Photo by iAlicante Mediterranean Homes on Unsplash
Everyone has visions of carving out their own little slice of paradise abroad. A luxury villa, white-sand beaches, lush vegetations and warm summer nights. This vision drives many of you to sell you luxury car and scour foreign lands for a luxury villa, penthouse apartment or rural retreat to make your own.
Often, the reduced price of foreign real estate and favorable exchange rates mean that you can secure a significant upgrade on the property you might be able to afford at home. This, coupled with an undervalued housing market, allow homeowners to make substantial profits on foreign property investments and they get to enjoy the property while it is in their possession.
However, buying a property abroad will inevitably be a vastly different experience to buying a home in your own country. Before you snap up that quaint French farm, Caribbean villa or Mediterranean apartment, here are four tips for purchasing property on another continent.
Check the Lawson Non-Residents Purchasing Property
Every country has different requirements for prospective property buyers and investors. For some countries you may have to secure additional visas, pay additional fees or register with a relevant government agency.
If you are unsure of a country’s homeownership laws, contact an attorney with experience in foreign property transactions. They will be able to provide you with additional information and assistance.
Do Your Homework
Buying abroad involves doing extensive research on a country’s property market. You don’t want to buy your luxury villa at the peak of the market’s rise and pay above market price. By doing extensive research and getting an idea of the country’s real estate market cycles, you can ensure you are buying near the bottom of the cycle of setting yourself up for strong returns on your investment.
Translate Any Key Documents
Before you sign any important documents, make sure you get them translated to your native language by a professional translator. In order to make an informed decision on a contract, you need to understand exactly what is included within. To do this, you need to be comfortable reading and understanding the language in which it is written.
Don’t sign anything you don’t understand, particularly if you are being pressured into signing quickly.
Find out How it Will Affect Your Taxes
Even the most detailed budget plan can be derailed by unforeseen taxes. Depending on the country you are purchasing property in, you may have to pay tax on the property when you buy it and when you sell it.
Owning a second property abroad could also impact the taxes you pay at home, particularly if you are renting it out and earning a second income from the property. Before you commit to purchasing a luxury property abroad, you should have made yourself aware of how it will affect your tax status so that there are no unexpected surprises.
It can be enormously helpful to put together a team of professionals to help you navigate the overseas property buying process. A real estate attorney, real estate agent and mortgage lender are a must, but also your financial advisor should be in the loop and offer guidance on how to purchase fits in with your long-term financial goals.
