Real Estate News  

What Should You Know About Buying Real Estate Overseas?


Written By: Ashley Sutphin
Tuesday, November 17, 2020

Owning real estate overseas is often a lifelong dream. It can look different for everyone. For example, maybe your goal is to retire in Tuscany, or perhaps you want to buy a second home but keep your primary residence in the U.S. You might want to purchase property now where youll live later, or you could want to move overseas full-time.

Regardless of your situation, many specifics vary depending on where you want to buy, but the following are some general considerations to keep in mind.

Buying Property Overseas Is Complex

No matter where you want to buy or when, you should go into it with an understanding that its complex. There are legal and financial issues, as well as travel->

To help streamline it, you should work with local professionals. First, a local lawyer can be extremely helpful when youre buying property as a foreigner. You should also use a buyers agent who specializes in international transactions.

There are very specific rules dictating who can buy what in most countries. For example, theres a rule in Mexico that if youre a foreigner, you cant own property on the coast, but there are ways to go around this by using a Mexican bank trust.

Some places wont let foreigners buy property altogether. For example, Switzerland has very strict restrictions on foreigners buying property. You can only buy property if youre an EU or EFTA national who has a Swiss residence permit and lives in Switzerland, or have a Swiss C permit.

Financing Foreign Property

In many cases, mortgages overseas arent available to U.S. buyers, and U.S. banks typically wont lend you money to buy something internationally. Even if you can find a location where you might be eligible for mortgage lending, youre probably going to have to make a down payment of anywhere from 30 to 50 and your terms arent going to be very favorable.

You may also have to get a life insurance policy that totals your mortgage, and the bank lending you money will have to be named the beneficiary. At the same time, depending on your age you may not be eligible for life insurance in some countries.

What this means is that you should have cash if you plan to buy overseas. You might be able to get developer financing, or you can use the proceeds of a self-directed IRA if you plan to use the property as a rental or investment only.

Tax Liability

If you buy property in a foreign country, you may be taxed both when you buy it and sell it. You may also have to make payments throughout the year, similar to property taxes in the U.S.

Finally, before you buy anything overseas you need to have an exit strategy you can turn to if necessary. You may think youll never sell, but unexpected life and financial situations can arise. What taxes would you owe if you did sell? Would you even be able to sell? What is the market like where youre buying and what is it likely to look like in the future?



Copyright© 2024 Realty Times®. All Rights Reserved

 

Search in English
Search in Spanish
Search in French
Search in German
Search in Italian
Search in Portuguese
Search in Russian
Chinese
Miami New Developments The Miami Life

Listing with Catherine OLD How is the Market? What's my Home Worth Today?
Miami Waterfront Homes Miami Beach Rentals Penthouses Miami Investment Properties
Resource Center
Updated: Thursday, March 28, 2024

Copyright ©2024 - Realty Times®
All Rights Reserved.

JUST LISTED - Miami Beach Penthouse with Extraordinary Views!
JUST LISTED! Stunning and spacious 3bedroom/3bath Penthouse, with breathtaking bay, ocean,...

Opportunity Knocks! Dream Home in Miami Beach
Rare find on coveted La Gorce Drive in Miami Beach. Oversized 10,582 SF corner lot plus...

MEET FIVE PARK - Miami Beach's Premier New Development
Under Construction | Scheduled for delivery late 2023 | Now taking reservations | Contact...