The number of British property buyers abroad has been picking up again after a few years of deep financial crisis. The Spanish property market in particular is recovering healthily thanks to this new wave of foreign buyers and investments: property prices were up by around 5% in june 2015. Things can’t be rushed for property managers and buyers however, if you’re ever looking to buy a property abroad and avoid bad investments and there are a good few rules to get by in order to make it on top in this still tricky market.
1.Don’t buy without viewing
You should always view the property in person. Don’t ever get tempted to buy offline or off a catalogue: this method is often used by unscrupulous property sellers to attract property investors from abroad who are deemed a little more naive (and somewhat often richer) than native dwellers, appealed by a combination of cheap mortgage rates and property prices in dream-like locations such as the coast of Spain or Cyprus. If you’re seriously considering investing in a new house abroad, kill two birds with one stone by planning a holiday in the area of interest and spend a good few days investigating the local property market as well as enjoying some time-off.
2. Get country-specific legal advice
Property laws can differ hugely from one country to the other and it’s crucial that you seek local legal advice as soon as you can. There are numerous horror stories out there of British couples investing in their dream-house abroad before realizing too late some legal issue that sends everything down to the ground, sometimes even literally like for this British couple telling their story of woes to the Guardian back in 2013: they invested £200,000 in a house in Andalucia, Spain, only to discover, close to making the final payment towards the property that planning permission had not been granted to the property developer. The house had been built illegally and was thus facing demolition.
3.Beware offers that look too good to be true
Be especially wary if the local estate agents or promoter presses you to cut corners in order to save on time and budget. Offers that are too good to be true often hide a much bleaker reality. The British Foreign and Commonwealth office highly recommends to seek the help of an independent lawyer specialised in the chosen country’s land law. In any case, don’t sign any papers until you have asked for independent legal advice. You can never be too careful.
4.Local council tax and other charges
Finally, you’ll also be liable for local council tax and other charges. There can be specific agreements made between some countries in order to exempt you from paying the same tax twice. You may also have to pay capital gains tax if you ever resell your property abroad when it hasn’t been your main home.