Overseas Property Buying Guide
Without experience of the foreign property buying system, purchasing a property abroad can be a daunting prospect. We are there to help you every step of the way.
Below we have compiled a simple guide to get you started in the overseas property market.
The Buying Process
There are a number of steps involved between identifying your off plan holiday home to receiving the keys.
1 - Identifying Your Property
An initial meeting or phone conversation with one of our property consultants to identify if property investment is suitable for you, what type of investor you are and what type of property and geographic location is suitable for you.
2 - Reservation
If you wish to proceed, you put down a reservation fee to take the chosen property off sale (usually around £2,000). This can be done after an Inspection Trip (if you choose to visit the area).
3 - Contract
You will receive in the post:
- A contract for your property
- A letter from the lawyer you have chosen to aid you with your property purchase (see Legal Advice) which details the buying process and associated costs
- Plans of your chosen development and property
4 - Deposit
You have 28 days from the reservation date to put down a deposit (from 10% to 50% of the purchase price) plus VAT plus 50% of the legal fees. This will be paid into the lawyers client account for security. If you fail to meet this deadline the we reserve the right to re-sell the property so it is important to have a clear idea where the funds for a deposit are coming from when you reserve a property. the £2,000 reservation fee will be deducted from the amount due at this stage.
5 - Property Completion
Once your property is built (usually an approx 18 month process) you will attend a completion meeting with your lawyer, the constructors lawyer and a notary. The balance of monies due can either be paid in cash or via a mortgage although the mortgage will not cover local VAT and legal/notary fees.
Mortgages
Most properties sold through us come with mortgages provided by a bank involved in financing the development. Whilst these mortgages are subject to a credit check, there are no long complicated forms about your income or outgoings since the mortgage is secured on the value of the property.
Currency
The issue of currency exchange is a major part of any overseas property purchase. We can help advise our clients on how to achieve better exchange rates than high street banks, no charges for transfers abroad and monthly mortgage payments in Euros.
Tax and Legal Advice
Once you have decided to buy a property abroad you should find a good lawyer for advice and assistance. We can help recommend a local legal expert to guide you through the purchase of foreign property including any fees and taxes that are applicable.
We can provide broad guidelines on the tax implications (VAT, CGT and IHT) implications of foreign property ownership but for more in-depth analysis we would put clients in contact with a tax expert for the country concerned.
Regarding the on-going tax implications of owning property abroad (eg income tax/property tax, wealth tax, rubbish tax etc. in Spain), you will need to appoint a local fiscal representative. Again we can help source this advice if desired.