12 Tips for buying property abroadPosted on: 01 July 2014 by Gareth Hargreaves
Purchasing a property abroad is not the same as purchasing in the UK. Know where you stand from the start!
With prices in the UK property market failing to deliver value for money - from a buyer's perspective, many are again turning their attention to the overseas property market. A second home on the continent can be an ideal bolt hole to complemement your increased leisure time, or it can be a sound financial investment if you manage it as a holiday let.
Nevertheless, purchasing property overseas needs careful consideration of the legal pitfalls and costs before burdening yourself with a potential money pit in your later years. Here are 12 quick tips to help you begin your research and decide the right move for you.
Never sign a contract that you do not understand (for example - if it is in a foreign language).
Always ensure that you seek specialist advice from independent Solicitors, Architects and Surveyors before considering a purchase overseas. They should be proficient in your chosen country's laws and processes and also know the specifics involved in buying a property there.
Ensure you do not inherit a debt on the property before you purchase, which a solicitor should be able to check - ie: If the developer has borrowed money to build the development and this amount has been allocated against each plot as additional security to the developer's bank.
Always give yourself a 'cooling off' period if you see a 'must-have property' and are tempted to put down a deposit there and then.
If you are arranging finance on the property, ensure that this is stated in any contract and you have an 'opt-out clause' if the loan is not agreed (which will ensure any deposit paid is refunded).
Try to arrange your mortgage finance 'in principle', before agreeing to purchase the property, or before signing any contracts and paying over a deposit.
Arrange your mortgage in the currency that you earn in where possible, unless you are going to receive rental income from that property in the local currency and then this may be a possible alternative option, dependent on the lender's criteria.
Think about combining your cash with friends or family: it could bring a villa with pool within your financial reach, rather than simply an apartment.
Check with the Estate Agent or vendor that you are aware of the costs charged by the legal and government authorities for purchasing a property in your chosen country.
Open a bank account in your chosen country and ensure you get a Certificate of Importation for the money you bring in from your home country.
Set up standing orders in a local bank account to meet bills and taxes. Failure to pay your taxes in some countries, such as France, Portugal and Spain, could lead to court action and possible seizure of your property.
Remember that bills do not end at the asking price. Lawyer's fees, Taxes, Insurance etc must all be met in your host country and can often be more expensive.
Looking for a property abroad?
property-abroad.com, a site full of overseas property bargains, with property for sale in Spain, Italy, Greece and Florida, and destination guides.
Which? Very informative, unbiased information about the costs of buying overseas property including your mortgage options.
,Gov.uk Practical advice from the civil service to consider when purchasing a property or timeshare overseas https://www.gov.uk/guidance-for-buying-property-abroad
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