Buying Property Abroad
Points to Consider when Buying a Property Abroad
Before you buy a property abroad consider the following key points:
- What the place will be like in winter/summer
- If it's a holiday home, whether you really want to holiday in the same place every year
- If you need an overseas mortgage to fund your holiday home, you will have to research the mortgage situation. Many UK lenders are prepared to consider mortgages on foreign property; however, it may be advantageous to seek a mortgage in the country you are buying.
- If you are buying in cash, whether it will cost you to remortgage your current property because you are tied into a deal with your lender
- If you will need to rent out your holiday home to generate an income. This will affect where you buy. (Some countries do not allow renting in certain areas or impose a minimum period of time for one let)
- If you do rent out your property abroad, whether you will pay someone to manage it
- What tax liabilities you will incur both at home and abroad
- If the seller has the right to sell the land
- Taxes payable - property, VAT, land, residential, inheritance, capital gains, dual taxation
- The local property buying and selling contractual process.
Listed below are the top tips for buying a property abroad from our overseas mortgage specialist
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Never sign a contract that you do not understand (for example - if it is in a foreign language)
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Always ensure that you seek specialist advice from independent Solicitors, Architects and Surveyors before considering a purchase overseas. They should be proficient in your chosen country's laws and processes and also know the specifics involved in buying a property there
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Before proceeding with the purchase (and this would especially apply to a re-sale property, regardless of age), ensure an Independent Valuation of the property is carried out, which should point out any problems with the property - ie: subsidence, damp, wiring defects - and could also possibly highlight any boundary disputes etc
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Ensure you do not inherit a debt on the property abroad before you purchase. This is something which a solicitor should be able to check – ie: If the developer has borrowed money to build the development and this amount has been allocated against each plot as additional security to the developer's bank
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Always give yourself a `cooling off` period if you see a `must-have property` and are tempted to put down a deposit there and then
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If you are arranging finance on the property, ensure that this is stated in any contract and you have an ‘opt-out clause' if the loan is not agreed (which will ensure any deposit paid is refunded)
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Try to arrange your mortgage finance ‘in principle', before agreeing to purchase the property, or before signing any contracts and paying over a deposit
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Arrange your mortgage in the currency that you earn in where possible, unless you are going to receive rental income from that property in the local currency and then this may be a possible alternative option, dependent on the lender's criteria
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Think about combining your cash with friends or family: it could bring a Villa with pool within your financial reach, rather than simply an Apartment
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Check with the Estate Agent or vendor that you are aware of the costs charged by the legal and government authorities for purchasing a property in your chosen country
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Open a bank account in your chosen country and ensure you get a Certificate of Importation for the money you bring in from your home country
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Set up standing orders in a local bank account to meet bills and taxes. Failure to pay your taxes in some countries, such as France, Portugal and Spain, could lead to court action and possible seizure of your property
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Remember that bills do not end at the asking price. Lawyer's fees, Taxes, Insurance etc must all be met in your host country and can often be more expensive.
More information on buying property abroad:
Researching buying a property abroad Why buy a property abroad?How to finance your property abroad – various options and likely costs Building a property abroad General tips for buying a property abroad Buying a property abroad with friends Choosing your new property Could buying a property abroad secure your future Insuring your property abroad Buying property abroad as an investment Living permanently in your property abroad Maintaining your property Property abroad - don't stop at Europe Property abroad - FAQs Renting your property abroad Tax and your property abroad The responsibilities of owning a property abroad The true costs of an overseas property Viewing your property abroad Legal considerations when buying a property abroad
