UK to Oz – sensible strategy?

Hi all

I’m pretty new to this game but after too much procrastination, i’m now driving my wife crazy with an obsession in property investment and positive cashflows rather than merely paying off the mortgage as the key focus.

I am currently living in the UK and am now a declared UK tax resident and have a ~35% equity interest in our apartment which is valued at around A$950k-1,000k. We are now looking at returning to Australia in 12 months time.

My current view is that as a first home buyer in Australia I should look to purchase a property for ~A$500k to take advantage of the $7k government grant and also waive the NSW mortgage duty of around A$19k. My plan would be to turn the current UK residence into an IP, purchase a property now (some negative gearing advantages for future Australian income) and live in it when we return to Australia for 6 months until we get the thumbs up for the grant and to also scout around for a home of our own. The A$500k residence would then also become an IP going forward.

However, I’m not sure if this is actually sub-optimal and whether I’m being driven too much by the government grants and waivers as well as the tax advantages, or if this is actually a sane strategy. That is, should we instead just continue to pay off the UK mortgage as quickly as possible.

I would more than welcome any words of advice, tips, tricks, or general comments that may spring to mind…

Thanks everyone.

[biggrin]

UK Man