Buying a property overseas
When faced with international relocation, there are a number of things that need to be considered and that can seem a bit daunting to begin with.
Most of these issues can generally be sidestepped with some forethought, planning and good advice with the purchasing of a new home no different.
What exactly are the things to keep in mind when buying a new house abroad though and what should those moving overseas look to avoid?
Finding a property.
As with acquiring property domestically, buying a house in a new country will often start with a scour on the internet. That’s fine for an initial impression of what can be out there in your new territory.
However, somewhere down the line it’s wise to try and pick a reputable foreign estate agent with whom to purchase a new house. While the internet can be great for some things, it can also be a little inflexible and impersonal, especially for a home purchase.
A good estate agent will be able to find houses more finely tuned to your criteria and will be able to offer you not only more info about specific properties but about the area and any legal information.
If possible, it’s also not a bad idea to try and plan ahead so that you have time to visit any potential new homes. Photographs and videos can help to build up a picture but nothing can quite compare to walking around a new house.
Visiting a property before purchase is essential, and buying based solely on images is never recommended.
It’s also worth remembering that shopping around can also prove vital at a time when other finances can often be stretched. This means in terms of house price itself, as well as mortgages and currency.
For a full list of agents who have overseas property divisions as well as other resources you can visit the Association of International Property Professionals website.
One piece of advice they have reads as follows: “Ask lots of questions. 3 year old children are known for asking lots of questions and you should follow their lead when talking to agents about a purchase.
What to do about a mortgage is a question that will be different for many families. Some will choose to remortgage their existing home while others will look take out a mortgage overseas.
Both will be applicable for various families but again, forward planning and knowing your options will help ensure you make the right decision for you and yours.
You can even borrow money from a UK bank. Despite this generally coming from banks with branches in that country, it still classes as a bank in the UK and is protected by Financial Services Authority regulations.
Securing a mortgage in the UK will generally prove easier but if you do opt to get one abroad, then there’s no reason to fear. There are just a few things to remember.
For instance, given the global downturn, many countries have found that lending conditions have been toughened up. That’s especially the case in parts of Europe and so a mortgage could prove tougher to come by.
You will also need to prove a tight set of documents in order to prove you can afford the loan, especially when you get into the higher echelons of loan to value.
Generally overseas movers will find that interest rates when it comes to mortgages abroad will be a lot lower than those witnessed in the UK. That said, it’s still advisable to shop around to get the best deal.
Which? advises that a certain amount of cash needs to be set aside in order to cover fees such as buying costs, mortgage and lawyer fees as well as insurance.
The website suggests thinking of it as a percentage of the property price, around ten per cent for France and Portugal, 12 per cent for Spain, 15 per cent for Italy and five per cent for the US.
Once you’ve sorted your mortgage and picked a place to live, it’s time to get tax affairs in order and this can be equally as tricky.
Essentially the rules state that you will have to pay capital gains tax on the property when you sell it should it not be your main home, but this can be waived in some regions depending on how long you’ve owned the property.
When it comes to council tax, you’ll be liable for whatever the local equivalent is. Upon living abroad for over half a year, your status as a UK tax resident will expire three years from then.
As with most headaches when moving overseas, property issues can be calmed by planning ahead and doing your homework. Using reputable agents in your country of choice is also vital.
They’ll be able to guide you seamlessly through some of the nuances that may exist in buying homes abroad.