Things to Consider

Here are just a few things to consider when you are purchasing property in another country.

Never sign a contract that you do not understand, especially if it is in a foreign language.

Always ensure that you seek specialist advice from independent solicitors, architects and surveyors before considering a purchase overseas. They should be proficient in your chosen country’s laws and processes and also know the specifics involved in buying a property there.

Ensure you do not inherit a debt on the property before you purchase, which a solicitor should be able to check. An example of this may be where a developer has borrowed money to build the development and this amount has been allocated against each plot as additional security to the developer’s bank.

Always give yourself a ‘cooling off’ period if you see a ‘must-have property’ and are tempted to put down a deposit there and then.

If you are arranging finance on the property, ensure that this is stated in any contract and you have an ‘opt-out clause’ if the loan is not approved, as this will ensure any deposit paid is refunded.

Try to arrange your mortgage finance ‘in principle’ before agreeing to purchase the property or before signing any contracts and paying over a deposit.

Where possible, arrange your mortgage in the currency that you earn unless you are going to receive rental income from that property in the local currency (this may be a possible alternative option, dependent on the lender’s criteria).

Think about combining your cash with friends or family as it may bring a villa with pool within your financial reach, rather than simply an apartment.

Check with the estate agent, mortgage originator or intermediary that you are aware of the costs charged by the legal and government authorities for purchasing a property in your chosen country.

Open a bank account in your chosen country and ensure you get a Certificate of Importation for the money you bring in from your home country.

Set up standing orders in a local bank account to meet bills and taxes. Failure to pay your taxes in some countries, such as France, Portugal and Spain, could lead to court action and the possibility of seizure of your property.

Remember that expenses do not end with agreement on a purchase price. Items such as Legal Fees and Taxation as well as Insurances must be met in your host country and can often be more expensive.