Are you still dreaming of owning a place in the sun? Now travel restrictions have eased, now is the ideal time to do your research and start viewing properties. Here are Spartan FX’s top 10 tips for buying a property overseas.
1. The purpose of the property
Is it a holiday home or are you retiring overseas? What amenities do you need close at hand?
If you want to rent out your property, this may dictate location and accessibility; for example, it needs to be easy for the holidaymaker to reach. Secondly, you may consider looking at a property on a golf resort as it will attract customers all year round.
Do you prefer the coast and want to be near the sea? Do you prefer to be inland near the mountains? Do you want to be close to the city? Are you moving with children and do you need to be near a school? It is also important to bear in mind that not all areas will allow you to use the property as a rental; for example, some regions in Spain require you to have a licence.
Is it easy to reach by direct flights? Is it close to an airport or rail link? Reaching your property quickly and easily will make it easier for you, especially if you want to return home to visit family. If you intend to rent out your property, making it more accessible will increase its desirability, but this may also increase the initial cost of the property.
The first step is to agree on a budget. However, don't forget it's not just the price of the property that you need to budget for. There will be tax and legal costs, ongoing maintenance payments, utility bills, and insurance. If you are renting out your property, you might consider employing a property management company to manage the property in your absence.
Another important point to consider is the exchange rate. You will base your calculations on today's rate however, this rate could be different at the time of completion.
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5. Manging the exchange rate
Buying a property overseas is not the same as buying in the UK. When trying to budget and estimate the cost of your property, you will be basing your calculations on the exchange rate of the day. Completion is often in the future (3-6 months) and the exchange rate at this point could be vastly different from your initial calculations.
Using Spartan FX, a currency specialist, you will be able to fix the cost at the beginning of the process, giving you peace of mind.
Fixing the rate in advance means you are fixed into the rate regardless of exchange rate movements however, the price is secured and you do not need to have all the funds available. Only a 10% deposit (this is not a cost or a charge) is needed to secure the rate and the remaining 90% is due once the money is required. This can also be useful for off-plan properties that can require stage payments.
Alternatively, Spartan FX can monitor the exchange rate on your behalf. If you have time and money available, we will notify you of any rate movements, helping you to secure the rate at the best time for you.
Buying a property is a life-changing purchase. It can often be daunting transferring large sums of money that you are not normally used to. Your own personal dealer is on hand to help make the process stress-free.
Your personal dealer is only a phone call away to answer any queries or concerns and will liaise with banks and lawyers on your behalf to help with the smooth transfer of your money.
Once you have your free account open, it can be used for any payments, for example, paying lawyer's fees, paying utility bills, mortgage payments, or transferring your pension.
Once you have a regular requirement, there are more options available. Payments can be set up on a direct debit basis or you can make transfers quickly via your online account.
6. Get a good lawyer
Feedback from many customers is always to get a good lawyer. If you give them power of attorney, it will be easier for them to take care of the process on your behalf, especially if you are out of the country. Make sure your lawyer understands property law and how it relates to non-residents.
Make sure you have the right permissions, licences, and planning consents in place.
8. Tax implications
What tax do you need to pay? Make sure you are aware of what tax you need to pay in the UK and in the country where your property is located. Also, if you rent out your property, you will need to pay tax on the rental income.
Post-Brexit, if you intend to stay in a property in Europe for more than 90 days within a 180-day period, you will need to apply for a visa.
Do you need to take out a mortgage? Again, check with the lender as you may need to put down a higher deposit now because of Brexit. If you are using a foreign currency mortgage, speak to a currency specialist as rate fluctuations can affect the cost of your mortgage. Spartan FX has tools available to help you control the cost of your monthly mortgage payments.