Things to Remember

Buying a property abroad can be an exciting, but sometimes a stressful experience. Here are some tips to help you get through without too many headaches. OWN A HOME ABROAD is here to help you through every step of the way.

Where?

You need to decide where you want to buy your property abroad. This decision is linked to why you want the property and how you are planning to use it. If you just want a base in your favourite holiday spot, it's a pretty straightforward choice. If you're investing for a good rental or re-sale return, or planning your retirement abroad, you have to be aware of the facts, either way give us a call, tell us your plans and we can help you.

What?

What sort of property do you want? A city dwelling, an apartment close to the beach, or a private villa with a pool? Perhaps you'd like to renovate a farmhouse or build your own home on a plot of land. Decide what you want before you go looking. If you want to rent it out are you looking at holiday lets or long term tenancies? Is there a market? The OWN A HOME ABROAD team can help you here too.

How much?

Decide on your budget before you start looking for properties. We can then help you find properties where you may get more for your money. Remember to include legal fees and other administrative costs in your budget, a general guide can be found in our country introductions.

How do I Find and go to view prospective properties and how much does it cost?

Use a well-established, registered professional estate or property agent such as OWN A HOME ABROAD to help you find your property abroad. We can help you to find properties that match your requirements and we can also recommend solicitors, notaries and other professionals who can help your purchase to run smoothly. Make sure that you travel to the country and view a range of properties. We can make up a good shortlist of properties that fit your individual criteria, which will save you time and effort, without costing you a penny, then help you find flights and make all your accommodation arrangements. PLEASE be very careful about so-called fly and buy trips - the pressure to buy from the sales team - many of whom work on a commission-only basis - can be horrendous. Only go on a fly and buy trip if you are certain that you are better at refusing than they are at selling. And beware - the sales people are very clever indeed.

Legalities

Laws governing the purchase of property differ from country to country. Before you put in an offer for a property abroad, make sure you know what the local regulations are, and appoint a registered solicitor who can explain everything to you before you sign any documents. The same goes for taxation legislation and any other rules that you have to follow as an overseas buyer. We at OWN A HOME ABROAD will be able to help you with this too.

Q1 – If I buy ‘off-plan’ with then intention of selling before completion, what are the success rates for ‘flipping’ properties before completion?

It is very important to us that our short-term investors have the greatest opportunity to sell on before completion. We only recommend developments where we can be most hopeful of good year on year growth, however, we must stress that property like stocks and shares may not necessarily leap upwards in value, let us offer you properties for short, mid term and long term investment, you can be certain we won’t give you over optimistic predictions, just the reality.

We will also actively market the client’s unit to clients visiting us wishing to purchase near-complete property.

Q2 - What options are there for financing my property?

There are several ways to finance your property abroad. It is very important to have your funding in place prior to your reservation as properties are normally exchanged and completed within six weeks.

If you require finance to fund the purchase of your holiday home the two most common ways are to release equity in your UK property by re-mortgaging or by obtaining a mortgage. There are many different schemes on offer now both at home in Europe and elsewhere. It is perfectly straightforward and usually very quick to get your funding.

Q3 - Do you have details of the tax implications of my property purchase?

The taxation on your property purchase varies from country to country. For example, Margarita Island is a tax free zone but in Spain you will pay a 7% purchase tax. Just ask us what tax implications there are for the country of your choice.

Can I get a mortgage in the local currency?

Yes, but you need to be aware of all the risks. Taking out a foreign currency mortgage could be dangerous. You are exposed to currency fluctuations: the pound can move against the euro or the dollar - if it weakens, your payments will increase. On the other hand if you are buying property in another country your home will be valued in that currency so it could make more sense to borrow in that currency.

How long will it take to complete?

It depends on the country you are buying in. Buy property in France and it could take up to 20 weeks to complete the transaction. In Spain, Italy, Greece and Portugal it will average between 12 to 18 weeks.

I don't speak the language…

You will need a reputable local solicitor. We cannot emphasise this too much, it is money well spent and has saved many a client from disaster, so make sure you're getting independent advice.

Are there any extra costs?

Yes, usually there are local taxes, stamp duties etc to take into consideration. Just ask us what percentage of the sale to factor in for this and you won’t go far wrong.

What about day to day running costs?

You will be made aware before purchase whether service charges apply. You'll need to open a local bank account, as services such as water and electricity may only connect you if you sign a direct debit. We can usually recommend good local management companies that will be able to help you in running your home when you are living away. For a reasonable charge you can have peace of mind.

Are there tax implications?

Yes. If you rent out your property abroad income will have to be declared to the British taxman. Ask about the tax laws of the country you're buying in. There may be implications if you rent or sell the house. Many countries have reciprocal tax agreements with the UK so that you don't end up paying tax twice. You also need to make a will, as local inheritance tax laws may also come into play. Most of Europe is governed by Napoleonic law, which means that your children and spouse will be entitled to a share of your estate. This can create inheritance tax problems in the UK, where only assets left to a spouse are exempt from IHT. Get good advice from your lawyer or accountant.

How do I insure my home?

Ask your own home insurer if they offer a deal to insure a property abroad. Otherwise use a local agent. They will be perfectly fine you will need to insure for buildings and contents and don’t forget to inform the insurers if you are renting out the property.