Moving to Oz - rent or sell home?

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Matilda2025

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Hope to go to Australia by the end of this year on a 5 year visa, with intent to renew this while waiting on permanent visa. In late fifties.

Do I rent my house out or sell it? House would be worth about €300k with a mortgage of about €75k, rental about €1800 pm
Renting - if I want to come home at any time (probably because of finances) would I be able to move back into my house without having to give a huge amount of notice? This is my biggest concern.
House still has a mortgage so need the rent to cover that and the tax. If the tenant wasn't paying what recourse would I have as would need this to cover mortgage? Do I get a company to manage the property?
Am aware I would need a rent collection agency so thinking of a company that does this and the tax - would like recommendations please.

Selling - would only be on a temporary visa in Australia so if this ended or I had health issues and had to come back would be unlikely to be able to afford to buy in Ireland again. I would prefer to keep the house until I had permanent residence in Australia/or was happy that I could manage there financially.
 
Very difficult dilemma.

If you knew that you were moving to Oz permanently, then selling the house would be clear.

It is hard enough to manage a property when you are living nearby. Trying to manage it from Oz would be very difficult.

But if Oz does not work out, you could be priced out of the market.

It would definitely be difficult to get it back if you return to Ireland. At best, minimum notice periods would apply. At worst, the tenant just decides to stay and it could take you a year or more to get it back.

Have you any family member or friend who could rent it or even house mind it for a year or so. After 6 months to a year, you will have a much better idea of whether you want to stay in Oz or not.
 
Thanks Brendan - yes it is a dilemma, partly because Australia is so difficult to stay in and finances. Would hope to rent to someone we know locally rather than a stranger but even then there are no guarantees. We did rent it out for a year before but it was always only going to be a year and we knew the tenant.
Could I rent a room as it is still my PPR as I will be paying tax in Ireland not Australia?
 
I would have thought you should surely keep it until your future plans are absolutely certain.

Renting to a friend, a long-term tenant via Airbnb or a corporate let would seem like good options until then.

Personally, I would avoid a normal tenancy if possible.
 
No one will take care of your business as well as you.

Managing agents will (in my experience) cheerfully do the minimum & charge the maximum.*

Sell or leave it empty (and secure) and sell later.

If you decide to rent, budget for a return trip at least every six months and do your own inspections.

*case in point, I've just come from viewing a previously tenanted 2bed apartment for sale, where the original tenant had installed bunkbeds and 8 people were living there. All while being 'inspected & managed' by said letting agency.
 
Be very careful when renting.
You will not be one of those "accidental landlords" who post occasionally about things.

Understand your responsibilities as a landlord, both to the tenant and to the taxman.

Your €1800 per month would be subject to tax.
Its my understanding that your mortgage payment is after this not before.
Also any taxation agreements with Australia would need to be studied carefully.

After 6 months the tenant, be they family or a stranger, will accrue part 4 rights so can stay for a further 5.5 years.
This means that bar certain clauses they can stay.

To give notice should you wish to return for example must follow a specified format.
Failure to follow proper procedures may invalidate the notice.

From Oz managing the necessary inspections/problem solving could be difficult.
Is there a property management agency or similar who could be trusted to manage the tenancy for you?
 
BlackandBlue said:
Be very careful when renting.
You will not be one of those "accidental landlords" who post occasionally about things.

Understand your responsibilities as a landlord, both to the tenant and to the taxman.

Your €1800 per month would be subject to tax.
Its my understanding that your mortgage payment is after this not before.
Also any taxation agreements with Australia would need to be studied carefully.

After 6 months the tenant, be they family or a stranger, will accrue part 4 rights so can stay for a further 5.5 years.
This means that bar certain clauses they can stay.

To give notice should you wish to return for example must follow a specified format.
Failure to follow proper procedures may invalidate the notice.

From Oz managing the necessary inspections/problem solving could be difficult.
Is there a property management agency or similar who could be trusted to manage the tenancy for you?
Click to expand...
Thanks Black and Blue. Yes I am aware it is subject to tax but can offset the interest on the mortgage. Visa in Australia is temporary so will not have work rights or pay tax there is my understanding. If I was renting I would only want to either come back to live in it myself or to sell it which I feel is allowed, so would like to know what type of notice I would need to give. Had a management company before so would probably have to do that again which adds to the costs.
If I sold and bought somewhere mortgage free, I could leave it idle but would not be earning money and obviously would have upkeep. If I sold and put the money in an account I am unsure of how much that would give per year and also I would be paying DIRT. Buying in Australia while on a temporary visa means paying a foreign investor tax of about $50k plus extra stamp duty.
I probably wouldn't have any issues if I was a corporation and would probably pay less tax!
 
Once 6 months has passed, the renters can stay indefinitely apart if you give notice to come back or sell (or improve under some conditions), not 5.5 years.
 
DannyBoyD said:
Double check that - I don't believe your income will be tax free in oz.
Click to expand...
I am quite sure that I do not have to pay any income tax in Australia as a temporary tax resident with no income from Australian sources. I have checked this out with different migration agents and seen questions about it on the ATO site. I am aware that if I want to sell my house I will need to do before my permanent visa is granted otherwise I would be subject to CGT, Once I have a permanent visa there I will have to declare my overseas income and probably pay tax subject to the double taxation agreement. However it will be at least 14 years before this happens.
 
No it would be a 5 year temporary parent visa with no work rights. I think that I don't really have an option to sell until I am more settled over there so renting, even with it's downsides, is probably the only option. Thanks everyone for the comments. I would like to know the timelines for giving notice.
 
If you have no income while abroad & no right to work it might be nice income. But rules are that the tenant is obliged to deduct imputed tax on your behalf - which is messy. You'd also need to give sufficient notice to the tenant when returning home & hope that RTB is more effective than it is now (& hope that an SF led govt hasn't been elected in the meantime & added even more restrictions to evictions or even an outright ban).
You won't be eligible for rent a room as you are not living there and not tax resident (you need to be in the country for a minim number of days per year for tax residency). Don't be fooled by "someone you know" - a lot of the horror stories we read on here are from people renting to someone they knew who exploited the relationship. There's rules around non resident individual landlords and tax you should get an accountant to explain to you. It sounds like you are still paying a mortgage on it so it may cover some of that but as other posters have said, mortgage interest after not before tax.
If you do go down that round find a very good agent to manage it for you and ensure your accountant is in touch with them.
 
You probably need to consult a tax adviser in Oz who is familiar with the type of scenario that you describe. Your connections there are best placed to recommend, I suggest.

What is your income? You could have Irish rental income in future. I would have thought that you will become tax resident in Australia and as such you would be taxed on all your income worldwide but that you would get credit for Irish tax paid (rental). You think that, because of the type of visa, you are exempt in Australia (but it seems that you have no work rights there so you will have no Australian income). It seems essential to me that you confirm your tax position on income from outside Australia. An Australian adviser is likely the best source of advice.

I think that you should particularly focus on the disposal of a property in Ireland – would that be exempt from Irish CGT in first year? – and how would that would be taxed in Australia, even in your year of arrival?

Also, will any tax paid on rental income in Ireland exceed potential Australian tax so that you would have no further liability there. What expenses/deductions would be allowed in Australia?

And then other income that you may have.

If the advice is that you are exempt in Australia from income from all countries then you are fine and then you have nothing to worry about, but you need to confirm that.
 
Yes I am exempt as it is a temporary visa with no work rights and I will have no Australian income. Before I am granted a permanent visa I would have to sell the house or would be charged cgt in Australia.
 
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