Managing a UK property while living in Germany

Hi there,
I wonder whether someone might have encountered similar problems and how you might have dealt with them:
I own a small property in the UK which up to last year I have still used as kind of a holiday cottage when I had the time go get there at least 4 or 5 times a year. Now unfortunately I won't be able to get there that often.
However, I do not want to sell it for various reasons so I am thinking about renting it out - ideally as a holiday cottage (it is situated in a pretty village in the Westcountry).
But before I can do so it will need to have some work done and I won't have the time to oversee all this in person. There is also currently a lot of personal stuff and clutter in there which of course I will need to clear out first.
Now I have heard loads of horrible stories about agents which did not care at all and people being ripped off by contractors hired by those agencies...

So... any ideas anyone?

OK the politics first.

Please don't rent it out as a holiday home. Particuarly in the most popular parts of the West Country there is a severe housing problem
made worse by the use of residential homes for holiday letting.

I rent out a house in the West Country and I use a local estate agent as my letting agent.
They find the tenants and do the contracting and are the contact point for the tenant.
They can pass on any work needing to be done to a local contractor but you need to be careful there.
I pay 10% of the rent PLUS VAT as their charge, you can also choose to pay GBP X per single contract but that can work out more expensive if the tenants are there short term.

Letting it on a longer contract would be simpler than holiday lets. The overall wear and tear should be less too if a good tenant can be found.

Letting agents vary a lot. If you have time, go through the yellow pages and talk to some on the phone. The charges vary, the choice of extras to charge varies and the competence of the agents varies enormously. Ask a lot of questions and make your own judgement about the quality of their answers. Let them send you their information packs. If you are abroad they will offer you a total management service. Some of the extras are legal requirements such as gas safety checks and from this month there are new regulations about how a tenants deposit is held which will be an additional service to pay for.

Most agents will be prepared to put your stuff into storage and recommend what work needs to be done before letting the property. If there is major work to be done then it may be better for you get some quotes yourself too, again a bit of time with the yellow pages will help. If the agent arranges work then take the time to contact the contractor yourself and get the quote confirmed.

The gas safety check is very important, it MUST be done annually on all gas appliances by a registered gas engineer and certfied legally.
So you can't get your mate Fred from the pub to do it for cash; not that that kind of behaviour EVER goes on in the building trade of course.

It really is though not JUST money for old rope though. Be ready for extra annual costs that will ammount to thousands - of UK Pounds.

The extra costs caused by the new Tenancy Deposit scheme, not to mention the extra aggro of having a extra thorough inventory, can be avoided if you don't use an Assured Shorthold Tenancy. So if you don't intend to live in the house yourself again it's not a bad idea to avoid the AST. It makes the tenant a sitting tenant but you can have a clause raising the rent annually.

You'll be lucky to find an agent that isn't skimming a bit off the top for any work that needs doing though, there's not much you can do about that. The Gas safety Certificate (about £55) is a legal requirement, as was already mentioned, and it is also illegal for any furniture not to have fire safety tags.

Any agent is also legally required to withold tax (I think at 25%) if you have a non-UK address unless they have a form from a UK Accountant exempting them, but using a friends UK address is less hassle.

Good luck!

Other way around:
You can self-certify that you are exempt from the agent having to draw in the tax by declaring you are non-resident in the UK.
A decent agent will have the forms or point you in the right direction of the relevent office: Glasgow for a house in the West Country in my case.

Hi Ben-R

The form is called an NRL1 - (Non residential landlord) and can easily be downloaded from the Inland Revenue Website and filled in. There is also a very interesting information sheets about the form which tells you all you need to know. (All 88 pages - but doesn't take long to read, really - most doesn't apply)

Also the NRL Helpline folk were excellent help when i called.

Is the house in your name only? If not (ie -wife) you should both fill in a form (if she is abroad with you) so that your profits for the year are broken into two to make sure you are below the NRL taxable bracket (I think its about £5250 a year - but don't quote me on that) remember to deduct ALL expenses including Interest Paid on your mortgage for the property and ANY other deductions, ie agents fee etc.

You wont be able to let it out as a Holiday Home unless you have some one to do the Guest Turnarounds for you. Best to let out full time unless you have a professional managing it as a Holiday home on your behalf.

Also, make sure the get the best package from your letting agent.

Good Luck

You can also deduct 10% of the gross rental income as wear and tear.

Obviously the UK gets "first crack" at taxing this unearned income. If you are below the UK threshold then that is dandy but...

You then have to declare this unearned income here in Germany, and it will be taxed of course at your highest current rate 'cos it is income on top of whatever you are currently earning.

Ahhh - I love tax.

Not according to my German or my English accountant.

Can you write off the costs in Germany and can it reduce your German tax bill if in fact it is a "loss" making exercise
ie. the costs + mortgage payments are higher than rental income?