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Moving to Spain, letting my house
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Scarum
Posts: 111 Forumite
Hi
Can people give some help from their own experience on letting out a house while living abroad?
Realistically I plan to live in Spain for the forseable future.
I have never let out property before and think using a third party agency is the only way to do this. My house is a village located 2-bed terrace near Cambridge, I think it would let for £600 a month.
Can anyone advise on what a letting agency's fee would be?
My current mortgage is very low, 6 years remaining, £192 a month. I have made a rough calculation that after fees, insurance etc... that my annual income from letting this property would be under the income tax personal allowance, so I think I would not need to pay income tax on this. But I have read that agencies will deduct tax unless Inland Revenue say they do not need to. I suppose I need to contact Inland Revenue on this matter closer to the time I plan to move especially with regard to double taxation treaties with countries like Spain.
I appreciate any help on this.
Can people give some help from their own experience on letting out a house while living abroad?
Realistically I plan to live in Spain for the forseable future.
I have never let out property before and think using a third party agency is the only way to do this. My house is a village located 2-bed terrace near Cambridge, I think it would let for £600 a month.
Can anyone advise on what a letting agency's fee would be?
My current mortgage is very low, 6 years remaining, £192 a month. I have made a rough calculation that after fees, insurance etc... that my annual income from letting this property would be under the income tax personal allowance, so I think I would not need to pay income tax on this. But I have read that agencies will deduct tax unless Inland Revenue say they do not need to. I suppose I need to contact Inland Revenue on this matter closer to the time I plan to move especially with regard to double taxation treaties with countries like Spain.
I appreciate any help on this.
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Comments
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I used a (dreadful) letting agency but that`s another matter.No they didn`t take tax at source,my accountant worked it out at the end of the year and it was treated as extra income to my business profits.
Be sure to add in periods when the property isn`t let,renewals and replacements.An agents fee should be between 10 and 15 per cent of the rent.
Like me,you would be an absentee landlord so it really is important that you seek quality tenants and a good letting agency.I didn`t had had serious grief.
Tell me,as I am also that fed up with living here,what are your plans for Spain.I go there a fair bit and am thinking about making the move.Do you intend to work<buy a property or rent?I have friends there living on around £120 a week,it`s a struggle but certainly without housing costs £200 per week is very doable.0 -
The most important thing that any potential landlord can do is choose their tenants very very carefully.
1. Get Referencies.....bank, employer and previous landlord.
2. Take out rent guarantee insurance.....its not expensive.
3. Get a guarantor.
4. Don't let to people with pets or children......the risk of them giving you problems are big.
5. Don't let to smokers........you won't get rid of the smell.
6. Don’t do company lets.
7. Don’t let to anyone on benefits.
8. Don't let to anyone who isn't working full time.
9. Inspect properties every 3 months.
10. Only let initially on a 6 month AST.....that way you can both part company after 6 months if you don't get on.
11. Use a reputable agent OR one who has been recommended OR do it yourself.
12. Meet your tenants personally. Make sure you ask all the right questions and gauge wether they are right for you.
13. Issue a section 21 as soon as the property is let.
14. Make sure there is an inventory & schedule of condition.
etc etc.............0 -
""No they didn`t take tax at source"" - i dont think this is right. i think if you live abroad then legally under landlord and tenant legislation you have to have someone in the UK responsible for day to day management. i also think that letting agents have to deduct tax and that it is up to you to claim a refund from teh tax man if necessary.0
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The tax aspect is important, though only 10% I would prefer not to have the hassel of claiming it back. I need to check into this further but...
If your profit is £2,500 or more or you're not on PAYE
http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_10013435
also
http://www.landlordzone.co.uk/tax/taxation.htm
but these don't explicetly say if you were living abroad and not resident in th UK.
I will be living with my girlfriend who has a good job so we will be comfortable, and while there (northern Spain) I should hopefully be able to find work in the IT industry, while waiting I could always give English conversation classes.
