Reluctant Landlords 4
Protect your property from the tax men (4)
The fourth of a five part series of advice from experts Montfort International plc for home-owning migrants
Releasing equity
In most cases, the home is an individual's major asset and it may be necessary to release equity from the property to help finance the move. If there is a mortgage against the property you cannot sell and decide to rent out, you can claim the interest charged on that loan as a deduction for UK tax purposes. If the remortgage is not structured correctly you may find that the interest on the additional borrowing is not tax deductible in Australia.
Before remortgaging, you will need to ensure that the selected lender will give you permission to let out your property. Generally buy-to-let mortgages carry hefty arrangement fees and the rates are higher than that on a residential basis. As such, it may make sense to remain on a residential mortgage if your lender will grant permission to let. If you are looking to remortgage, there are a few select lenders who will still grant you permission to let once you have lived in the property for a relatively short period after you have taken out the new loan.
You may wish to opt for a fixed rate deal so that you know what your outgoing will be each month and to help you budget. If you intend to sell the property at the earliest opportunity you may opt for a deal with a short term fixed rate or minimal redemption penalties.
If you believe that renting out your UK property may be a viable proposition, seek specialist mortgage and tax advice to ensure you stay on the right side of both the UK and Australian tax offices. Few UK accountants or advisers will be able to advise on the Australian tax situation, so talk free to one that does, Montfort International plc, on 0800 018 3571.
The fourth of a five part series of advice from experts Montfort International plc for home-owning migrants
Releasing equity
In most cases, the home is an individual's major asset and it may be necessary to release equity from the property to help finance the move. If there is a mortgage against the property you cannot sell and decide to rent out, you can claim the interest charged on that loan as a deduction for UK tax purposes. If the remortgage is not structured correctly you may find that the interest on the additional borrowing is not tax deductible in Australia.
Before remortgaging, you will need to ensure that the selected lender will give you permission to let out your property. Generally buy-to-let mortgages carry hefty arrangement fees and the rates are higher than that on a residential basis. As such, it may make sense to remain on a residential mortgage if your lender will grant permission to let. If you are looking to remortgage, there are a few select lenders who will still grant you permission to let once you have lived in the property for a relatively short period after you have taken out the new loan.
You may wish to opt for a fixed rate deal so that you know what your outgoing will be each month and to help you budget. If you intend to sell the property at the earliest opportunity you may opt for a deal with a short term fixed rate or minimal redemption penalties.
If you believe that renting out your UK property may be a viable proposition, seek specialist mortgage and tax advice to ensure you stay on the right side of both the UK and Australian tax offices. Few UK accountants or advisers will be able to advise on the Australian tax situation, so talk free to one that does, Montfort International plc, on 0800 018 3571.
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