Buying property abroad

Ten steps to your place in the sun (or snow)

1. First choose your country. It might be helpful if you have friends or relatives already there and/or can speak the language. Narrow down the options to identify your preferred location: do you want to live by the sea or inland, in a town or in the country?

2. Logistics, logistics, logistics. How easy is it to get there? That lovely villa on a Greek island could only be accessible when you can get a ferry - which may only run a few days a week or only in season. Check out train and plane connections and remember low-cost airline routes are subject to change.

3. You also need to decide on why you are buying the property. Is it for your own use or to rent out or a combination of both? A rural house may be great for your retirement but perhaps not so ideal for holidaymakers who want a thriving night-life.

4. Check out the local amenities such as international schools, healthcare, golf clubs or tourist facilities. There is no point buying an apartment to rent out for holidays if there is no beach or pool access.

5. Consider who’s in charge when you’re not there. You might need to hire someone locally or the apartment block might have a management company. Service fees and property upkeep can be expensive: understand them before you buy.

6. Having found a property, you’ll need to consider its ownership. Will you own it outright or share it with family or even friends? Check carefully if anyone else has a stake: it might be a freehold or fractional freehold, or have some leaseback agreement.

7. Now it’s time to do the deal. It is worth finding and paying for independent and separate legal, financial and tax advice. Mistakes at this stage can be extremely costly later. 

8. Unless you are minted, you'll need some kind of mortgage to complete the purchase. Make sure you’ll still be able to afford the financing should the pound suddenly sink against the currency you're buying in. This could make your borrowing much more expensive.

9. Don’t forget to factor in buying costs, such as stamp duty and other taxes, which can vary hugely across countries

10. Finally weigh up the tax implications of your purchase. Will any rental income affect your tax status, for example? Or your inheritance planning? In some countries (eg Spain) you may need an additional, local will to ensure the property is passed on to your chosen beneficiaries.

 

More stuff:

  • Get the full lowdown from the UK government on buying foreign property here.
  • Money shop Hargreaves Lansdown has useful guides and a currency exchange and transfer service here but it's worth checking other suppliers too.
  • Find out about overseas mortgages from Which? here.

 

This guide is by our international property guru, Saundra Satterlee. Contact her at s.satterlee@btconnect.com. Last updated 25 October 2017.