There are many reasons for which you might think about buying a property overseas. It can be because the country/city is an ultimate vacation spot or is the perfect permanent dream home that you were looking for. Maybe you do not like the cold climate of your current location, and you want to retire to someplace that is sunny and warm.
Whatever be the case buying a property overseas seems to be quite a good idea. However, keep in mind that buying a property in a different country is nothing similar to that of investing in real estate in your own country. In the following post, we have experts from the Guanacaste real estate, delivering the primary considerations that you have to take into account before investing in an offshore villa or hacienda.
- Consider the cost
Before moving overseas, take into account the cost of living. Always consider the basic necessities that include food, medical care, along with transport. If these parameters are more expensive than the current city of residence, then moving to a foreign country isn’t worth your penny. So, before you start scouting, perform thorough research about the cost of living and compare with what you are currently spending. Budget according to plan to get the best deal.
- About the laws of ownership
The ownership laws are different for non-citizens compared to the citizens of a particular country. A country might allow you to purchase homes, but in all probability, you will require a valid registration from a government agency or in some cases a special permit that allows your status of residency. Keep in mind that these permissions and official documents are a necessity before you can complete the purchase. Keep your real estate attorney on speed dial to execute such foreign transactions without any glitch.
- How to go about financing?
This is one of the trickier aspects of investing in foreign property. You have to figure out your financing, plan, and execute the mortgage through a foreign bank, pay a sizeable down payment and potentially incur very high rates of interest. You will also need to purchase a completely new life insurance policy to pay off the mortgage if any untoward incident happens to you. However, you can make the payment through direct cash, or you could use home equity as a line of credit. Keep in mind that through the equity line of credit, you are putting your current residence on the line in case you miss the payment.
- Lastly, tax liability
Whenever you move into a foreign country, there are tax rules that apply. There are property taxes that will be levied. In addition to that, you will also be charged taxes when you buy and when you sell. You have to keep on making ongoing tax payments throughout the calendar year. Before you commit, keep in mind that you understand how investing in a new property overseas will affect your current tax situation.
Always be aware of your legal rights and obligations and put together a team which will include an attorney, the real estate agent, and service along with a mortgage lender. All the best