So, you have decided to take that leap and move to a new country! Congratulations, a whole new world of adventures lay ahead! While this is exciting and beneficial for your personal development, there are lots of logistical matters to take care of before actually boarding the destination flight. Few of the many decisions we need to make involve whether we wish to sell/rent our current property out and if we want to buy/rent a property in our new sweet location. The decision you make will depend on your circumstances and property goals. Whichever options you select, knowing that you have experts helping you throughout the process can ease the logistical pain. Let’s explore the elements that will influence your choice on whether you should buy or rent when you make the move.
Determining whether to sell or rent your current home to others can be a tough gig. While there are tools (thanks to tech) these days, such as Airbnb, that makes renting it out a whole lot easier, it still does not prevent those occasional phone calls relating to a broken pipe or a roof leakage. On the plus side, these issues can be sorted out by making a few calls to arrange for the appropriate services and is often covered by your home insurance (get one!).
Selling your property
If you have chosen to sell your current property before embarking on your journey, the perks include being able to use the lump sum you’ve just received from selling to invest into your move. Additionally, despite the tech tools mentioned earlier, it could still be an added logistical nightmare to set a whole rental process in place before moving. Other benefits of selling include tax incentives related to losing the benefit of the Capital Gains Tax as well as benefitting from the tax laws in your new country. For all you know, there may be better performing asset classes in your new country during the time you decide to move.
The downsides of selling your property include not having a home base if and when you chose to return as well as losing your foot in the property market here, by facing the risk of potentially being priced out while abroad. Depending on when you chose to sell your property, you may face tax implications if you are not an Australian resident for taxpaying purposes at the time of your transaction.
Renting your property
Let’s review renting. While Airbnb has provided true homeowners with a lot more autonomy over their property these days, having your own property will mean that you always have a home to return to. Additionally, renting also has the option of moving all, some or none of your furniture over with you, allowing you to rent your place out with these flexible options to prospective tenants. As for the tax benefits, you may be eligible for the rental property depreciation tax and your property will still accrue the benefits of potential capital growths from the market.
Renting only proves to be disadvantageous if you are looking to uptake a foreign residency and forego your Australian residency/citizenship, thereby having to pay a higher land tax, which is applied to foreign residents, especially if the property resides in the Eastern states of Queensland and Victoria. Other than this, the logistical mess of finding a property manager, especially when your deadline to leave is short, can prove renting your property to be a bad option.
While it is stressful to decide this, having specialists, such as removalists like Palmers Relocations and tax agents, can assist in your decision-making by providing you with the correct advice. More often than not, leasing the property out is the popular option that many Australians chose. This can only be smoothly done if you have a reliable property agent, who will look after the needs of your tenants and the property. Some of those who chose to sell it off have selected the option to save some of the equity funds into their superannuation account, thereby reaping the benefit of the $450,000 limit on after-tax contributions, which would equate to having a tax-free amount sitting in your pocket – perfect for retirement! Whichever option you select, know that we are here for your relocations needs, and we can provide expert services and advice on how to optimise your life-changing transition.
Like it was not stressful enough already to decide what to do with your property in your home country, having to decide on what you need to do for your housing situation in your new country is another hill to climb. Most often, new expats or migrants will stick to renting at the start, using this time wisely to study the property market and seek tax advice. When they are ready, they would then look at making the purchase.
Duration, the main factor
Your decision on your housing in your new country would depend on the length of your stay there. Most expats tend to stay for assignments/secondments for less than 3 years on average. As such, renting seems more favourable. However, buying a property in a new country can seem enticing, and the benefits include being more anchored in a new country with a property under your name and enjoying the benefits of the property market of the country. Other benefits could include enjoying more favourable tax laws, depending on the country and enjoying the benefits of a new area. However, the pitfalls of buying a property in a new country include taking the time to understand the country and the area of the property (such as safety, culture and transport), and taking to time to understand the laws and the regulations behind how to buy a property.
Buying or renting – it is a hard choice to make! Whichever option you select, it depends on your situation, and which perks matter to you most.
Ensuring that your things are relocated well does not only ease the process of your transition logistically, but it can make you much more relaxed and focused on the thing that actually matters – writing your new chapter in life!
We are here to help you with your relocation needs. Contact us at palmersrelocation.com.au for a customised quote.