Potentially selling in Australia, buying in Ireland

[autboy]

OK, I am posting here for the first time. Any guidance would be appreciated or a recommendation for someone who could advise further.

My situation:
- Married with 2 kids
- Started working in Northern Ireland for 5 years and then worked in Australia for 8 years before moving to Dublin for first time last year
- I am currently on a 12 month contract earning €110k per year providing software consultancy. I started my own limited company last year. Spouse and I are the directors
- My spouse has a permanent office job earning €65k per year
- Paying rent in Dublin €1,650 monthly and childcare costs of €1,600
- Cash savings balance of €90k and currently saving €20k per year
- We own a property in Sydney that is rented out with positive annual cash-flow of AU$5k. Property is worth AU$800k with outstanding mortgage of AU$485k so approx €220k of equity in Euro
- Pensions:
* standard UK pension contributions for the 5 years I worked in NI
* pension balance of AU$150k in Australia
* no pension in Ireland
- I am 35 and keen to plan for pension and possibly other investments to provide for future
- Currently no income protection or life insurance in Ireland

We would like to buy a house and likely minimum cost is €600k so we are €30k away from a 20% deposit of €120k. Main question is should we sell the house in Australia to bring the €220k or equity back here or hang on to it as it is currently performing well. If we sold the Australian property should we buy more expensive place here or invest it?

Other things to address are advice on financial planning and protection for the future - pension, investments, insurance protection to provide in case of illness/death

Thanks for any views,
autboy

 

[Brendan Burgess]

You will need to pay for professional advice from someone who understands the interplay of Irish, Australian and UK tax and pensions but here are some general principles.

If you are planning to settle in Ireland, it makes little sense to have a property in Australia. You will face complicated income tax, CGT, and CAT issues which could be expensive to resolve.

If you have around €300k when you are buying a house for €600k, you will get the lowest available mortgage rates - currently around 3.6%. If you borrow 80% Loan to Value, you will probably pay around 4%. So it's well worth borrowing as little as possible.

You are buying a long term family home. You can afford to pay more than €600k, so buy the home you want to live in, within reason.

So sell your property in Australia.

Brendan

 

[Steven Barrett]

Hasn't there been a lot of talk about a property bubble in Australia? If you think there is, wouldn't it be a good idea to cash out there and use the money so you have a smaller mortgage in Ireland?

You will do well to find an tax advisor who will have working knowledge of two or three different jurisdictions. Most firms recognise this so there are a number of global alliances in place, where they all refer business to each other.

Steven
www.bluewaterfp.ie