Naturally I will be seriously looking for a good letting agency and all the above mentioned constraints will be necessary!0 -
I trawlled the internet and founf this, read it all if you like but scroll to bottom...
http://www.middletonproperty.co.uk/page.asp?id=320 -
Moving to spain :eek: I'LL COME oh the heat and sunshine! Ok get real, I have been around the Canaries 3 times.
I would sell and s*d the hastle.
May 2008 be a new begining for us all (well would be if my house would sell)If winter comes, can spring be far behind?
Spring begins on 21st March.0 -
While a sweeping statement approach on what is a good tenant can be made, it is important to realise that there are normal, clean, quiet-living people who fall out of this list of ideals.
People are often told if they don't have a job to get on their bike and find one. I relocated 200 miles from where I used to live and when I arrived I had no job.subjecttocontract wrote: »1. Get Referencies.....bank, employer and previous landlord.
I had no previous landlord as I had just sold a house
Not everybody has a guarantor. My retired parents on Old Age Pensions wouldn't have sufficed.subjecttocontract wrote: »3. Get a guarantor.
I smoke. I only EVER smoke outside - yes even in the middle of a mid winter blizzard. I hate the smell and have an irrational fear of fire SO great I don't even like using a cooker.subjecttocontract wrote: »5. Don't let to smokers........you won't get rid of the smell.
When a tenant leaves a property they have to leave it as they found it, less fair wear and tear. Smoke stains/smell is not fair wear and tear so the tenant would be obliged to remove the stains/smells, or lose their deposit for the cost of clean up.
subjecttocontract wrote: »8. Don't let to anyone who isn't working full time.
I don't work full-time. In fact I haven't really bothered working. I work a bit temping, I work a bit from home. I have the income from my savings.
Not everybody who doesn't work full-time is a financial liability.0 -
Moving to spain :eek: I'LL COME oh the heat and sunshine! Ok get real, I have been around the Canaries 3 times.
I would sell and s*d the hastle.
May 2008 be a new begining for us all (well would be if my house would sell)
Errrm, where my gf is currently working/living, it's colder than Cambridge right now! The summer is another thing!
I have thought about selling, I know what you are saying, much less hassle. My house should sell easily, being a starter home. Then I would need to invest the capital and make a monthly return on it while negating inflation...0 -
Yes you are right.....unfortunately not everyone can meet all of the criteria.
However, although its important to be flexible, generally those that don't fit the profile don't get to rent my property.
Its all about minimising the risk of having problems and anyone who has had problems with tenants will know how much time, effort and money it can cost to sort out.
I find working to my list (this is only part of it, the full list is longer), works for me and has done for over 9 years without any problems.
I believe in the saying 'if it isn't broken, don't fix it'0 -
I rent my UK house out, but one of the tenants is my son and he lives there with two lodgers. This makes things much easier. If I didn't have him I would use an agent.
The tax situation is quite complicated. As I understand it, if your rent is over £100 a week or you use an agent, then either the agent, or the tenant if there is no agent, must deduct tax and keep records.
The rent I charge is less than £100 and I do not employ an agent and my income (just from my rents) is below my personal allowance therefore I do not have to pay any tax, so no-one has to deduct it for me. I have informed the Inland Revenue ( or whatever they are called these days) of this and there is not a problem.
I personally think it is a good idea to hang on to your property. Well paid, permanent jobs are hard to come by in Spain, especially rural Spain, and especially for expats and I have seen so many expats trapped because they can't make a living in Spain and can no longer afford to get back onto the UK property market. Keep your house as a bolthole.
I've just read that the OP's girlfriend has a job, so they should be OK. But just some general tips from someone who has lived in southern Spain for 3.5 years....
If you are retiring on a British pension, (Occupational or State) things are much easier and you can live reasonably comfortably. If you are of State Pension age, or on Incapacity Benefit, your medical care is free.
Be aware that the 'national insurance' contribution for self employment is around 250 euros a month!:eek:
In many areas, you will stand virtually no chance of getting a job unless you can speak Spanish.
Hope this helps!(AKA HRH_MUngo)
Member #10 of £2 savers club
Imagine someone holding forth on biology whose only knowledge of the subject is the Book of British Birds, and you have a rough idea of what it feels like to read Richard Dawkins on theology: Terry Eagleton0
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