Top 5 things you need to know BEFORE you think about buying a home abroad!

publication date: Oct 3, 2009
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author/source: Kate Faulkner, Property Expert and Author of Which? Property Books
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I know that if you want a holiday home you’ll be more interested in what and where  you buy, but unfortunately if you don’t take into account the legal, tax and currency exchange details, it could become the worst purchase you’ve ever made.

Top Tip One: Legal Advice
Before you even start looking or making any offers, you need to understand the way that property ownership is transferred from one person (or company if a developer) to another. In some countries you can’t even own a property outright, you have to part own with a local citizen.

You also need to make sure you have a Will that covers what happens to the property if you die as some countries have inheritance laws for property that dictate what happens, if you don’t!

Top Tip Two: However Taxing the Tax is, it’s essential you understand it!
Don’t believe a word anyone tells you about overseas property and tax. Property tax for UK citizens is complicated and you have to have tax advice that is based on your personal circumstances, not what ‘someone’ else thinks or pays!

You will have to pay for a tax specialist that ideally understands the tax regime when you are a UK citizen and what you will have to pay in the country you are buying. Sometime you will have to pay for a property tax specialist in both countries to be sure you are paying everything you owe.

Top Tip Three: Which Price are you Paying?
Those in the know say there are three prices for a property what the locals pay, what the Irish pay and what British pay! Guess which one’s the highest. Just because a property abroad ‘only’ costs £100,000 doesn’t mean it’s good value if a local would only pay £60,000 for it. Make sure you research prices very carefully!

Top Tip Four: Don’t Build or Buy a Holiday Home from Hell!
Don’t want to end up like those poor owners in Spain who had their homes torn down? Then make sure you know from an English speaking lawyer what paperwork is required to prove and transfer ownership of a property. You also need to ensure you have all the equivalent paperwork such as planning permission for new builds and extensions and building regulations for works carried out in a home. Read about people’s homes being torn down on the BBC.

Top Tip Five: Currency Fluctuations can Make you Rich or Bankrupt!
Seeking specialist advice from a currency exchange company (NOT your bank) is essential. What are the pros and cons of buying in Sterling or Euros? Currency exchange companies WILL be cheaper than your bank, so make sure you seek specialist advice otherwise when you come to buy it, it could cost you double, and if you sell it, it could be worth half of what you paid for it!

Finally, if we think someone has written something better than us, we’re happy to link to it and this ‘Myths about Life in Spain’ is spot on! Thinking of buying abroad – then think about it for a long time, do your research and make sure it’s the right thing for you and your family.

Want more? Read why Kate hasn’t bought a holiday home in St Lucia YET!
 


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