FAQ

A resale is a property that is already built. Offplan means you are buying something pre-construction so typically you will be looking at a plot of land, floor plans and artists impressions and then it will take up to 18 months to build.

What’s a leaseback property?

The leaseback scheme was introduced by the French Government in the 1960’s as a way to improve tourism in certain areas of France whilst offering tax incentives to the investor. As an owner, you buy the freehold of the property, you receive a VAT discount of 19.6% on the purchase price, the property comes fully furnished and you will receive a guaranteed rental income for 9-11 years. You may also have the option to use the property yourself for several weeks a year.

How do I change my money if I am buying in a different currency?

There are a number of specialist currency companies who give excellent rates of exchange, typically better than any high street bank. We recommend HIFX who offer added incentives such as no commissions, no bank receipt fees and no transfer fees.

How do I get a mortgage?

Many banks in the local country of purchase will offer 70% mortgages to non residents. Self cert mortgages are extremely rare, so there will be certain criteria that you need to fulfill in order to qualify for a mortgage. There are many finance brokers who will be able to help you with mortgage advice.

What is my payment structure?

If you are buying offplan there will be set payment terms for each development. It depends on the developer as to what these terms are. An example payment plan would be Euros 3000 reservation, balance of 30% within 30 days, 70% due on completion. Some developers ask for payments every few months as and when they reach certain points of construction. This is known as staged payments.

Are there bank guarantees?

There are bank guarantees in some countries, for example Spain, Morocco and Dubai. However you still need to ensure that yours has been executed. If it is a legal requirement in the country you are buying, make sure your lawyer has checked the bank guarantee is in place. In any case when you are buying overseas, it is important to find out who the developer is and that they have a good track record. Your lawyer & your real estate agent will be able to help you with this.

What is capital growth or capital appreciation?

This is the amount that your property has increased by. For example if you buy a house for US$200,000 and after 4 years it is worth US$400,000, your capital growth is US$200,000. This may sometimes be shown as a percentage.

What is guaranteed rental?

Some developers will have an agreement with a hotel or rental company to rent out your completed property to tourists, students or the business community. You may also have the right to use the property yourself, although this may reduce the amount of income. Guaranteed rental schemes can run for 1 year up to over 10 years depending on the agreement in place.

Do I need a lawyer?

Definitely. You need an independent lawyer who specialises in the region where you are buying.

What is capital gains tax?

This is the amount of tax that you will have to pay when you come to sell the property. Let’s say the capital gains tax rate is 10%. You bought the property for US$200,000, 4 years later you sell it for US$400,000. Your profit or gain is US$200,000 which is subject to tax of 10% = US$20,000. Sometimes the tax rate decreases or even reduces to 0% after a certain number of years. You may still be liable to capital gains tax in your country of residence though so always check with your lawyer or tax adviser.

What are my buying costs?

Also known as closing costs, this is the final amount that you will pay on completion for legal and notary fees, stamp duty, registration fee plus any VAT or buying taxes. They vary depending on the country and generally range from 2% to 10% but make sure you find out so you can budget accordingly.

What is included in the price of the property?

This depends on the property and is something you need to find out. The main extras are kitchens and/or white goods, air conditioning, furniture and parking.

What is an inspection trip?

Normally organised by a real estate agent and consisting of 3 or 4 days, an inspection trip allows you to visit the area, the properties on offer, meet with lawyers, finance and rental companies. Tailored to suit your requirements, it is an ideal way of gaining immense knowledge, advice from those on the ground and have appointments set up for you to see a variety of properties. It is important that you are clear on your budget, the type of property that you are looking for and the reasons for purchase.

What is a reservation deposit?

This is an initial deposit that you put down to reserve a property. This will take the property off the market and freeze it at that price. This amount will go towards the payment of your property; it is not an additional fee.