To sell or not to sell in the UK

Discussion in 'Investment Strategy' started by Melbcr, 21st Jul, 2016.

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  1. Melbcr

    Melbcr Member

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    Hi

    I have a query related to a property I have in the UK. I bought the property in 2005, and it was a PPOR, prior to moving to Melbourne in 2006. It has been rented out since moving to Melbourne. This is the only property that I own.

    I have been renting in Melbourne all the while (South East suburbs), but want to buy my first place here. The UK property has had some growth (finally) in the last 3 to 4 years.

    I have also checked to see if I could use the equity from the UK property as a deposit here, but can't find any lenders here in Australia or in the UK to allow me to use it as security.

    I have also considered the tax implications with respect to CGT in both the UK and here and this deters me from selling it.

    Given that I want to buy here, it makes sense to sell the UK property and use the proceeds towards a deposit for the place here. However, I wanted to know what others on this forum thought.

    Thanks
    Melbcr
     
  2. ellejay

    ellejay Well-Known Member

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    We've just managed to sell ours but the issue now is the rubbish exchange rate if we bring the money over and also the rubbish interest rate of .5% if we leave the money in the bank over there. Can you keep the UK house, save a deposit and buy here?
     
  3. Melbcr

    Melbcr Member

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    Hi ellejay
    Have been working towards a deposit to buy, but with what we have currently, it would mean moving much further out plus other factors like LMI as compared to having a larger deposit. Also rate of saving versus rate of property prices can be challenging, though working towards it. ​
     
  4. ellejay

    ellejay Well-Known Member

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    Moving much further out may well be a much smarter move than not buying anything, if you can get the deposit. LMI sticks in the throat a bit but the way the Melbourne market is going it could end up saving you a fair chunk of money by at least getting your foot in the door in a rising market.
     
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  5. geoffw

    geoffw Moderator Staff Member

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    Hi @Melbcr - did you end up doing anything on this?
     
  6. Melbcr

    Melbcr Member

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    Hi @geoffw - have left the UK property as is for now. Am looking into land and home packages, but further out from where I am currently. Contemplating if I continue renting where I am and lease the land and home one out once it is built or not.
     
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  7. Tony3008

    Tony3008 Well-Known Member

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    The issue re the exchange rate is not that it's rubbish looked at in a historic sense (though today's 1.72 is usefully better than 2012-13's 1.50), but where it will go in the future. As the owner of a one-person software business that sells 100% to UK in sterling, I wish I knew!
     
  8. Ross Forrester

    Ross Forrester Well-Known Member

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    The lurking trap in holding UK property is the massive death duties (40% over a threshold!).

    And if the asset is in a trust the trust pays a tax on the increased value.

    Make sure your tax advisor in Australia has a good person for the UK system so you get one piece of advice.