When buying real estate overseas, there are several factors buyers need to take into consideration. From taxes to exchange rates and mortgage servicing to financing, there are a lot of reviews that must be taken into account. Each country has its own set of laws and regulations, which is why it’s so important to have an expert by your side when going through this process. These tips will help you through the process of buying property overseas, so you know what to expect before you start looking for your dream property abroad.
What Are The Ownership Laws Regarding Non-Citizens
When it comes to purchasing real estate, many countries have ownership laws based on citizenship. This means that if you are not a citizen of that country, you may not be able to own the property in question. This is why knowing the ownership laws in the country where you want to buy property is essential. For example, in the U.K., there are no laws stopping foreigners from purchasing property, but they may be subject to higher interest rates or putting down a deposit of up to 40%. If unsure, your realtor or attorney can help you find this information.
Know The Cost Of Living and Owning Property In The Location
The cost of living in the country where you’re purchasing property is an essential factor that people don’t always think about when buying property overseas. Things such as utilities, groceries, transportation, and healthcare vary significantly from country to country. For example, the healthcare system in the United States is vastly different from that of France, the healthcare in France is government-funded and administered by the government-funded health centers known as “Sécurité Sociale.” In the United States, healthcare is funded by employers and medical insurance. As you can see, the cost of living and owning property can vary greatly depending on where you choose to buy. Make sure you research and know the cost of living in the location where you would like to purchase.
Understanding FATCA And FBAR Responsibilities
The Foreign Account Tax Compliance Act (FATCA) is a law that was put into place to help the U.S. government track American taxpayers’ offshore accounts. The law requires foreign financial institutions to report the assets they hold for American taxpayers. However, it also requires American taxpayers to report their foreign investments. American taxpayers must file the Foreign Bank Account Reporting (FBAR) form if they have a financial interest in or signature authority over a financial account outside the U.S. exceeding $10,000. If you are looking to buy property in another country and are an American citizen, it’s a good idea to find out what your real estate tax exemptions are. If so, you will need to ensure you have the correct information on file for those accounts to avoid any issues once you purchase real estate overseas.
How Will You Be Financing The Purchase?
When buying property overseas, real estate purchase financing is an essential factor. The exchange rates can fluctuate daily, so it’s necessary to keep this in mind when making your purchase. Of course, you can purchase a property outright without financing, but most people choose a mortgage or specialist lender to help them finance the purchase of property abroad.
Knowing what financing is available in the country where you’re looking to buy property is also essential. As well as asking sure you qualify and have the proper supporting documentation for your application.
In the United States, mortgages are standard, and many different types of financing are available. Financing options are also available for those who cannot get a traditional mortgage. One such example is the FHA loan, a government-backed mortgage with a low down payment requirement and credit score requirement. However, other countries may not offer this type of assistance for people who are non-residents.
In Itlay, lenders offer non-residents mortgages with around a 40-50% deposit and a minimum of 100,000 euros. However, taking out an Italian mortgage on an Italian property means you must abide by rules and regulations regarding property, taxes, and repayments as set by the institution leading you the money.
Final Words
Buying real estate overseas can be daunting, and you must be prepared and knowledgeable before you start. This article covered the ownership laws regarding non-citizens, knowing the cost of living and owning property in the location, understanding FATCA, and FBAR responsibilities, and how you will finance the purchase. Hopefully, these tips will help you search for your dream home abroad.
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