Top Five Things To Keep In Mind When Buying Property Abroad
News Posted On: 20 April 2012
Despite the gloomy economic clouds that have been hovering over Britain for the past few years, investments in overseas property by the English has actually risen. Brits have increasingly started looking at second homes in countries like Spain, France and Northern Ireland, to name a few.
Holidaymakers travelling overseas dream of owning their own little patch of property amidst picturesque sceneries and great weather. And while excellent real estate investment opportunities lie in several cities the world over, buyers can never be too careful while making the purchase. Here is a look at the top five things to consider when buying overseas property.
A golden rule is to never sign a contract unless you are absolutely sure of what it contains! If you are provided with a contract in a foreign language, see if you can get an English version of the same, or ask your solicitor to verify the terms and conditions of the contract before signing on the dotted line. Make sure you fully understand the deposits required, if the cash is refundable, etc.
2. Financing your purchase
For mortgage financing, get an 'Agreement in Principle' for your mortgage before putting down the deposit or signing the contract. To be safe, see to it that the contract has an 'opt-out' clause that will ensure that you are refunded your deposit if your loan request is rejected. Also keep an eye on currency fluctuations as you will most likely be paying your mortgage in the local currency.
3. Seek professional advice
The decision to buy property overseas must always be accompanied by forethought and careful planning. Seeking advice from surveyors, architects and solicitors is a must. The specialists working with you should be aware of the particular country's real estate laws and purchase processes. They must confirm that licenses, planning consents and permissions, have been acquired.
4. Title ownership and valuation
It is imperative that you confirm if the seller/developer has full title to the property or land in question. Check if there is an unpaid debt on the property; this is something your solicitor should ascertain.
A complete, independent valuation of the property must be carried out to identify issues like wiring defects, subsidence, etc. The valuation will also point out any disputes with regard to boundaries, which can create roadblocks.
It is important that you understand the capital gains tax and inheritance laws in the country where you will be purchasing property. For instance, in France, your estate may not be inherited automatically by your spouse and instead go to your children. In this case, you may need to draw out a separate will. Also, a mortgage in Spain or France may lower your inheritance tax liabilities owing to a debt on your property. If you will be renting out your property, you will need to pay income tax.
Of course, location is a critical consideration. Typically, buyers look for factors like proximity to shops, restaurants, airport, or even beaches. It is also advisable to talk to the locals about living conditions, facilities, problems (if any) to make an informed purchase decision.
View Overseas property buyers guides
Written by Les Calvert
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