Extra costs of overseas property - taxes, legal fees and foreign currency
There are always extra costs associated with buying overseas property which you must take into consideration when working out your budget. Foreign currency issues, property tax and legal fees all add up and, depending on which country you are looking to buy in, can add up to 15% to the cost. When you buy property abroad do not be seduced by the asking price and always factor in the extra costs associated with buying in a particular country.
Overseas property taxes
Dubai is one of the few places on earth where you do not need to pay taxes relating to the sale of overseas property. When you buy property abroad there are normally a series of duties to be paid to the government of that nation. This varies from country to country but may include:
- Stamp Duty
- Transfer Tax
- Value added tax
- Capital Gains Tax
There may be other taxes to consider when you buy property abroad and the amount it adds to the total cost depends upon which country you are buying overseas property in.
Legal and other fees when you buy property abroad
Lawyers are essential when you buy property abroad and will help you avoid expensive errors because you are not experienced in buying overseas property.
Other legal services you may have to contract include:
- Estate agents
- Property finding services
- Translators
- Notaries
- Surveyors
Other charges which you may incur when buying overseas property include registration and mortgage fees. If you want to buy property abroad then inspection trips are also essential before handing over vast sums of money.
The average additional cost of buying overseas property is between 10 and 12%.
Foreign currency issues when buying overseas property
Foreign currency fluctuations can have a significant effect on the amount of money you pay when you buy property abroad. If you are buying in a country with a foreign currency then you should not underestimate the impact this can have upon your purchase of overseas property. Sterling can fluctuate sharply against foreign currency meaning overseas property can become considerably more or less expensive overnight.
When you buy property abroad it is worth seeking professional advice on foreign currency. Professional legal advice on all aspect of the buing process can greatly reduce the extra costs associated with buying overseas property.
