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Buying property back in UK whilst continuing to work abroad

Discussion in 'Teaching abroad' started by spanboy, Sep 13, 2019.

  1. spanboy

    spanboy Occasional commenter

    I work in SE Asia and am looking to do so for the next 7-8 years hopefully. We are selling property we have in Spain and were thinking about putting the proceeds into buying a house back in UK as cash buyers with a view to retiring there eventually. Just thoughts only at the moment.

    As we've not lived in the UK since 2006, I'm a bit rusty re: what bills/taxes etc etc we would be liable for each month/year. Has anyone done this same move recently, and if so, has it worked out ok or have you regretted it? Brexit is also an indirect consideration too, I suppose? We wouldn't be UK residents so don't know if that would be against us financially?

    We would be looking to rent the place out over the next few years. We have a friend who we trust who is relocating back to Blighty in early 2020 for retirement who has said they would want to rent from us.

    Many thanks in advance
  2. taiyah

    taiyah Occasional commenter

    As cash buyers you're already in a better position than... Well... Everyone. So congratulations.

    As for the practicality of things. The usual:
    - council tax: will depend on where and the size of the house. Just google your desired council. But this is paid by your renters. If it is a holiday let it's you who pay
    - landlord insurance: never skimp on this despite the fact that your potential renters are your friends and are trustworthy
    - stamp duty: none, if this is your first (ever) purchase, if not, as a citizen you'll get the citizen %.
    - you get a tax free allowance of £11800 (2018-2019), any rental income above that is taxed. Just fill in an SA every financial year
    - yearly gas check and certificate £25
    - electrical check and certificate every 5 years
    - smoke alarms are mandatory, I went beyond and installed a fire blanket and a small extinguisher in the kitchen.

    As for Brexit. That's a how long is a peice of string conundrum. As cash buyers you're in a great position to negotiate the price.

    If you have a British passport AND a UK address as one of your proof of identity then you should be entitled to property duties and taxes as a citizen.

    My husband and I bought our 'retirement' cottage in the west country two years ago and have no regrets. It is the location we'd most likely retire. It's tenanted and is looked after by a reputable agent.

    My last bit of advice, there are times where even family and money don't mix. Either get a solicitor to draw you up a rental agreement or for £50-60 a month list it with an agent with your friends as renters.

    Best of luck!
  3. Penny10p

    Penny10p Occasional commenter

    Taiyah can you explain what you mean by stamp duty - none? Why would they not have to pay stamp duty?
  4. spanboy

    spanboy Occasional commenter

    Thank you so much @taiyah for this insight. Much appreciated! Re: property taxes and duties - do you mean we would be taxed at citizen rates if we have UK passports (which we do) and have EVER BEFORE owned a property there and can supply a utility bill (for example) with our names on it?
  5. taiyah

    taiyah Occasional commenter

    Wee bit complicated than that. I hope below breaks it down.

    Stamp duty:
    • is divided into 2 major sections, foreign and residents (including citizens).
    • This is again sub-divided if you've purchased a property before. It will still be residents tax bracket but higher % if you've purchased a property before.
    • It is again sub-divided on the price bracket. Higher the price, the higher the duty.
    For some reason I can't paste the direct link but go on uk.gov and search 'Stamp Duty and Land Tax'.

    All of this will be calculated by your solicitor including all the documentations they need. They will eventually decide which one you'll fall under (part of their role). Hence, having an address in the UK with your British passport will be in your favour.
  6. 576

    576 Established commenter

    Owning property from afar can be a real hassle, even if you use an agency.

    I wouldn't advise people with a property to sell it, when moving abroad, as it is a long term investment. But I wouldn't encourage those already overseas to buy at home.
  7. taiyah

    taiyah Occasional commenter

    It's a hassle if people don't budget for running costs and the property is not properly insured. Personally, I allow £1000/year for running costs and repairs. In the last 2 years came to £800.

    Not buying a property whilst overseas.... Getting an expat loan can be tricky. But there's a rule my parents have always taught me... Simple things in life you need shelter, food and water. My first shelter was (still is) a terrace house purchased in Hackney when everyone thought Shoreditch was the beginning and end of East end London. Everyone knows how this simple advice of having a roof over your head has and continues to turn out.

