There are many reasons people are interested to buy an overseas property. Some people may do it as they see huge potential for high return on investment, while others want to spend their retirement years in a foreign country and few others must be relocating to a foreign country for work or studies.
Whatever may be the reason, buying property in a foreign country is an entirely different experience than buying property in home country. It involves a lot of planning and research to find the right property at the right location, finalize a good currency exchange to transfer your money to the seller, hire a good property lawyer and educate yourself about the prevailing laws and taxation procedures of the foreign country.
Here is a list of some important factors to consider before buying an overseas property.
Cost of Living
The first factor to consider while buying a foreign property is the cost of living in the country and the city you are investing in. You will benefit from moving overseas, if the cost of living in that country is considerably lower than your present country. Before purchasing a property, research well about the cost of living in the neighborhood.
Ownership Laws of the Foreign Country
Each country has its set of laws for foreign investors. These laws determine the legal rights of foreign buyers. Some countries require special permits from the government to allow foreigners to buy property in the country. You have to educate yourself about the ownership laws of the foreign country before making any transaction.
Financing the overseas property is one of the trickiest parts in buying foreign properties. Foreign banks charge hefty interest rates and require high down-payment since you will not have any credit history in that country. You can also pay for the property from your savings but you will have to choose a reliable currency exchange to transfer the money to the seller.
The taxation rules change from one country to another. You may have to pay taxes when you buy home at a foreign country, pay income tax on the rent earned and again pay taxes on sale of property. Know about the applicable tax laws and plan your investment accordingly.
It is advisable to consider these four factors before making the final decision on overseas investment in property. Hire the services of a competent real estate lawyer to ensure that you get the right deal and are aware of all the legal and taxation laws applicable to foreign buyers, and choose a reputed currency exchange firm to make the process of transferring money to the foreign country easier and quicker.