Renting Out Your Place and Moving Abroad
If you’re planning to move abroad for at least a year, renting out your home is a brilliant way to maintain your roots, your property and make a little extra income. Sounds perfect, but there are a few things you need to know before you start packing:
Who looks after your home and your tenants?
You can do this yourself, get friends or family to do it, or go through a letting agency. DIY is hard work as you’ll be responsible for everything – from a distance. Family and friends mean well, but usually lack the experience and resources to do the job properly, so the best solution is a property management company. You’ll pay 10-15% of the rent in management fees, but it’s well worth it.
Rental income from your UK property is seen as UK income, so you’ll have to pay UK income tax once it goes over your personal allowance.
The Non-resident Landlord Scheme
The scheme collects tax from expat landlords at source. If weekly rent exceeds £100, then the tax is deducted by the letting agent or by the tenant before it reaches the landlord. Non-resident landlords can apply to receive full rent, but they’ll still have to declare it in their annual tax return.
Let your mortgage provider know
Talk to your mortgage company before you make any firm decisions, as renting out your property and living abroad may breach your agreement. This can have serious consequences like repossession.
Think about currency
The rent is a fixed amount in sterling every month, but it will fluctuate once it’s converted into your local currency – sometimes wildly. Be prepared for this and plan your finances accordingly.
Get expat landlord insurance
Your property must be fully covered before you move, especially if you won’t be able to get back to the UK easily. Expat landlord coverage should include buildings and contents, arrears, repossessions and contract disputes and legal costs as well as cover for malicious or accidental damage and the resultant repairs.