5 Tips For Buying Property Abroad
Buying a property abroad can be an exciting, but daunting prospect. What sort of money should you spend? How will choose a reputable solicitor? What taxes do you need to take into consideration?
Recent months have seen a strong interest in the amount of people looking to buy property overseas. Especially in Europe, where the pound is much stronger against the euro than it was a year ago, there has been a steady rise of British buyers looking to invest in foreign property.
However it doesn’t always go to plan. We have all heard horror stories of how buying abroad can go horribly wrong. After all, it’s easy to get lost in the minefield of paperwork that is ‘buying abroad’.
Give yourself a better understanding of foreign property buying dos and don’ts and check out our top five tips if you’re thinking of taking the leap and purchasing a home abroad.
Image courtesy of Juan Pablo Ortiz Arechiga
It sounds obvious, yet so many people get carried away with the romance of owning a property abroad and don’t put in enough research before they make the jump.
At the very least, you should visit and explore the country before you commit to making a purchase. If you’re planning on living in the property yourself, visit it in different seasons so you know what to expect during high season, as well as when the tourists go home. Remember, plenty of resorts pack up once the last tourists have packed their bags.
Speak to other Brits living in the destination and try to find an online community who will be able to give you frank advice about the area and what to expect.
Remember to also check out local transport links in the area and don’t rely on budget airlines to always fly to your destination.
Many of the horror stories you hear of eager Brits looking to purchase a home abroad surround the misunderstanding of native law and language barriers.
It’s crucial that you can work with people who you trust to overcome this. Use a reputable expat forum to find a recommended translator. Be wary of translators who contact you in the first instance, despite how helpful they might seem.
If you are dealing with a British estate agent, make sure they are able to practice in the UK and your chosen country. You should also ask if they have had experience of buying and selling abroad. If you are using a UK lawyer, make sure they are registered with The Law Society. This is the independent professional body for solicitors
Keeping a sharp on your finances goes without saying, but this is even more important when it comes to dealing with businesses abroad, which will operate under different laws and regulatory bodies than the UK. It’s worth getting familiar with The Association of International Property Professionals (AIPP). This association is working hard to introduce regulation into a largely unregulated area and is a great place to start if you’re looking for unbiased advice.
Once you have chosen your ideal property, it’s advisable to set up a bank account as soon as you can, or you face having to incur charges to transfer money abroad.
Once your bank account is active, set up direct debit payments to manage your bills. Any missed bills will result in large fines, so keep ontop of your payment schedule and check your bank activity regularly.
Tax laws differ across the continent, so invest in a reputable tax advisor who can explain all the details. For example, if you’re in the United Kingdom and you advertise your foreign property to rent, you will be liable to pay tax in both countries.
Image courtesy of oatsy40
Inheritance laws differ in different countries. For example, in France, children automatically inherit the property, instead of a wife or husband. Think about drawing up a will in your chosen destination so you can have peace of mind that your property is inherited by the right people. In fact, in countries such as Spain, making a will is mandatory if you want to buy a property.
Be aware that on top of the usual costs we are familiar with in the United Kingdom when it comes to buying property, there will also be further costs involved.
These could include:
- Chartered and quantity surveyor fees
- International bank transfer fees
- Power of attorney fees
- Translator/interpreter fees
- Utility connection fees
- Shipping and storage costs
With careful planning, some of these costs can be drastically minimised. When you are preparing to move, think carefully about your storage solutions. Choose a space big enough for your possessions, but not too big, or you will be paying for dead space.
Other ways of cutting costs include getting quotes from translators, or asking them to work for a fixed fee, rather than by the hour, so you don’t have any nasty surprises when you receive their bill.
Investing in a foreign property can be a great move. Just make sure you do your research and don’t be afraid to ask questions every step of the way.