5 Things to Consider Before Buying a Home Overseas
Purchasing a home overseas is the ideal vacation spot for when the holiday sets in. However, one has to be keen to consider some things before purchasing a property.
Victor Kiplagat
Purchasing a home overseas is the ideal vacation spot for when the holiday sets in. In the same vein, when a homeowner spots “greener pastures” on the other side of the “world”, having a home abroad ensures one will not move entirely with the massive property.
Hence, cargo fees either for ships or planes will not be incurred in the travel expenses. Purchasing a home abroad is different than owning the property in your native country.
Before you purchase your dream villa in Italy, Mexico, or Australia, take the following factors into account:
1. What’s the Cost of Living in Your New Country?
Each country has its economic measure of living standards in comparison to the housing policy. It would be a huge mistake to purchase a home abroad without understanding whether the homeowner will live within his or her means or struggle to sustain meeting needs in the new country.
If in the new country necessities such as food, transportation, and medical care are expensive, then purchasing the property abroad won’t make “economic sense”. In consideration of the property to purchase abroad, if the cost of living overseas is within your means then buying a home would be the right step to take.
2. What Are the Ownership Laws in Your New Country?
Ownership laws vary from country to country. Some countries have residential permits while others have housing policies and taxation measures on ownership of property.
The foreign embassy of the country the prospective buyer of a home is willing to visit has background information on all property laws of the “new country” and tax regulations.
More so, it would be advisable to contact a real estate lawyer who has the requisite knowledge of foreign transactions and investment. In doing this, you’ll find out whether you can purchase your dream villa after moving into the “new” country.
3. How Will your Finance Your New Home?
Purchasing property or ownership without proper financing is a herculean task. One way to finance the home you intend to buy is a mortgage. Furthermore, if the mortgage has a high-interest rate, the homeowner will likely consider other financing options.
This includes paying straight cash for the property. The good news is that even if one does not have the cash at hand for the purchase, some property developers abroad might accept your request of buying the home in installments.
4. What will be your liability tax?
Foreign countries have their own tax rules and regulations. In infringing any of the tax rules and regulations, the investment of the desired property will start on the wrong note. For example, in the U.S. property taxes are paid over a certain period of time.
In understanding a country’s property law and investment policies, all taxation “fears” will be alleviated. Ideally, some countries waive tax on property development and property purchase so that investors are encouraged to invest more into the country and consider other property purchase options available.
5. What’s your exit strategy for leaving your current home?
As the homeowner will be preparing to move abroad and purchase the “dream home”, some factors to consider include the following:
Will the current home be used for renting purposes? If the current home finances the new home abroad in terms of purchase, what will be the property valuation? Whoever buys the “current home”, will they lease the property for a specific period of time or buy the entire home permanently?
A wise “exit strategy” for leaving your current home for the home you’ve already bought overseas will ensure you have a seamless transition to the new home without “thoughts” of what to do with your “former home”.
In consideration of these factors, anyone can confidently purchase their dream home abroad. Although life abroad might have some “culture shocks”, one will only know how exciting and amazing the prospects of the property purchase and ownership of the new home are when you take risks. With a sense of finality, I guarantee that this risk is worth every coin.
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