Moving back to UK: sell or rent our US house?

[nicobean]

Hello all, need some honest advice. We have lived in the East Coast for 6 years. DH is from here, we have 3 kids: DD 14 in 8th grade, DD 12 in 6th grade and DS 10 in 4th grade.

On the surface everything’s lovely, big house, nice area, great schools. However I’ve never really settled here (expected this really as I’ve lived in the US before kids) and I now have a job organised back in our old town so we’re looking to move back to the UK.

My work is enjoyable here (healthcare) but not as challenging as the UK. I did apply for a full time job at my present hospital in the US but didn’t get it. So work wise I feel I do need to move on.

The kids don’t appear to have any strong views either way with the move. My DD’s remember living in the UK while my DS doesn’t. My middle DD is the most against it. DH would rather stay but is up for living in the UK again. He’s hoping to keep his present job working remotely.

My problem is now I have my job we are stalled in organising things. We can’t make up our minds about whether to rent out or sell our house here. Selling would give us $ towards a deposit on a new place but renting would give us the option to return in about a year if things don’t work out.

I wonder if I’m waiting for something to go wrong to force my hand! I need to be in the UK by the end of March.

All opinions and advice welcome, thank you.

[chopc]

Rent your US house until you are sure UK is where you want to settle. Can't see the UK market moving quickly in the next year so what you can afford now should be similar to what you can afford in a year.

One thing I would say is that you are not going to fully appreciate living in UK if you move in the middle of the pandemic. Kids will find it difficult to make friends if schools continue to be closed for the example

Plus if your DH Aus working remotely, he will not have opportunity to make friends where you live either.

So you are probably looking at giving it at least 2 years

[solicitoring]

How will tax work for you op? I thought you got taxed on worldwide assets.

[nicobean]

Chopc: renting until we’re sure we’re settled does seem like the obvious choice but at the same time I’m worried this place won’t rent easily; it’s outer suburbs/rural and everyone owns.

My kids haven’t been in school for almost a year, it’s so sad. I know it’s a crazy time to move, but with my eldest I feel it’s now or never with GCSEs and getting her back in the British system.

Luckily we are going back to the same town we lived in for 12 years before coming here so we do have friends locally, thank goodness.

Solicitoring: I’ve got no idea about the tax implications! We file both US and UK taxes every year and do have a US accountant as things get complex (we are definitely not rich but it helps). I’m sure we’ll need professional help as I’m sure there’ll be issues.

Thank you for replying.

[JE17]

The problem with renting out your property is that you're so far away when things go wrong. I felt so responsible as a landlord and I wanted to be able to sort out any problems immediately. We used a fully managed service, it was expensive and they still didn't resolve things quickly enough in my opinion. I wish we'd sold up, also would've encouraged us to buy more quickly in the country we moved to. Is it at all likely you'd move back to the US in the immediate future considering the ages of your DC?

[ZZTopGuitarSolo]

Watch out for capital gains tax on any increase in house value if you sell after renting it out.

Also check what you'd pay in realtor fees to sell.

Re tax generally, you can claim a credit for tax you've paid in the UK and offset that against what you would owe in the US.

[JesusWeptLady]

I don't think you should be filing taxes for both countries. We've been in the US since 2009 and made sure we stopped UK taxes as soon as we got here. Unfortunately I'm a math dunce so cannot explain the ins and outs of it.

Do you have green cards?

[londontonyc]

We're in upstate New York, and the property market here has gone crazy with people wanting to move out of Manhattan. Working from home has made suburbs and rural areas very popular indeed and some people are still on expat packages, getting rent paid by their company. We bought when we arrived as the rent here is very expensive, and we'll probably rent out the house when we return to the U.K. Also, I believe there are big fees associated with selling - 6% I think?
On the other hand, I know a lot of renters who seem to deal directly with landlords when problems arise. This would make running a property a pain from abroad,

[nicobean]

Thanks all for the different points of view everyone.

It’s so tempting to sell, the realtor we used to buy this place has offered us 5% commission and feels it would sell quickly. We have also met with some property management people who would look after this place while it was rented as obviously we can’t from the UK. There might be some issues finding tenants I think.

I guess it comes down to whether I can cut ties with this house (which I love) and fully commit to returning to the UK or hold onto it, likely at more financial risk.

I’m worried I’m going to end up in a pokey rental house back in our old town with three kids who miss their friends and their old life and blame Mum for ruining everything on a pipe dream. Or I stay here and continue on as I have been, feeling unfulfilled, bored & lonely.

Arghhh!!!

[KobaniDaughters]

You won’t pay double tax on U.K. earnings unless you’re citizens or GC holders (and then only if you pay for a re-entry visa as it keeps your residency in the US open for 2 years - might be worth considering in any case to allow you flexibility), though you’ll be taxed on the rental income the two countries have a double taxation agreement so a good accountant will help you.

We intend to move back to the U.K. once our citizenship is confirmed, we will keep our US house and rent it out because it’s in a city where prices will only go up so we may as well hold onto it, it can be rented out for at least double the mortgage and property tax so will pay for itself, and it gives us flexibility should we need/want to move back at any point.

Remains to be seen if we use a management company or not - we’ve managed renting our flat in london easily enough while we’ve been gone for a decade but we have amazing tenants who were friends of friends who take such great care of the flat and we in turn take great care of them and have a really good relationship (they get the carpets professionally cleaned twice a year, I told them not to pay rent when they both lost their jobs at the start of the pandemic) but it’s a gamble

Are you PR and do you want the option to return kept open?

[nicobean]

Hi Koban, I admire how organised you are! Yes we’re both citizens. It took an amazingly long time for me to finally get it but after all the money & stress it’s nice to have that security.

Our house won’t rent for anything like twice the rent sadly but I think that’s due to the area it’s in.

We do have a house in the UK we rent using a management company and for the most part it’s gone well. I did have to mentally step back from it being “my house” and instead someone else’s.

That house is too small for us now and I’m not sure I can do that mental shift so easily with this house as it fits us well now.

I think I might be leaning towards selling just for the absolute break with our life here.

[ZZTopGuitarSolo]

Hmm, your oldest is in 8th grade, and it will get increasingly difficult to move country as they hit high school.

I think I'd say sell in the US, rent in the UK initially just to make sure it's the right decision, but be ready to move back within a year if it's a total disaster.

Tough decision!

[KobaniDaughters]

@nicobean I’ve had a lot of time to think and research as I’ve wanted to leave for about 2 years!! Our citizenship interviews are in 2 weeks so then it’s a case of trying to find jobs that will enable us to move back

I suppose it also falls to whether you’d rather the stress of trying to sell now before you leave or after when you’re home really - and I’d look into all the financial repercussions of both options (how likely you are to sell v rent, likelihood of the value going up if you rent for a few years) - I have the number of an amazing financial advisor who’s used to our kind of situation if you want it?

[Justbetweenus]

I’m all for simplicity. Sell! If you want to return, just buy another place - there’s no stamp duty right so it’s not punitive. I’d be more wary of paying SD for a house in the UK and changing your mind in a years time. So sell US/rent UK.

[KobaniDaughters]

Unless you get priced out of the market - it doesn’t sound like that would happen for OP but where I live the prices rise fast and furious, if we sold our place that would prevent us ever coming back to the same area as rents and sale prices would be too much for us