Key Factors to Consider When Buying Property Abroad

It would be great if buying property abroad was as simple as seeing a property you like and signing some papers, but sadly that’s not the case. Instead, you need to navigate a different legal and financial system, and possibly even a different language. Each country will have its own unique quirks to deal with, but below we’ve listed some property-buying tips that will help you regardless of which destination you choose.

Search In The Local Language

You can often find more results and better deals by searching in local languages than English. Searching “บ้านพัทยา” will yield a different set of results to “houses in Pattaya,” a city in Thailand where many expats buy property, even though it has the same meaning. Many foreign property buyers don’t think to do this, and they end up not seeing all of the available properties and missing out on some great deals.

Understand the Legal Framework

Different countries can have very different approaches to property law, and this can directly affect things like your legal rights in a property dispute, as well as how much of the property you really own, and what you can use it for. In Thailand, for instance, foreigners are not allowed to own land, which complicates property ownership. Rules like these may mean that you need to buy the property through a company or a local spouse.

Budget Beyond the Purchase Price

The property prices you see online or on signs are never what you actually end up paying. In some cases, they can be drastically lower. Fees for transferring money to the country, exchanging the currency, lawyers, valuation surveys, insurance, and shared facilities may increase the price significantly, and that’s before you take care of any renovations or furnishing that you need to do in order to make the property habitable.

Compare Financing and Currency Options

Although the final price will still likely be higher than advertised, you can drastically cut costs by carefully researching your financing options. Start finding out about lending options for foreigners early, so that you have time to look into several providers and compare things like their down payments, amortisation periods, interest rates, and repayment schedules. Preparing early will also give you time to analyse currency trends, so that you can time transfers for when conditions are favourable.

Conduct Thorough Due Diligence

Cost leads many overseas buyers to forgo having an independent structural survey carried out on properties they want to buy, but this can cost you dearly in the long run. It’s better to be safe than sorry, so always call in a certified surveyor, and preferably one who can issue reports in the local language and your own. You should also verify your property boundaries with the local land office, and check that utilities are properly connected.

Use Trusted Local Services

Even in your home country, where you have a much better understanding of the real estate market and legal system, you would use agents and solicitors to handle things on your behalf. There’s no reason to think you would be able to handle things in another country where you understand even less. Look for an experienced, bilingual buyer’s agent and solicitor. It’s also smart to use a certified, independent translation service for important documents like contracts.

Understand Your Tax Obligations

Property transactions can leave you with hefty tax bills both at home and in your new country, which can be a shock if you fail to understand them in advance. Have a look into any tax treaties that exist between the two countries, as it’s possible you may only have to pay taxes in one. You then need to see if you need to pay any duties, capital gains taxes, or annual property taxes.

Evaluate Lifestyle and Infrastructure

Although it can be challenging when you’re buying property overseas, you really do need to visit the property location at different times to get a feel for the area. Try to see it during rush hour on weekdays, on weekends and evenings, and during the off-season, if there is one. See if it matches your needs and expectations. You also shouldn’t just consider the property in isolation. Think about how close it is to essential services like hospitals and supermarkets.

Understand the Culture

When buying property abroad, you are about to be firmly tied to a community that may have social norms different to your own. Be sure to at least learn some basics of being a good neighbour in your new community. Respect local noise limits and waste disposal rules, for example, even if these are informal. Behaving respectfully will encourage others in the community to do the same, which helps protect the value of your property.

Conclusion

Purchasing a house or other property overseas can be complex, but with an early start, a systematic approach, and the discipline to really do your research, it can be a hugely rewarding endeavour.