Living abroad offers several perks, making it an enticing lifestyle, with over 9 million US residents moving abroad. Living in a different country provides access to a new culture, delicious food, and a lower cost of living. Investing in homes around the world is an excellent way to enjoy an exciting and adventurous life.
Despite the glamor of buying a home abroad, knowing what to expect from the process is vital. You’ll encounter new rules and regulations when you purchase international property for your portfolio. A misunderstanding of the tax implications could result in severe penalties.
The good news is that you’re using the ideal guide to help you navigate getting a mortgage to buy a foreign property. Take your life abroad with these helpful tips today!
Work With an Attorney
You need to learn the ins and outs of the local real estate market. Buying a property is also confusing in a foreign country where English isn’t the first language. Attempting to buy a home, under those circumstances, opens the door to significant mistakes that could cost you.
Hiring a local attorney with a solid reputation is the best way to simplify the process and get assistance. Hire a real estate attorney to handle the paperwork involved in the purchase. They’ll also hold the title review on your behalf for a stress-free acquisition.
Ensure the attorney is representing your best interests during this process. Use your network in the new country to find a lawyer you can trust. Expat group pages on social media platforms like Facebook are a tremendous resource during your research phases.
Manage Your Finances
Before finding homes you love abroad, managing your finances and determining what you can afford to spend is vital. You’ll also get a clear picture of how buying homes around the world will affect your overall financial outlook.
Learn about the hidden costs associated with purchasing and owning the property. Maintenance is the primary expense to concern yourself with.
Other financial decisions include determining if you’d like to rent your foreign property to tourists for short-term periods. You can use the money to cover your expenses and generate a small profit.
Having the cash reserves to purchase a home in a foreign country is impressive, but it’s wise to have a bank account in that country for emergencies. Ensure you have local currency available to you.
Research Local Real Estate Practices
The most notable change you’ll discover when you begin shopping for homes around the world is the lack of a multiple listing service. You’ll need to go the extra mile to determine a fair price on the property you’ve found.
You’ll have no option to discover what other properties with similar amenities are sold for. The challenge becomes more daunting if you’re working with a real estate agent who is more concerned with their commission than representing your interests.
Expect to filter through several real estate agents before finding one you trust. It’s a necessary step to find and buy a home abroad you love.
Check Residency Rules
Some countries will grant you residency if you purchase real estate over a specific threshold. If you’re set on buying real estate abroad, checking the residency rules before purchasing is beneficial.
Buying a home in Porto, Portugal, is a fantastic opportunity, but you may only be allowed to spend a few months there yearly. The Golden Visa is a resource you can use to gain residency in Europe by buying a home or investing in a bank.
Most countries start the Golden Visa pricing at $250,000 or more. If you have cash in the bank to afford those costs, you can live longer at your international property.
Explore the Tax Implications
Tax implications are where things often get hairy with buying homes abroad. Property taxes are usually much lower abroad than in the United States, which benefits your finances. Capital gains taxes are around the same level as in the US.
Stamp duty is another concern when buying property abroad. You can learn about stamp duty and how it affects purchases and title transfers for foreign homes and properties.
The stamp duty can range from one percent to 10 percent, adding a considerable sum to the home’s purchase price. Rental property is another consideration. You’ll need to pay taxes on the income generated by visitors renting your home for their vacations.
Consider hiring a local accountant to help you manage your tax burden. It’s also wise to have an accountant in the US to manage your portfolio and understand the tax challenges of living abroad.
Think About Security
Enjoying safety and peace of mind is critical when living abroad. If you plan on returning to the US for significant stretches, a security system is a must to protect your home and valuables.
Working with a property management team in your area is a fantastic way to protect your property and ensure it’s ready for your next visit. Gated communities are also a viable option, though they can present targets of opportunity for locals.
Political issues and crime are the primary concerns when buying a home abroad. Do your research to find a tranquil place when you’re ready to purchase international property.
Consider Health Care
Health care is often far more affordable abroad than in the United States. It’s straightforward to pay cash for minor health issues you encounter.
Ensure a reputable hospital or health care clinic is nearby before buying a house. Consider joining your new country’s insurance or national health care program.
Start Shopping for Homes Around the World
Living abroad is a rewarding experience that helps you discover new foods, cultures, and ideas while significantly boosting your quality of life. Buying homes around the world provides access to your favorite destinations and the comfort of your home.
Work with a local attorney to find the ideal home and account for the tax implications of your purchase. Check the residency rules, and invest in security for your international property.
A robust portfolio is an excellent path toward building wealth and security. Read our Financial Growth articles for insights and tips to expand your portfolio today!
