Should we sell or rent out
Fri, 16/05/2008 - 15:51
Renting
You'll need an agent to administer it for you, taking up to 15% of the income and any work that needs doing they will get premium rate contractors if you are over in Spain. However you can use the income to maintain the property and it is tax deductible. If you both earn the income left will be fully taxed. Your income stream from the UK will be subject to the vagaries of exchange rates.
Selling
You have got rid of the constant worry of a house over here. Yu will pay tax on all the interest from your sale. If you sell you cut yourself off from the British property market - When it recovers it will go crazy again and you never know if you'll want/need to come back. If you are under the retirement age are not working but resident in Spain you will not be allowed access to Spanish health care.
Wed, 11/06/2008 - 14:14
agree that in long run it is better to have a house in UK as potential for big growth, but you have to ask yuorself if it is worth the stress? personally i would be inclined to sell, as if you can't find someone to rent it out or if they turn out to be tenant from hell (it happens!!) then it could put a dark cloud on your retirement. maybe you should get your son to manage the property!!
Fri, 13/06/2008 - 05:32
Note there is a potential gains tax hit, i forget quite how it works but even if the value of your house falls while it is rented, the revenue will say, purchased by you 12 years ago for 100k sold after 8 years of living and 4 years renting therefore 4/12 ths of the gaun (less allowances) is gains tax liable, even if all of the gain in reality was made while you lived there.
Now this is old information and may have changed a little but understand it before you rent.
If your son manages the property he will have to declare your income to the revenue and with hold tax from the money and "he" will be liable for the bill if you dont pay it(so if your xmas present is no good, you can get him back)
If you register with the revenue you can recieve your rent gross.
You cannot hold a rental deposit unless you join 1 of the new gov run deposit schemes, frankly renting is becoming a pain in the xxxxx, and i do it for a living. Remember you must get gas and elect safety checks done, etc etc.
If you folks/your son are "hardy" and good with organising things/money go ahead, many do and do it well, if you find such things tough, use an agent or dont do it.
There is a regulation for everything these days, in fact i think i have exceded the gov daily allowance for use of finger tips in typing this note
Fri, 13/06/2008 - 05:34
Sorry missed a bit on 1st post
Note there is a potential gains tax hit, i forget quite how it works but even if the value of your house falls while it is rented, the revenue will say, purchased by you 12 years ago for 100k sold after 8 years of living and 4 years renting therefore for 200k, 4/12 ths of the gaun (less allowances) is gains tax liable, even if all of the gain in reality was made while you lived there. Now this is old information and may have changed a little but understand it before you rent. If your son manages the property he will have to declare your income to the revenue and with hold tax from the money and "he" will be liable for the bill if you dont pay it(so if your xmas present is no good, you can get him back) If you register with the revenue you can recieve your rent gross. You cannot hold a rental deposit unless you join 1 of the new gov run deposit schemes, frankly renting is becoming a pain in the xxxxx, and i do it for a living. Remember you must get gas and elect safety checks done, etc etc. If you folks/your son are "hardy" and good with organising things/money go ahead, many do and do it well, if you find such things tough, use an agent or dont do it. There is a regulation for everything these days, in fact i think i have exceded the gov daily allowance for use of finger tips in typing this note
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We have just completed on an apartment in Spain in which we intend spending most of our retirement time. We have taken out a Spanish interest only mortgage (2 years) on it, with the view to selling our present house in the UK within that period and then to pay Spanish and UK mortgages off in full. Due to the present housing slump situation, our son is trying to persuade us not to sell but to rent it out. House is possibly worth a max £250,000 with a mortgage at present of just £35,000 approx. I think we could get rent of approx £750 a month which would cover our present two mortgages comfortably. My husband is very reluctant to rent due to the worry of possible problems in finding the right tenants and any taxes which we would incur by renting out. Your advice would be appreciated.