Top tips for buying a property abroad

If you’re considering buying a property overseas, you’ll need to bear in mind that the legal system and steps to follow may be very different from those you have experienced in the UK. This guide is intended as practical advice which to consider when purchasing a property or timeshare overseas.

Top tips for buying a property abroad

• Research and follow local laws on buying and renting out property.
• Always get written confirmation of what has been agreed in any negotiations and always insist on a paper (preferably not electronic) receipt for monies paid.
• Check that the seller or property developer owns the title deeds to the property or land and can transfer them to you. If buying brand new, or partially built, from a developer, check that the title deeds for the property in question exist.
• Check that the deeds to the property or land have not been offered as collateral for any loans.
• Check whether the owner has outstanding utility bills, local tax demands etc that you may be liable for on purchase of the property.
• Check that all utilities e.g. water, sewage and electricity, are connected and that you will be able to use them.
• Talk to other property owners in the area or on the development to establish if there are any issues you should be aware of before purchasing (such as floods in winter, lack of water or electricity supplies in summer).
• Ask the developer to show you some projects that she/he has completed and talk to owners of properties on these developments to see if they have had any problems.
• Establish whether the developer has outstanding commitments to utility suppliers to bring water, sewage, electricity etc to the development.

Consider drawing up a will in the country you own your overseas property in, to ensure that those you wish to inherit your property and assets overseas actually do so as inheritance laws may differ to that of the UK. Having made all your enquiries, ask yourself if you are satisfied in your own mind that you can go ahead with the purchase of the property in question without encountering problems. If not, make more checks.

Seek independent legal advice

Many property owners encounter problems with their property because they did not seek independent legal advice and instead used lawyers and translators/interpreters who were recommended by the estate agent or developer and in some cases were acting for both parties. Appoint an independent, English-speaking lawyer who is licensed to practice and is experienced in property sales.

If you choose to work with a British estate agent, promoter or lawyer, check that they are qualified to practice both in the UK and overseas and that they are reliable and have experience of operating in the country in which you intend buying. Also check that that they are registered with the Law Society in the UK and specialise in international transactions.

You should also check that your lawyer has professional indemnity insurance.

Use an independent translator/interpreter

If you don’t have a good understanding of the language of the country in which you’re intending to buy, make sure that you get all contracts and relevant documentation translated by an independent translator and that an interpreter accompanies you to all meetings. Be wary of using a translator or interpreter that has been recommended by the agent or lawyer.

Mortgages

Do your homework: you should analyse and compare a range of different products and services offered by different lending companies. Do not automatically take a mortgage recommended by the seller or their agent. If you have any doubts about the terms and conditions, ask the lender to clarify.

Look for the mortgage which is most appropriate for your capabilities and needs. There are a range of mortgages on offer, and you should pay special attention to the interest rate and repayment period, fees for setting up the mortgage as well as early repayment and cancellation fees.

Make sure you fully understand the mortgage agreement you sign.

Also consider the impact of fluctuations of the local currency against Pounds Sterling and how any changes may affect your interest rate rises on your repayments.

Additional costs

• Just as there would be if you were buying a property in the UK, there will be a range of other costs besides the purchase price when purchasing a property overseas. Other than those normally incurred in the UK these may include:
• Fees for a financial adviser to manage your tax affairs both in the UK and overseas. You may be liable to pay tax if the property is sold.
• Fees for a chartered surveyor or quantity surveyor.
• Mortgage fees - these may include a mortgage broker fee, an arrangement or opening fee, and an administrative fee for the bank to appoint a representative to manage payment of taxes and inscription of the title in the property register.
• International bank transfer fees, which you should discuss with your bank in advance
• bankers’ draft/bank-guaranteed cheque fee, which you should discuss with your bank in advance.
• Fees to arrange power of attorney if required.
• Furniture, shipping and insurance costs
• Legal fees to make a will, which may be mandatory in some countries
• Translation fees
• Connection fees for water, sewage, electricity etc
• As in the UK, once you have bought the property there will be various ongoing costs, which may include:
• Annual property tax
• Refuse collection and mains drainage fees
• Income tax or income tax for non-residents
• Community fees, if your property is part of a larger property development of estate.

What you should do if things go wrong

Victims of fraud

If you believe that you have been a victim of fraud and you have no insurance policy/bank guarantee you should seek independent legal advice regarding taking legal action through the courts. Further information is available in the property fraud guidance.