Buying A Home Abroad: 5 Things to Watch Out For.
If you’re looking to move abroad or looking for a holiday home, we offer 5 tips to look out for when buying a home abroad.
BREXIT, BREXIT, BREXIT
Having the right advisor is essential.
Do Your Research!
Prepare for large costs
Beware of the exchange rate.
BREXIT, BREXIT, BREXIT.
With the outcome and impact of a No-Deal Brexit still uncertain, it is not known how this will impact buying a property abroad. There will be many things to consider, including applying for visas and a potential increase on capital gains and income taxes depending on what type of deal the UK leaves with. So overall, until we leave the EU with or without a deal potential buyer are in limbo as to whether to purchase property abroad or until the right time for when Britain’s position in the EU is clear.
Having the right legal advisor is essential.
You cannot and I repeat, you cannot go into buying property abroad without having the right legal advice. Going blind into the buying process abroad can cause you serious risk when investing your money, as the legal systems are quite different compared to the UK’s. Also, remember to seek an English and native speaking lawyer as this will help ease confusion in the buying process, it’s also helpful to have a basic understanding of the language yourself.
Do Your Research!
When moving abroad or buying a holiday home, knowing the country and the area is a must. If you’ve never visited the area, spend some time either on holiday or living there short term. Also consider local factors like property prices, economy, education, transport systems, city living or suburbs. There are so many factors to consider and its important you go through each one individually.
Understanding the countries planning and tax regulations as mentioned is also an important part of your research, as different countries have far different laws compared to the UK and in some cases, it can be confusing. Italy is a useful example, which was named among the 10 top most complex jurisdictions in the world for accounting and tax compliance. So, remember to allocate your time effectively so you have the right amount of knowledge that sets you on the right path to buying the property.
Prepare for large costs.
Buying a property abroad is a long process that takes not only a lot of your time but also a lot of money. Make sure to calculate a total budget that includes legal and purchasing, so costs don’t spiral out of control. Just as the UK, traditional costs for buying a property abroad include mortgage and agent fees depending on how you have approached the market. There can be additional costs if you decide to take out planning permission on the property for external or internal works and finally international bank transfer fees. You can use a range of money transfer services when sending money abroad, including banks and online services.
You can do this the traditional way with a bank transfer from a high street bank like Lloyds, where you can transfer £50,000 to 150 countries for a £9.50 payment fee, however as the exchange rate can impact how much you get in return it's important to research other services that offer better exchanges rates. An example of this is online transfer service; TransferWise, which can offer better exchange rates compared to banks, though this has a higher transfer fee, so if you need to transfer say £50,000 on TransferWise you would receive €56,323.80 (dated 23rd of September 2019) with a £184.58 transfer fee compared to Lloyds which offers €55,169.52. So you’d save up to €1,333 which can be extremely helpful in cutting your costs in the long term.
Beware of exchange rates.
Fluctuating exchange rates can be a major hassle when moving or buying abroad. In today's economy, values of exchanges rates can change instantly, especially as we leave the EU. The issue of hidden exchange rates costs will become more apparent and have a larger impact as the cost itself is so hidden it's hard to account for, so it's important to take the steps to budget for any hidden exchange rate fee’s that would impact your finances over time.