A guide to buying property abroad: Seven top tips
Are you thinking about buying a dream holiday home? Not sure where to begin? OnTheMarket.com reveals seven top tips to get you started.
Buying a property overseas is a major decision. It’s important to do as much research as possible and to seek independent advice. You’ll also need to bear in mind that the legal system and steps to follow may be very different from what you have experienced before in the UK.
Here, Ideal Homes Portugal suggests seven top tips for potential buyers to consider when buying abroad:
1. What will you use the property for? Consider what you enjoy doing, how you like to spend your time, what amenities you would like close at hand, and also how you intend to spend your social time. Will you be relocating or investing in a home just for holidays? If it’s the latter, will it be just for you, your family and friends or will you be buying to rent?
2. Location, location, location. When buying a home abroad, knowing the region and area that suits you and your needs best, is a must. If you haven’t visited the area before, consider spending some time there, maybe even rent for a while so you can get an understanding of what it feels like to be a local. It’s important to consider the ‘feel’ of the local area. Do you prefer the hustle of the town or the quiet peacefulness of being somewhere more remote? Also consider other factors like you would buying at home. Consider the traffic and main motorways and whether you want to be close to the beach, airport, medical facilities, shopping and nightlife.
3. Affordability. Buying abroad incurs several costs that need to be considered before going ahead, including the property price, taxes, maintenance costs, and flight costs etc. It is also good to be aware of holiday periods and how they may affect the prices in the area and your stays during school holiday periods. Establishing a record of approximate costs throughout the year will help you budget accordingly.
4. Will you let the property? Renting your holiday home is a great way to offset your yearly maintenance costs and also generate income. If you intend on renting your holiday home, you will want to consider the regions most popular for tourists during peak and non-peak seasons. Some areas can be packed, while others will be very quiet. It’s worth considering when you’ll want to stay at the property and what time of year may be the most lucrative if you choose to let the property.
5. Accessibility. How easily can you get to and from your holiday home? Also factor in if you want to wake-up with toes in the sand, high up in the mountains or somewhere in between. Do you need to be near main transport links, able to get direct flights and if so, are they cost effective? If you are leaving family behind, consider whether you will want to return often for visits or have them spend time with you? Accessibility is often forgotten when purchasing abroad but can make a big difference in your enjoyment of your new home.
6. Research different legal systems: There can be large variances in each national legal system. The government recommends that if you choose to work with a British estate agent or lawyer, you should check that they are qualified to practice both in the UK and overseas and that they are reliable and have experience of operating in the country where you intend to buy. Also check that that they are registered with the Law Society in the UK and specialise in international transactions.
If you don’t have a good understanding of the language of the country in which you’re intending to buy make sure that you get all contracts and relevant documentation translated by an independent translator and that an interpreter accompanies you to all meetings. Be wary of using a translator or interpreter that has been recommended by the agent or lawyer. The Foreign and Commonwealth Office provides lists of English-speaking lawyers, and of interpreters and translators.
You should also check that your lawyer has professional indemnity insurance.
7. Understand tax implications: Anyone looking to buy a home abroad should seek advice from a local tax expert. You may be liable for foreign taxes such as purchase tax and income tax on rents. According to Which? many countries have laws instructing who can inherit the property when you die so it is best to seek expert independent tax and legal advice before purchasing a property abroad.
When it comes to moving anywhere, the key is to do your research and spend time talking to professional estate agents who can direct you on the formal and informal aspects of buying abroad. Remember you’re investing in a dream and new chapter of your life, so you can never spend too much time researching beforehand.