I am a UK citizen and I have converted over from a 417 (Working Holiday) to a 457 (4 year Employer Sponsored) visa.

My new 457 job is based in Sydney.

I rented back home and I dont own a house or have a mortgage so therefore wouldnt qualify for LAFHA. (The ATO confirmed this for me personally over the phone)

I am renting in Sydney for the time being but obviously it would be more economical to purchase a property (with FIRB approval, of course) in the hope that house prices would rise and I would get a return to invest in more Sydney property or to take back to the UK when my visa expires or before that should my employment be terminated early for any reason.

I am exploring the advantages/disadvantages of buying a house in the UK, and renting it out, or buying a property here in Sydney.

If I buy in Syndey it is more than likely I would purchase an apartment as my salary is in the AUD$70,000 mark and thats all I could sensibly afford and I am single, no children so space is not really important. I have been looking at Balmain, Kirribili, Neutral Bay and generally Lower North shore for easy ferry access to the city. I hear commuting into Sydney by car is a nightmare ?

Would there be any tax implications of buying and renting out in the UK whilst I worked here in Australia ?

If anyone has any suggestions, advice or thoughts on my intentions regarding the above strategy please feel free to share them.

Thanks.
N.

Hi there,

If you buy in the UK and rent it out, then you will have to complete a UK tax return every year. However as a UK national you will still get your personal allowance and so pay no tax if your profit from letting is less than the personal allowance.

HOWEVER you WILL have to declare your UK profit in Australia also, and you won't have a tax free zone here as you will have already used it with your normal income. Assuming 5000 pounds (max UK tax-free profit) equates to approx $12,000 here, this may be enough to push you into the 47% tax bracket, so you end up paying up to $5640 in tax !!

Also you have to weigh up the hassle of controlling an agent/tennant from 10,000 miles away. We have had a really rubbish agent who never pays the money on time and does f**k all about regulating the tennant. We cannot wait to sell our house and get the money over here !! Believe me its not worth the hassle unless you have a very good friend/family member who can keep an eye on the place and maybe even do some repairs for you. Maybe even be the agent on your behalf.

As for your LAFHA requirements, I didn't own property when I lived in the UK, I rented there. I don't believe there is a requirement to have owned property in the UK to get LAFHA, just that you have moved here to work and still have the intent to go back home when your visa expires. Did your employers offer LAFHA as part of your employment package ?? You cannot claim it on your own - it has to be employer instigated/controlled/