    If anyone has the means to buy a property.... Do it!
  8. taiyah

    taiyah Occasional commenter

    First time buyers who buys a property for residential or to let under £200k does not pay the stamp duty. An outstanding perk to take advantage of! £200k and under was a purchase ceiling in the 2018-2019 financial year. This may have changed for this fiscal year (2019 - 2020). Check uk.gov search Stamp Duty and Land Tax. Again, as for my new'ish comment above, your solicitor will determine this.
  9. Wotton

    Wotton Lead commenter

  10. tb9605

    tb9605 Established commenter

    Have you sold it yet? It's not exactly a sellers' market here in Spain at the moment. I suppose it will depend on what you are selling and where, but there are sooooo many properties on the market at the moment.... and yet people are still building new ones! It's crazy.

    Great for buyers - we got ours for 40k under the asking price (and 60k under what the previous owner had paid for it). Yet the bank still valued it as 8k less than what we paid for it - that's a 68k drop in value over 12 years, despite myriad improvements by the previous owner.

    So, if you aren't in any rush, I'd hang on to and rent out your Spanish property (in our area, there are about 100 houses for sale for every 1 available for long-term rent - I'm not exaggerating) and see what the Spanish property market does. I imagine that Brexit and the weak pound is spooking a lot of potential British buyers.
  11. the hippo

    the hippo Lead commenter Community helper

    You will, I am sure, be pleased to know that there are still plenty of properties for sale in the beautiful Bulgarian countryside for twenty thousand pounds or less. Who wants to bother with silly things like Stamp Duty, mortgages and Council Tax?
  12. spanboy

    spanboy Occasional commenter

    We have 2 - one has just sold; the first person who viewed bought it. The other will sell soon I'm sure, as it is a great property at a good price. In our area demand is exceeding supply.
    tb9605 likes this.
  13. spanboy

    spanboy Occasional commenter

    Maybe not everyone wants to live in Bulgaria?!
  14. taiyah

    taiyah Occasional commenter

    @the hippo if you're not getting paid by the Bulgarian government you should almighty one.

    My family and I go to Borovets to ski and have made friends with (20 year veterans) British expats who continue to live there. Beautiful country but the reality is, with the language barrier and the mafia having such an influence on developed or developing areas. Being a tourist is our preferred status. In regards to development, Krakow, Poland has evolved a lot faster than the capital city of Sofia.

    Taxes are a part of life. When we retire, we will have the opportunity to to and fro between London living and the west country life.. If it means paying council taxes to both counties and paying £2/L for petrol then so be it...
    tb9605 and spanboy like this.
  15. the hippo

    the hippo Lead commenter Community helper

    Yes, taiyah, I might buy a property in the UK, if I could afford it. But I can't. Many teachers these days cannot afford a property in the UK and the prices (and the taxes) just keep going up.
  16. amysdad

    amysdad Established commenter

    One thing about the Stamp Duty - if you are buying the property as a first time buyer, you have to have a UK address to get the discount otherwise it is fully applied.

    Personally, I'm with the hippo on this - unless you are determined to move back to the UK, then property is way overpriced and far too prone to boom and bust to do anything. We've bought in France; we'll probably look to other countries to plug a gap, and we'll eventually get everything out of the UK.
  17. markedout

    markedout Occasional commenter

    Since you are already familiar with Spain, have you thought about Gibraltar as a retirement or rental option? Demand for rental properties there is extremely high and there is significantly reduced stamp duty for first time buyers. However, you will be liable to income tax, although of course you can offset your expenditure on furniture, agent's fees etc.
  18. the hippo

    the hippo Lead commenter Community helper

    The Sage of Walmington-On-Sea, aka the Captain, bought a property in Spain, but a long way from the coast. There are heaps of charming rural properties in Spain that are going for a song, if you stay away from the big cities and the tourist traps. Some of them are a bit dilapidated, of course. Yes, I know that I do go on (and on) about a certain country in SE Europe, but the truth is that there are still lots of places in Europe where property is absurdly cheap (and you will probably get some lovely views and some good local vino thrown in). Yes, I agree that rental income is a nice thought, but of course you might not want someone living in your home and using your things.

    taiyah, I agree that taxes are a part of life. The Bulgarian equivalent of Council Tax for our country house is 44 leva (that is about twenty pounds) per year.

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