There is nothing more exotic than the thought of purchasing a beautiful villa on a beach in another country. The lure of the ocean breeze, the smell of the sand and sea, and the prospect of global travel is the epitome of luxury. And many countries overseas are offering incentives to foreigners for land and real estate purchase. Now may be a great time to take advantage of those opportunities, however, there are a few things to consider before taking that next big step.
Buying a house overseas can be a little more complicated than buying in one’s home country. There are a few considerations to keep in mind that we’d like to make you aware of. After all, before making any big purchases, whether abroad or at home, it’s always best to be well-informed. We know this better than anyone and have provided a few tips to consider before buying a house abroad.
Preparing to Move Guide
Real estate & ownership laws
Many countries offer incentives for foreigners to purchase real estate. Yet, there are many that will not allow foreigners to own the land the real estate sits on. Others may require special permits or government agency registration to complete the transaction.
That’s why it is very important to connect with a realtor or real estate attorney that is familiar with the local restrictions of real estate and land ownership transactions.
Cost of living
Some countries are less expensive to live in than others, and it’s best to know how far your dollar will stretch once you relocate. Being prepared for what your bottom line will look like in another country will help you make the best lifestyle decision. If the basics like medical, food and transportation are higher than where you are currently living, it may not make sense to make the move.
Yes, you can’t escape them if you tried. Your tax liability may differ in a foreign country. The host country may require regular tax payments throughout the year and tax the sale of your home. In any case, you will need to be aware of how purchasing a house overseas will impact your taxes.
Going through a foreign bank can be a little complex. They may require a large down payment and purchase of a life insurance policy to pay the mortgage in case something happens to you.
Another option is buying a house overseas with cash. If you chose to use a home equity line of credit, you may be putting your primary residence on the line if you are unable to make payments. Unless this is something you are comfortable with, you may want to look at other options.
Have an exit strategy
With any business, having an exit strategy is essential for being prepared for any circumstance in which you may have to walk away from an investment. If you intend to eventually sell it, be aware of the market and time frames for selling a property. In some countries, it may take months or years to sell a home. The last thing you need is to be stuck with a property when you are ready to move on.
Ready to Move
Some other important considerations include the amount of space you need, whether you want a backyard swimming pool and proximity to downtown areas. Having a good handle on your budget will help you flesh out these minor, yet important details that can shape your life abroad. While this is a small list of tips on how to buy a home overseas, it is enough to get the wheels turning.
Moving to another country can be exciting and scary at the same time. Being prepared will take the worry out of the decision-making process. As experts in the expat industry, we are here to help guide you through this process and with any questions or concerns you may have.
Want to learn more about the health insurance coverage we provide? Feel free to give us a call. Until next time, safe travels!