When buying overseas property it is vital that you research the country you are planning to move to. It sounds obvious but visit and gets to know the area; there is nothing worse than moving to a holiday home and realising that the area only gets two weeks of sunshine a year.
Research is also extremely important when considering the legal aspects of buying property in your chosen country. No two countries have the same legal system when it comes to buying property. When buying a house within the European Union, and living in the EU, then the same rules and regulations apply but unfortunately every country in the union has their own property laws.
A prime example of a law that could be a sticking point is the Spanish law that passes on any debts on the property to the new owner, so be extremely careful not to pick up a Spanish farmers outstanding debts. Like with most things, do plenty of research before buying, consult a lawyer who specialises in overseas property law and always be careful, it’s all too easy to get caught up in the idealistic nature of it all.
Outside the E.U it becomes a lot more complicated. Unlike the E.U many countries outside the union have different laws for foreign buyers compared to the local population. Prime examples of this are in Turkey. There are restrictions on overseas buyers purchasing property in villages and rural areas and in New Zealand there are limits on how much land foreigners can own.
The legal systems vary from country to country but there are a few fundamental legalities to consider when buying property outside the E.U. These range from local taxes, registration fees, stamp duties, zoning laws, death duties and tax treaties. It is highly recommended to take out a double taxation treaty.
These international agreements limit the tax liability for a citizen of one country who is a resident in another- thus prevents the same income being taxed in two states. Out of more than 1300 tax treaties worldwide the U.K has the largest network covering over 100 countries, with many more having a large number of links.
As with buying property in the E.U the same mentality should be applied here just be more cautious when considering the legalities of buying property outside the E.U.
Make money from a holiday home
Unfortunately no one can spend every day of the year on holiday so it would be wise to think of a way to make money from your property whilst you’re not staying there. The most obvious solution is to rent it out to locals on a short term lease.
Instead of managing the property yourself it would be wise to seek out a letting agency to do this for you. Although they will take a percentage of the rent in return they will look after the property and sort out any legal issues that may arise.
Owning a holiday home can be a great investment as well as a great comfort, just remember be careful and carry out plenty of research and that ideal place in the sun could be just around the corner.