Top 10 tips on buying property abroad

Buying a new home can be a long and drawn out process at the best of times and buying abroad can throw up an entirely new set of potential difficulties to overcome.

Two experts from overseas property lawyers Judicare offer their top tips on what you need to consider before buying a new home overseas.

Jonnie Irwin, property expert at Judicare

1. Decide on what’s right for you. Ask yourself what you are hoping to achieve from the property. Will it be a holiday home, a rental investment, a permanent home for now or sometime in the future, or a combination of the above? It’s extremely rare for a property to have all three attributes so it’s imperative that all buyers agree on the priorities and functions of the property now and in the future. Be honest with yourself and with any co-buyers as I have seen countless situations where people buying together have opposing views about the rationale behind a purchase, making decisions more difficult down the line.

2. Research your location thoroughly. Consider widening your search from just the places you’ve visited on holiday and assess what different territories have to offer. Once you’ve decided on a country – and before start to look for properties too seriously – it’s absolutely imperative you speak to an independent lawyer about how the buying process works in that country. This includes what the total costs might be and what the potential risks are. While the process of buying in some countries may appear to be similar to that in the UK, it can actually be very different indeed. Take advice from independent professionals about factors that may affect your purchase in the short and long-term.

3. Spend what you can afford not what something costs. Work out your finances in detail and speak to independent experts on the cost of buying in that area including legal fees, land registry fees, search fees, taxes and the like. The cost of buying can be surprisingly high in some countries so it makes sense to consider this carefully before getting carried away with house hunting.

4. Obey the same rules abroad as you would in the UK. You almost certainly wouldn’t buy a property at home without getting a valuation, survey or hiring a solicitor and the same should be true when you’re buying abroad – no matter how “cheap” the property is. This should serve to safeguard your asset and give you peace of mind in the future.

5. Take a long-term view. Try to gauge what the area might look like in five years’ time. If there are any new developments planned these can impact on both rental and sales values – sometimes in a positive way. Ensure you consider the logistics of getting to the property and the cost of ownership year in, year out.

Neil Heaney, CEO of Judicare Group

1. Hire a legal representative. Always employ an independent lawyer to represent you throughout the purchase of your property overseas. They should understand not only property law in that country, but how it relates to non-residents. Most problems arise when buying abroad from clients using lawyers provided to them by the developer and/or selling agent as part of the package.

2. Beware Brexit. Brexit is a hot topic of conversation and the possibility of Britain leaving the EU has naturally made British buyers what effect a possible Brexit will have on them. Even at this early stage, it seems that in the event of Brexit, expats living EU countries could face months or even years of uncertainty and it is essential to think about your exit plan and the possible implications this may have on your purchase.

3. Keep track of exchange rate movements. Even small currency fluctuations can have a major impact on how much a property costs and can actually change whether you can afford a property or not. A quick tip: currency dealers will generally give you a better exchange rate than high street banks and will also have lower transfer costs.

4. Understand the obligations of ownership. Buying the property is only the start of your ownership. You need to understand how a whole range of different things work such as taxes, insurance, communal areas, inheritance rules and so on. Most properties will be within complexes and so on-going maintenance of the complex and the management of rentals will play a part in your budget.

5. Decide who will own the property. This is probably the biggest decision that you can make. Deciding on who should own the property has a major impact on taxes and inheritance and can save you large amounts of money. Buying through off-shore companies for example can potentially limit liabilities in the future, although this option should be looked at in conjunction with your financial advisers in the UK.