helpful. We have to pay an extra 1% for a consent to let. And the consent to let has to be reviewed each year. Can't get a buy to let as we don't own 25% of our property. :sad: Link to comment Share on other sites More sharing options...
Alan Collett Posted November 14, 2011 Share Posted November 14, 2011 Will your friends be deducting tax from the rent, and paying it to HM Revenue each quarter? HMRC form NRL1 pertains. See: http://www.hmrc.gov.uk/cnr/nr_landlords.htm Best regards. Link to comment Share on other sites More sharing options...
Danny&Em Posted November 14, 2011 Author Share Posted November 14, 2011 Will your friends be deducting tax from the rent, and paying it to HM Revenue each quarter? HMRC form NRL1 pertains. See: http://www.hmrc.gov.uk/cnr/nr_landlords.htm Best regards. How easy is it to set up? There seems to be alot of paperwork for letting out your home if you cant sell it? Is this standard? It will be my only rental prop. Cheers Link to comment Share on other sites More sharing options...
Alan Collett Posted November 14, 2011 Share Posted November 14, 2011 If you have a letting agent with approval under the NRL scheme=> the NRL1 form is fairly straightforward (in my view). The problem arises when you don't have an agent - what tenant is going to be agreeable to withholding tax from the rent and paying it to HMRC each quarter? Not many. Best regards. Link to comment Share on other sites More sharing options...
Danny&Em Posted November 14, 2011 Author Share Posted November 14, 2011 If you have a letting agent with approval under the NRL scheme=> the NRL1 form is fairly straightforward (in my view). The problem arises when you don't have an agent - what tenant is going to be agreeable to withholding tax from the rent and paying it to HMRC each quarter? Not many. Best regards. Cheers Alan.,., Thats the problem - letting agents want a small fortune.,., and then thay can put almost anybody in to fill the rent. The ones that hold little value for respect and property and do not keep the house in a clean order etc. I dont mind paying the taxes etc. But just dont want to start paying for everything if i can get my head around it. Thanks again. Link to comment Share on other sites More sharing options...
Guest Posted November 14, 2011 Share Posted November 14, 2011 Thanks for that Alan. I had assumed we would responsible for paying the income tax. It's all so complicated! Here's our dilema though. We have had several set of friends interested in renting our house as it has a large downstairs and big garden....perfect for a family. The friends who are most serious about it are the perfect tennants for us. I know they will look after our house & garden (probably better than us!) and I can't think of anyone I would rather have living there. I don't trust agents and with being so far away, I want good communication about what's going on. Having said that my aussie friends say that once they were over there their UK house was the last thing on their minds. Link to comment Share on other sites More sharing options...
Guest lol1984 Posted November 17, 2011 Share Posted November 17, 2011 We have just moved over to Western Australia and our tenants are due to start renting on the 1st of December. We had to drop the rent by 45 pounds to get tenants after its been empty for 2 months. The rent will not cover the mortgage so we'll have to top it up, but at least we won't be making any profit so hopefully our tax situation will be simpler. We've done the non-resident landlord forms and they've advised us to do a tax return. We knew from the outset that we wouldn't get enough rent to cover the mortgage (about 200 pounds short a month), but that property is our investment and we'll work on paying off the mortgage as soon as possible. Thanks to some nice mining wages we could probably pay it off in 3 years if we worked hard on it. Realistically I think we'll pay it off in about 4-5 years. Then it will start paying for another investment property in the UK. Link to comment Share on other sites More sharing options...
Life on easy street Posted November 17, 2011 Share Posted November 17, 2011 You are not giving away your house - you are selling it for what it is worth today. The alternative is that you hope and pray that house prices are going to inflate in the next few years, and the exchange rate isn't going to get worse. You are tying yourself into two gambles. It is easy to convince yourself that you are going to win both gambles, but I suggest that at least one gamble you will lose. Have you read threads on rentals in Australia - you think the UK is hot... It is a difficult decision - good luck. that is soo true Link to comment Share on other sites More sharing options...
pintpot Posted November 17, 2011 Share Posted November 17, 2011 We have just moved over to Western Australia and our tenants are due to start renting on the 1st of December. We had to drop the rent by 45 pounds to get tenants after its been empty for 2 months. The rent will not cover the mortgage so we'll have to top it up, but at least we won't be making any profit so hopefully our tax situation will be simpler.. Your tax situation will be very simple - you won't pay any You only pay tax on any profit you make, after you have deducted mortgage interest payments (NOT capital repayments) and all other expenses (including agents' fees, anything you spend on maintenance, annual gas checks, insurance and the like. You can even claim a 10% wear and tear allowance - this is supposed to allow for periodic refurbishments like new kitchens and so on) Link to comment Share on other sites More sharing options...
Alan Collett Posted November 17, 2011 Share Posted November 17, 2011 10% wear and tear deduction only available in the UK - and only on furnished property. Best regards. Link to comment Share on other sites More sharing options...
pintpot Posted November 17, 2011 Share Posted November 17, 2011 Didn't know that, thanks It's only a "rule of thumb" anyway, in the same way the lodger allowance is - you can still set your actual expenses off against the revenue Link to comment Share on other sites More sharing options...
desreb Posted November 27, 2011 Share Posted November 27, 2011 A further question on this note: We've just received PR, and are renting out our UK house. Now, assuming that we stay and sell our UK property at some point, it will incur a CGT liability that will be realised when we sell it. The question is, how do we confirm the value at the date of PR? Do we need to get a UK estate agent to value the property and confirm it in writing? What do the ATO accept as proof? Also, which exchange rate should we note as the definitive rate that gives the house's capital value in AUD on the PR date? Or is just anything reasonable accepted? D Link to comment Share on other sites More sharing options...
desreb Posted November 27, 2011 Share Posted November 27, 2011 Also - I had the thought of gearing any LOSS in value in the house/exchange rate, against gains in Aus. So if we decide to sell the UK house, and make a loss of $50k, we could offset that against capital gains elsewhere. Having said that, if I could guarantee a $50k capital gain in any year of my choice, I wouldn't be on a train to Burwood right now. Link to comment Share on other sites More sharing options...
jamesnparry Posted November 28, 2011 Share Posted November 28, 2011 A further question on this note: We've just received PR, and are renting out our UK house. Now, assuming that we stay and sell our UK property at some point, it will incur a CGT liability that will be realised when we sell it. The question is, how do we confirm the value at the date of PR? Do we need to get a UK estate agent to value the property and confirm it in writing? What do the ATO accept as proof? Also, which exchange rate should we note as the definitive rate that gives the house's capital value in AUD on the PR date? Or is just anything reasonable accepted? D yes CGT will be due as this is no longer your main residence.......you need to get RCIS surveyor to do valuation...as he/she will do comparisions on similar properties...as you are a PR in auz, soon would be adviseable, as HMRC will class it as now any way, so proof its better than they say one figure less than yours and you have the hassle of trying to counter guess them. don't forget to keep all receipts, so they can reduce your gain, all fee's etc. Link to comment Share on other sites More sharing options...
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