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Some of the most popular destinations among British expats are Mediterranean countries including Spain, Portugal and Italy. Money expert Jonathan Merry, who is also CEO of money transfer comparison site MoneyTransfers.com, shared the key steps people should take before purchasing their dream home abroad.
Set a realistic budget
The money expert explained that the first step to purchasing a property overseas is establishing what your budget is and recognising what you can afford.
“There are also lots of additional fees which can steadily mount up so it’s important you’re prepared for these too,” he warned.
Additional costs expats should consider include international bank transfer fees, legal fees, connection fees for water, sewage and electricity as well as any stamp duty and annual property tax.
Choose the best way to pay
Jonathan explained that in order to save money, potentially thousands of pounds, Britons should make sure they choose the best money transfer provider.
“When making an overseas property purchase it’s likely you will need to pay in the local currency. The most cost-effective way to pay for a property abroad is by using a money transfer provider as they offer far better exchange rates than high street banks,” he explained.
Decide what you’ll use the property for
Buying a house in Spain or Portugal doesn’t mean British expats have to permanently relocate there.
It is worth considering if it will be a holiday home, Jonathan said, and “if you’re expecting visits from friends and family throughout the year then you’ll need to bear this in mind when deciding on the number of bedrooms and bathrooms you want your property to have”.
Choosing the right location is also very important, especially if Britons are permanently relocating there, the expert added.
Think carefully about the location
The expert said that “a fundamental aspect of buying a home is deciding on the right location”.
While some people may already know their ideal destination, there are “a number of factors to consider to ensure it really is the perfect place for you”.
Homes by the beach are attractive options but “it’s important to remember seaside resorts can be very quiet in the winter months,” he warned.
People should consider locations that are busy all year round so checking out the local shops, restaurants and bars is important.
“For this reason, it is always advisable to visit your chosen destination out of season to get a feel for what it is like during quieter times,” he recommended.
Hire a lawyer who specialises in the local law
The money expert advised Britons to hire a lawyer who can help them with all of the paperwork and legal processes.
This is to avoid “the horror stories involving Brits who have bought a property abroad only for things to take a nasty turn”.
You can find English-speaking lawyers and translators by contacting the local British Consulate, he said.
Buying after Brexit
The expert warned that due to Brexit there are two main things to consider before purchasing a property abroad: tax and restrictions on stays.
If you are buying a property abroad to stay for long periods of time, you will need to consider the new rules such as the 90/180 Days-of-Stay rule, he explained.
“Under the Schengen Area rules of stay for non-EU citizens entering the territory, you can now only stay for a maximum of 90 days, for every 180 days. Those who intentionally or unintentionally overstay this period may face penalties such as deportation and entry bans.
“In certain circumstances, some EU countries have different tax rates for non-EU citizens, so it is important that you research these to see if you will be affected. For example, if you have a holiday home in Spain in which you rent out whilst back in the UK, you must pay 24 percent rental income rather than the 19 percent that applies for EU citizens,” the money expert explained.
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