How To Take The Stress Out Of Buying Abroad (Part 2)

30.03.16

Appoint an independent solicitor – choose someone located in the country you’re buying who can represent you throughout your purchase. They shouldn’t have anything to do with the property or the developer and must be proficient in property transactions with foreigners. The Law Society and the British Consulate can supply names of country-specific solicitors.

Check title deeds – it’s essential to verify that the home you are purchasing has clean title i.e. that ownership is undisputed, boundaries are clearly delineated, and that you won’t inherit any debt. Check the planning status of new build property. Does the developer have full title to the land or property? If the property has been built in the last twenty years, you should insist on seeing evidence that it has the correct planning consent. If you’re intending to carry out restoration or extension work on an older property, now is also the time to check that this is allowable and to apply for permission.

Tackle the tax system – find out if your country of purchase has a tax treaty with the UK to ensure you’re not taxed twice on any income. The UK, for example, has a double taxation treaty with France and Italy, but still doesn’t have one with Costa Rica. Some places have a ‘two-tier’ tax system where rates paid by locals are substantially less than those paid by foreigners - so make sure you’re analysing the cash flow based on the latter. It’s also important to find out if you’ll be liable for capital gains and inheritance tax when you come to sell. Inheritance laws are often far less flexible than in the UK, so if you live or hold substantial assets abroad, it’s worth having a local will drawn up.

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