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Independent financial advice – buying property abroad

It is important to take independent financial advice when buying property abroad

Buying your dream property abroad

There are four main reasons why you may be taking independent financial advice about buying property abroad:

  • You want to retire to a home in the sun
  • You want a holiday home you and your family can enjoy
  • You want to join the buy to let sector
  • You want an investment

Of course it could be a combination of these.

Emerging markets

Buying a property abroad is very tempting when you hear stories of 'the next big thing' - Balkan countries Montenegro, Croatia and Slovenia are currently three of the emerging markets. However, before taking independent financial advice about buying in these new areas, you should know your market. The legal purchasing process is likely to be very different than in the UK or even than in more familiar countries such as Spain or France.

Know your market

If you're taking independent financial advice in order to let out your property abroad, you need to do your research and know your market. As the saying goes, location, location, location - singles or young couples will want to be close to bars and restaurants whereas families might prefer to be close to shops where they can be more independent and self-catering.

Use a local agent

If you're resident in the UK it might be wise to use a rental agent to manage your property. They will take a percentage of the rental, but you can factor this into your budget before you take independent financial advice. For this percentage they will handle the booking and management of the rental, including cleaning and maintenance.

Tax

Tax issues can be complicated for people owning a home in the UK and a property abroad. Any rental income you earn will be taxed in the UK, and you will need to watch that it doesn't push you into a higher tax band. Many countries have a double-tax agreement with the UK, which means that you only pay the tax in one country. Taking independent financial advice is vital because you could find that your income from the rental will decrease substantially due to tax liability.

Get the paperwork right

The recent scandals over ownership of land and property in both Spain and Northern Cyprus are cautionary tales for anyone taking independent financial advice prior to buying abroad. It is advisable to engage reliable and trustworthy legal services in the country where you are buying your property.

You can have a brighter financial future. If you would like independent financial advice about bridging loans call our experienced advisers today on 01424 777 156 or e-mail mike.robertson@mraltd.com