Dreaming of owning a home by the sea, in the mountains, or in a bustling metropolis abroad attracts many. However, buying real estate abroad is a complex process that requires thorough preparation and a deep understanding of the nuances.
Contents
- Step #1: Determine the goal and budget
- Step #2: Research the real estate market
- Step #3: Assess all risks
- Step #4: View the property before buying
- Step #5: Learn about additional costs
- Step #6: Complete the transaction
Step #1: Determine the goal and budget
Before you start searching, clearly define what you want to achieve from the purchase:
- Investment. Buying property to generate income from rent or resale in the future.
- Relocation. Buying a home for permanent residence.
- Leisure. Purchasing property for comfortable vacations.
Determine your budget based on your finances and the cost of real estate in the region of interest.
Step #2: Research the real estate market
Buying real estate abroad is a serious step that requires thorough preliminary preparation. Here’s what you need to do:
- Choose a country and region. Research real estate laws, tax system, standard of living, climate, infrastructure, and culture of the country.
- Study prices. Compare real estate prices in different regions and types of housing.
- Familiarize yourself with the purchase rules. Learn about the requirements for foreigners, the purchase procedure, taxes, and fees.
- Study the rental market. If you plan to rent out the property, study the demand and supply in the rental market.
Many realtors advise not just theoretically evaluating the country from the materials available on the internet, but actually visiting it or even living there for some time. This way, you can get to know the country much better and become familiar with all its features firsthand. At the very least, you can assess the level of service and the attitude of the local population.
When choosing a direction, it is also important to consider the rules for obtaining a residence permit. For example, in the following countries, you can obtain a residence permit and eventually apply for citizenship by purchasing real estate:
- Greece – a country with some of the most favorable conditions. To obtain a residence permit in Greece, you need to buy property worth at least 250,000 euros. However, if you want to include, for example, your parents in the application, the minimum amount will double.
- Portugal – here the amount is 500,000 euros. But the amount can be reduced to 280,000 euros if you buy a commercial property over 30 years old and carry out major renovations.
- Spain – in the country, you can obtain a “golden visa” for investors by purchasing real estate worth at least 500,000 euros.
There are countries where buying property is not the only way to obtain a residence permit. For example, you can obtain a residence permit in Malta by participating in the government program for foreigners, the Malta Global Residence Programme. In addition to the applicant, the spouse, children under 25, and all close relatives without age restrictions can participate. The only condition is that they must all be financially dependent on the applicant.
So, under this program, you can obtain a residence permit by renting a property for at least 9,600 euros per year, paying an administrative fee (the amount depends on the region), obtaining health insurance for all participants in the program, and paying a minimum income tax for each family member (15,000 euros).
Step #3: Assess all risks
The desired direction is chosen, and you are ready to go to a real estate agency, but at this stage, it is important to take a pause and analyze everything thoroughly. You need to assess your financial capabilities: do you have enough funds to purchase and maintain such a property, is there a risk of your income decreasing, and can you afford to pay all the taxes required in this country. You should buy only when you are confident in your financial situation and when buying a property is objectively more advantageous than renting.
Step #4: View the property before buying
If you have the opportunity, it is better to visit the country and search for real estate on-site. You can find several options and arrange viewings at a convenient time for you.
But this is not always possible, so you can contact our real estate agency “M2 Real Estate,” which offers a wide range of options for buying property. An important advantage of working with us is that we can organize an online tour for you, meaning you can view the property from anywhere in the world. You can order a full report on the property you are interested in. Our lawyers will check all the documents, the seller, and also visit the property and thoroughly inspect it.
Our specialists will help you:
- Determine the optimal housing. Considering your requirements and budget, we will offer the most suitable options.
- Negotiate with the seller. We will help you agree on the terms of purchase and conclude a favorable deal.
- Prepare the documents. We will assist with all necessary paperwork, including the contract, mortgage, and tax documents.
- Familiarize yourself with local regulations. We will inform you about the nuances of purchasing and living in the country.
By the way, the service of exchanging real estate is becoming increasingly popular. You can become the owner of a property in another country without actually paying for it. A contract is signed, under which each party undertakes to transfer their real estate without monetary exchange. A large database of offers will allow you to choose an option that suits you. If the other party also agrees to the deal, we will provide full support – from negotiations and drafting the contract to handing over the keys.
Step #5: Learn about additional costs
To buy real estate abroad, you need not only to pay the full amount for the specific property but also a number of additional payments. You need to be prepared for the fact that the costs can be significant – about 12-15% of the property value. Money will be needed for document translation, opening a bank account in the local bank, paying for notary services, and other intermediaries.
In some countries, there is a one-time fee, the amount of which depends on the transaction value. For example, in Cyprus, there is a property registration tax – from 3 to 8% of the property price (additionally, a stamp duty of 0.15-0.2% will need to be paid).
Step #6: Complete the transaction
As a rule, completing the transaction involves several stages: opening a bank account in the country where you are buying the property, confirming the funds for the purchase, and drafting the sale and purchase agreement.
To open a bank account, you will need:
- passport;
- bank statements (usually for 3 months);
- proof of residence (e.g., utility bill);
- additional documents (the bank may require a marriage certificate, children’s documents, etc.).
All documents must be translated into the language of the country where the property is being purchased. You also need to translate all documents that will be provided as proof of the origin of funds for the purchase of real estate.
Next, a sale and purchase agreement is drafted, the content of which is standard in most cases. It specifies information about the two parties to the transaction, the property itself, and the conditions under which the payment is made, its terms, the transfer of keys, etc.
Buying real estate abroad is an opportunity to fulfill the dream of a home in a picturesque location. However, it is a rather complex process that requires attention, preparation, and professional assistance. By following the recommendations provided, you can make the right choice and purchase real estate abroad with maximum benefit and comfort.
