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Total novice! Aussie living in the UK!

Discussion in 'Introductions' started by Indi, 15th Jan, 2016.

  1. Indi

    Indi Member

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    Location:
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    Hi everyone!


    I have recently joined based on a recommendation from a friend. I am an Australian citizen living in the UK and after years of procrastination I am ready to purchase my first property. Naturally this is a very exciting time however it’s also quite daunting as I am highly inexperienced in this area. Originally from Sydney I can’t really afford to buy in an area I know and as such started to research Brisbane based on the ‘gurus’ outlook for the next few years. I have spoken with a mortgage advisor who has crunched some figures, my maximum borrowing amount is $420,000 and I have a deposit of $80,000. That being said I am not convinced I wanted to spend $500K on my first property, I think I am just a little scared about it not working out or not growing. The mortgage broker has suggested I pay interest only on my loan and transfer money into the offset account to keep interest down.


    I wanted to see if anyone could help me out by point me in the right direction with tips/ podcasts (anything really) that will help me with my suburb research and ultimately the area I want to buy in within Brisbane. I know for me personally I would be drawn to an area with great restaurants/ bars, public transport, shopping centres, supermarkets etc. However without being on the ground and knowing where areas are up and coming this whole exercise is extremely daunting for me. For that reason I am considering using a buyer’s agent. I am tossing up whether I should use a nationally recognised agent or someone who specifically focuses on the Brisbane market. Again, if anyone has any advice/ past experiences please do share them! J


    Looking forward to discussing things further!
     
  2. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Hiya

    Welcome aboard.

    If money permits - consider using a buyers agent.

    Cheers

    Jamie
     
  3. MsAli

    MsAli Well-Known Member Premium Member

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    Hi Indi - correct. These may be the reasons you were suggested I/O:

    1. Paying principal reduces what you owe to the bank and hence reducing the tax deductiblity of your loan (although appreciate you won't be able to get all tax benefits while offshore). These can be claimed when you are back also. Definitely check with your tax accountant.

    2) Risk management strategy, for when rates go up and you are actually paying principal

    3) As you collect funds in the offset you pay less interest anyway. So if you have 300k owing and 100k in offset you pay interest on only 200k

    4) Should you decide to buy a home, you can take the funds out of the offset - not needing to sell the property and keeping the loan tax deductible at the original loan amount.

    If you were in Sydney or Melbourne I would have recommended you to hit the ground in Brissy but given you're in a different time zone altogether, having a BA on the ground will be invaluable.

    Welcome to PC. You've found the best resource in the real estate space in Australia!
     
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  4. Casteller

    Casteller Well-Known Member

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    Or buy in the UK ? Thats what I did in the first year when I moved there, one of my best investments ever (was a PPOR though). Maybe prices in London a bit toppy at the moment (but no more than Australia). Also UK tax laws have changed - cant deduct full interest on the loan anymore from the rent, and if you are non-dom maybe Australian investments better.
    The UK - greatest tax haven on earth (for non-doms). Take advantage of it, no other countries do it.
     
    Indi likes this.
  5. Azazel

    Azazel Well-Known Member

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    Hey @Casteller

    What's a non-dom?
     
  6. Indi

    Indi Member

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    Thanks Casteller, I would have thought based on that budget London was out of my price range but maybe not... I will have a look into it!
     
  7. Indi

    Indi Member

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    I think its supposed to be pom not dom :D
     
  8. Indi

    Indi Member

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    Thanks MsAli, the forum has been such a great help so far. It comforting to know there is help out there from people who don't have their own agenda :)
     
  9. Blacky

    Blacky Well-Known Member

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    What is your tax status in Australia?
    May impact on your decision to invest either here or elsewhere?

    Blacky
     
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  10. Bran

    Bran Well-Known Member

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    We all have our own agenda. It's just the relationship you have with it that varies ;)

    Why not buy in Cambridge, England? Completely land-locked with the green belt.
     
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  11. The Butler

    The Butler Well-Known Member

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    Non dom I believe means not domiciled in uk for tax purposes
     
  12. Indi

    Indi Member

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    Hi Blacky, I am not an Australian resident for tax purposes
     
  13. Blacky

    Blacky Well-Known Member

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    Its not easy to be both (or neither?).

    Being non-res in Australia means you get bent over by the ATO twice as much on income generated in Australia. So watch this when making your decision.

    Blacky
     
  14. Indi

    Indi Member

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    Basically I have been told by an Accountant that I don't need to lodge a tax return in Aus as I am not planning on returning. Well, not at this stage anyway.
     
  15. Casteller

    Casteller Well-Known Member

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    Yes its non-domiciled, a unique tax status not available in most other countries.
    It means your foreign income is not taxed at all, as long as it is not remitted to the UK. So you can legally invest in low tax offshore havens without paying tax anywhere else. But they are cracking down on the status, but I think recent arrivals would still have this status, UK citizens not, you cannot easily get rid of being domiciled once you have it (non-dom status used to last 17 years).
    Was/is a great rort.
     
  16. JDP1

    JDP1 Well-Known Member

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    Indi,
    I would suggest using a buyers agent, preferrably someone on ground in brisbane. Being on the ground can determine the qualitative factors.
    Although there may be tax advantages of buying in england, i would rather buy in australia for the simple fact that you are australian citizen and never know if you need to return..and having a roof over your head at yhat time is invaluable...besides there is probably more cg potential in brisbane than london (which has already boomed like most tier 1 cities ) in short and med terms.
     
  17. Indi

    Indi Member

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    Location:
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    Thanks JDP1, I am thinking the same. London isn't in my budget, I had a quick look online and I would only be able to buy in dodgy areas! I don't suppose you know/ can recommend any Buyers Agents in Brisbane?
     
  18. Azazel

    Azazel Well-Known Member

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    Ah Ok, thanks for clarifying.
    This tax thing is intriguing, will put getting EU passport on my to do list.
     
  19. JDP1

    JDP1 Well-Known Member

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    i dont know many ba's here in brisbane...search the forum...andrew allen i think is one whos name is used a bit here in brisbane. Im sure quite a few others as well on this forum..
     
  20. MTR

    MTR Well-Known Member Premium Member

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    Perhaps $$$$$

    Also if he has pounds there is a great currency play at the moment, can buy more for his money in Australia. Though he has missed Syd boom.

    Indi
    I would also consider Melbourne as a very good option, around 17km ring, cheap as chips and close to CBD, just make sure you are near the rail. Melb has been flying under the radar for some reason, some great buying opportunities.

    Otherwise go with the herd Brisbane.

    MTR:)