To rent out or sell house as we're relocating - please help!

[RandomMess]

So we are planning to relocate this summer and we haven't got our house on the market yet!

I am starting to think we should rent out our current home and then rent where we are relocating to.

We will get more for renting out our house than we will have to pay where we are going to - perhaps even enough to cover our mortgage payments!! Plus we will be living in a bigger home

What happens with the income on renting out our only property - what is deductable against it etc. etc.

I'm just not sure I can handle the stress of buying and selling in a tight schedule especially with schools involved!! Will the cost of renting be worth avoiding a mistake of buying in the wrong location etc.

Just after thoughts, experiences, stuff to consider etc...

You need to register for self assessment for tax. When you declare the income you are able to deduct mortgage interest (but not any capital repayment), fees such as agency(could be just tenant finding or a full service ) , gas service/certificate, maintenance costs (but not improvements), sundry costs such as insurance, inventory clerk etc then you are liable for tax on the balance. Do bear in mind that there will be periods of unoccupancy for which you become liable to arrange and pay council tax, utilities etc plus the logistics of organising repairs and inspections if you choose not to take a full service contract with an agency. As a ll you have responsibilities legally for ensuring the deposit is correctly lodged in a scheme and the tenant give the details , annual Gas Safety certificate, the property meets standards for fire retardancy, safety and so on. The agency may offer to do these but the legal onus is on you to ensure it is done.

Are you a LL???

What is the difference between maintenance & improvements??? Would replacing like with like just be maintenance - so the double glazed window needs replacing, I replace with similar - that is maintenance?

Is it tax at 20% on the balance?

What is your gut reaction, is a difficult/ a lot of work when you're living long distance?

Our current home is in the south east - so actually hanging onto it may not be such a bad idea...

as you'll see from many other threads here, renting out a property is a business and as such can be a load of hassle.

the income is taxable like any other, at your tax rate. Work on agency fees at 10%, £500-odd set up costs for lease, inventory, gas cert etc, plus all the insurances you'll need; landlords buildings, contents (inc malicious damage), legal expenses, rent guarantee. Also maintenance and repair, on call all the time. Not the tenant's problem if you go away for two weeks and their boiler breaks down.

if the current place is mortgaged you need to inform your lender, your rate may go up.

the simplest solution is to sell yours and then rent in the new area while you check it out.

Yeah specialsubject I think that too - it's whether dh will agree!!! Also means will lose our current mortgage deal (either way) which is a shame

We were, by default, while aboard temporarily . Like for like replacements are maintenance as is redecoration after a period of time, improvements would be things like a conservatory, kitchen or adding an ensuite. There may be an allowance for wear and tear too on furnished elements such as carpets. If you already use your 10k allowance then it is taxed at 20% or Higher rate if your total income goes into that band. hence the tax return. If property is jointly owned you can split the income 50:50.

Just realised it means if one of us isn't able to get a job it would at least be some "income"

I guess I just think in a few years time our dc may end up back down here for work!!

Argh, property, what a nightmare all around!

I sold up and rented when I relocated. I found the school I wanted then looked for a rental in that area. It was very straightforward and I couldn't be bothered with the hassle of buying.

LOL - love it Llareggub, bigger issue is a lack of great schools with spaces where we're going

oh, one more thing; if you no longer in the house it will attract CGT liability when you sell it. There are various allowances and rules, but as it stands if it is rented for more than 18 months then CGT may kick in.

Even if it's only owned home/property we won't buying another one unless we sell it!

yes, unless you actually live in it as your 'principal private residence' it does attract CGT.

that said - the gain is calculated on the time from the rental start until the sale, (less those 18 months) you have 10k CGT allowance each and various other expenses are deductible.

this is the current position, check the small print of each budget.