Property abroad - the process of buying overseas property
The process of buying overseas property can initially appear confusing. You will most likely be dealing in a language other than English and laws which appear alien when you first start looking for properties overseas. However, with the right legal advice, there is no reason why buying property abroad should not proceed smoothly.
Financing the purchase of property abroad
The first thing you should do when interested in properties overseas is work out what you can afford and, if required, how to finance properties overseas. It is recommended that you have a mortgage in place before you start looking at properties overseas. This means you would know exactly what you can offer when you see a property abroad which interests you.
You should consult a financial advisor to determine whether a UK or international mortgage (LINK) is best for you. This will also have a bearing on the inheritance of properties overseas in the event of your death.
Legal assistance when buying overseas property
Before making an offer on properties overseas you should also obtain the services of a lawyer who is expert in both UK and international law. They should be bilingual if necessary and be well versed in tax and inheritance laws of the country you are buying overseas property in.
At this stage you should be considering how your property abroad is bought. This can have massive implications for the amount of tax your inheritors pay and taking professional advice is recommended.
Making an offer for property abroad
In most countries you are able, at this stage, to submit a formal offer to the vendor outlining what price you wish to buy the property for and when, along with a deposit. More likely however, is that you enter into a preliminary contract, which contains a series of "get-out" clauses. These stipulate that the sale will not go ahead unless certain conditions are met.
Your lawyer will undertake a series of checks to ensure:
- The vendor is the registered owner of the property abroad.
- What exactly comprises the overseas properties for sale.
- There are no debts connected to properties overseas.
After this, you will normally have to pay a deposit which typically varies between 10 and 30%.
Buying properties overseas off-plan
When you agree to buy an off-plan property abroad you will enter into a different payment scheme. You will be required to pay a reservation fee (5% is common) up front and a series of instalments when certain points in construction are reached.
Before buying overseas property off-plan, you should obtain a detailed description of what the property will consist of. The developer should provide you with guarantees that the construction will be completed in the event of financial difficulty.
Completing the purchase of properties overseas
When the time comes to finalise buying overseas property you will pay the remaining cost of overseas properties and sign the deeds of sale, usually in front of a notary. The property abroad will then be registered in your name with the relevant department and you will be required to pay any taxes and fees related to the transaction
