5 Things To Know About Buying Property Overseas

Reasons can vary if someone decides to purchase a property overseas. Perhaps, some would like to own a permanent vacation home, while some would like to retire in an entirely new place. Regardless of the reason, you have to understand that buying a property in a foreign country is a whole different experience than purchasing one locally. 

The purchasing process can be complex. You need to consider numerous things and requirements that you need to comply with before you can successfully own a property overseas. Not to mention legal and travel issues are highly required in these processes. That’s why it’s essential that you’re aware of the critical factors, processes, and papers that you need to complete before going ahead with this huge investment.

To serve as your guide, here are five things you need to know when buying a property overseas:

 

     1.     Be Aware Of The Foreign Ownership Laws

It’s expected that foreign countries have the right to establish property restrictions to non-citizens who are planning to purchase properties from their land. This is one of their ways to ensure the property rights of their native citizens are still protected. Typically, countries that allow foreigners to purchase properties in their respective states will require special residence permits or have them go through a government agency before buying a property.

If you’re not knowledgeable about your target country’s rules in buying properties, it’s best to contact a professional real estate attorney who’s an expert in processing foreign purchases. For instance, if you’re planning to buy a property in California, you can contact realtor Encinitas or whichever city you choose to help you navigate the legal matters and keep you organized. The last thing you’d want to happen is knowing you can’t legally own your property abroad after you’ve already settled in it.

 

     2.     Know The Cost Of Living

Another critical consideration you must remember is studying your chosen country’s cost of living. It would help if you created comparisons between your current location and the state where you’re planning to buy. Moving to a new property with a lower cost of living than your existing address may work to your advantage. On the other hand, if the state where you’ll be buying a property has a higher cost of living, it may be more challenging on your parts.

You also have to consider if your target property is in the suburbs or a city as it can also affect your cost of living in the future. Thus, it’s best to know more about a particular country’s lifestyle, economy, or cost of living so you can plan ahead and create your budget base on such factors.

 

     3.     Your Tax Liabilities

Before finalizing your property purchase in a foreign country, you need to consider the possible tax rules that will apply. After all, it’s expected that taxes will be charged whenever you buy or sell a home. Every country has its own tax laws; some will ask you to pay for title transfer tax, inheritance tax, and more. There are also tax payments that must be made annually.

These tax liabilities could add up to your budget. Thus, it’s best to know all of these ahead of time and know how they’ll affect your finances. Missing your tax payments, especially in foreign countries, could put you at risk of legal penalties.

 

     4.     The Need For Funding

Once you have a professional real estate agent to work with and you’re well aware of all the legal procedures, tax payments, and other legal processes you need to comply with, it’s time to secure your finances. This may be one of the most challenging parts when purchasing a property overseas. It’s often liable to international laws and via local currencies, in which the exchange rate is constantly changing.

With this, it’s best to secure yourself an ‘Agreement in Principle’ before going ahead with the purchase so you’ll be protected in case you won’t be able to get back your initial deposit or you don’t get your loan.

 

     5.     Plan An Exit Strategy

Maybe, for now, buying that property in a particular country is your ultimate life goal until the time will come when you eventually decide to unload it. Thus, this is when a planned exit strategy will come into place. Sometimes, homes can be up in the market for months or even years before they’re finally sold. Planning an exit strategy ahead can assure you that you won’t end up getting stuck in your house when you’re ready to let it go and sell it.

 

The Bottom Line

Before you proceed with buying a property overseas, it’s essential that you’re knowledgeable of your legal rights, as well as the legal procedures you need to go through. Don’t hesitate to call the assistance of real estate agents, attorneys, and other professional overseas homebuyers as they’ll help you navigate all the processes smoothly. Once you follow all the tips mentioned above and recruit professional people needed, purchasing property overseas won’t be that complicated.