Buying property as a foreign buyer
Buying a property outside your country seems interesting to a person or company who want to own it legally. But it’s not easy to every country, better you should check out the legal requirements for the place you want to own it. Because of the Law in any country has its own different to the other which you may do not know how much of fuss and hassle in property dealing. Make sure that you know what the local regulations are of that country about the legality, make an appointment with registered solicitor who can explain everything all the contract details clearly before you sign any documents. Also learn with the taxational legislation and other rules that you have to follow as in a foreign buyer status.
There are some tips that foreign buyer should bear in mind before making any decision on a property dealing.
Never sign any contract that you do not understand with the condition or option details. Make sure that you have read all documents related to the contract you are going to sign carefully because when you had already signed it then this mean you submit and understand all the agreements.
Find good specialist advisors who are the independent solicitors. These persons should be expert in the laws of that country and know how the processes of property purchasing well including some specifics involved in as well. May be also finding some Architects and Surveyors before considering a purchase can give you more suggestions about building construction.
Ensure that the property valuation will be carried out independently and fare by directly point out any problems with the property to you before you making a contract.
Do not pay the money before you make a contact. Your solicitors should check to the property developer you are making a deal with.
Remember that the bills will not be ended at first asking price. The charges of lawyer’s fees, taxes, insurance etc can often be more expensive.
It is better that before You make any decision for buying or renting something, You must know what’s the law and rules in that Country for avoid big loss of time, money and problems after. So have you had a plane for this now?
Tax Charges for property overseas
Regularly in many countries will impose for tax on property purchasing from foreign buyer. This jurisdiction is affected to the foreign owner of property directly and it’s your advantages to read these and consider what will be your expenses if you are deciding to own property abroad.
1. Annual charges
Investors who own properties abroad are probably pay for overseas property tax for each year. It can be a different form and frequently charged by local or regional governments for flat rate or related to the property value. Sometimes Additional charges may apply to properties which are not the owner's main residence even may also be an annual charge on property occupation. Also may be included this wealth tax which many countries impose this charge on non-residents based on the net value of the property and other assets which they hold in that country.
2. Tax on income
Most countries will impose property owner for tax profits and income that obtain from property business like letting, development or dealing. Rental income may also be taxed on an accounts basis, based on profits after certain deductible expenses, or as a flat rate on rent received. Flat rate systems allow for little or no deduction of expenses.
3. Tax on property sales
There are still many people do not know before or forget to confront with the tax debt. Remember whatever you sell overseas property, your list of expenses for taxes has come on you as well. Some countries also charge tax on the gain arising when a property is sold.
4. Tax on death or gifts
Many countries do not have any death or gift taxes but in some of them have this kind of tax charge. Most countries with a death tax will charge it on non-residents in respect of property and other assets within their borders. Double tax relief for foreign death taxes is available against in some countries by inheritance tax liability arising on the same assets.
Do not expect that there will be an exemption from foreign death or gift taxes in respect of transfers to your spouse or civil partner.
However, these are some additional taxes that you must learn more on its details and see what you can manage with your expenses properly. Avoid paying too much for something useless and nothing to return back to you.
Abroad Property Tax
There are a lot of great opportunities to invest your money with overseas property, it’s important that you have a wise plan for managing all of the things as a foreign buyer.
These tax points that you must consider carefully before undertaking to purchase on overseas property investment.
Read and learn in general brief explanation of the tax regime for the range of foreign jurisdiction and determined the various types of deductions available against your rental income, if any.
Try to search information about tax deduction in the overseas jurisdiction for interest on borrowings money used for affording the property.
Find the advisor who proficient in property law and explain you for structure of ownership properly in order to cut any potential unnecessary taxes or expenses, i.e. buying as a personal or company purpose. But for sure the protection of property law on that country do not permit any foreigner purchase land directly.
Accept with the Double Tax Agreement (DTA) which the jurisdiction is become effective in some countries around the world. Also making sure that your profits from property will not be a subject double taxation as well. For example taxes in the country where your property is located in Ireland.
Making sure you know well about acquisition of taxes i.e. transfer tax (stamp duty), VAT, and the rates at which they might be chargeable.
Investigate any wealth taxes exist. This is a tax figured on the value of total assets owned by you in abroad country.
Investigate the Capital Gains Tax (CGT) rate, if any, that is applicable in the foreign jurisdiction and obtain professional advice before to the sale of your property. i.e. The French Capital Gains Tax rate dropped from 29% to 12% from 1 January 2010. Any owner of property who sold their French property before to 1 January 2010 would have paid for 29% according to the Capital Gains Tax on their gain which could have potentially been avoided with a bit of forward planning.
Making sure that you are tax compliant and submit a tax return each year in foreign jurisdiction where your property is situated. Also, keep a copy of your tax returns and receipts on file. This is very important and you need to be ware of this for saving yourself.
After some of these advices recommended however, you need to read more the regulation of law by yourself, particularly in the country your property situated. We only guide you to know what we should be aware of and cope with any problem. It’s better we know before losing money and time for nothing.