Buying A Property Overseas – 3 Things To Know

It’s a dream for many people to purchase a property in a different country. However for those who are seriously considering buying an overseas property, the landscape can be a lot different to navigate compared to buying a house in the UK.

Here are some of the most common hurdles that will need to be overcome and some of the help and advice that will help overseas homebuyers to do so.

Understanding The FX Risks

The local tax systems can be a lot different to the system we have in the UK. Getting advice from a UK-based financial advisor with experience of the relevant country’s tax system can prove invaluable in establishing the tax you will be liable to pay both at home and overseas.

Obtaining the relevant paper work such as licenses and planning documentation is a vital precursor to signing any binding agreement.

Currency fluctuations can have a dramatic impact on the value of your overseas property purchase, this could work in your favour, but it could also render your mortgage payments (and property) unaffordable. We offer a few different solutions that could save you thousands. Be careful on just using your bank, as the rates tend to charge a percentage, and within that percentage, there is a high cost. Our experts can help with your overseas property purchase.

Work closely with an independent advisor and don’t give in to pressure or hard selling tactics until you have had a chance to seek advice.

Steer away from recommendations from sellers, developers and local estate agents, however well-meaning they might be. The best impartial advice will come from a financial advisor or legal practitioner independent of ever part involved in the deal.

  • Try to ensure your legal advisor is fluent in the local language where your property is located

  • Establish if any potential advisor is well-versed in the property law where your property is located and how it applies to non-nationals

  • If you are appointing UK-based legal advice ensure they specialise in overseas property conveyancing and are registered with the law society

Obtaining Your Mortgage

Any mortgage where repayments are made in a foreign currency is affected by exchange rates; if these fluctuate by more than 20 percent then the lender must notify you as there could be problems meeting your payments.  Lenders must also offer the option to make repayments in an alternate currency.

  • Take the time to analyse and understand the range of mortgages available to you

  • Avoid recommendations from sellers and estate agents

  • Look for mortgages that meet your needs in terms of interest rates and payment periods but also setup, cancellation and early repayment fees

  • Do not sign anything until you are happy that all your questions have been answered and you fully understand the mortgage agreement

Buying To Invest

Better rental yields and stronger capital growth can make buying an overseas property as an investment an attractive possibility. Combine those with the potential for a holiday home when it is available and it is easy to see why so many people consider it. There are many other things to consider outside of this which should be considered on our blog here.

  • You might look for properties in established countries or think about cheaper properties in places where the market has fallen or not yet taken off

  • Research your locations, make sure they are accessible and that there are nearby amenities, take into account holiday seasons and what happens outside of them

  • Research the rental costs of other properties in the area, this will give you a better idea of how much you might make

  • Local estate agents can advertise and even manage your property but take their fees into account and shop around

The mantra for everyone purchasing property abroad is to always seek impartial, professional advice, at every stage, to make your dream a reality and to enjoy the wealth of benefits that an overseas property can deliver.

Request a Free Quote

f you require a free quote on your overseas currency purchase, whether is EUR, USD or anything further afield, please contact us.

Work with FX Professionals who are focused on you. Benefit from unique insights into market fluctuations and tailored, one-to-one advice.