Step Three: Guide to buying overseas property
1. Calculate your overall budget
Do you know how much money do you have to spend on your property, the property buying process in your country of choice – including fees – and its ongoing upkeep and maintenance? Plan in advance so you widen your choice of properties and can have oversight of how much the property will cost in another currency. Seek guidance on exchange rates and the part they play in the property purchase process from a currency specialist.
2. Establish how you will pay for the property
Are you buying with cash, purchasing with a mortgage, releasing equity from another property, or another source of income? If you will be taking out a mortgage, it’s important to speak to a mortgage broker with experience in mortgages for properties in your chosen country.
3. Consider and plan for all additional costs
You will find that several additional costs arise during the process of your purchase – such as property viewings and visits to the country before buying the property, legal, agent and notary fees, taxes, valuation and registration costs, as well as exchange rates when sending money transfers between countries.
You will also need to consider the cost of visiting your chosen country in advance and then actually moving you, your family (if relevant) and your belongings there. Budget for buying new furniture, fixtures and fittings, if needed. Often when moving overseas permanently, homebuyers choose to buy new rather than take bulky furniture and larger items with them.
4. Be aware of how currency market movements affect the price of your property
When buying property in another country, you will most likely need to transfer your funds into another currency. The most cost effective way to do this is through a specialist currency company like Halo Financial. We recommend opening an account as soon as you have made the decision to move overseas, to give you time to discuss the best strategy to make the most of your money with a continuously fluctuating currency market. There are numerous tools that can help you with your transfer, minimising your risks and saving you a significant amount of money. You will also be able to take advantage of better exchange rates than your average local bank, and will not be charged a fee on any transfer above £5,000.
Ever changing exchange rates
Exchange rates fluctuate constantly. The rate you achieve when you first agree to buy the property will change by the time you pay your deposit, and then it will change again by the time you send the rest of the funds.
If you are buying an off-plan property that you pay for in instalments, you may find that there is a different rate available every single time you transfer your funds. You can protect against this, however, by using specialist currency tools, such as a Forward trade or a Regular currency trades service. Find out more from a Halo currency consultant.
The currency movements are significant in the current political climate. This could mean a difference of hundreds or thousands of pounds, especially when paying the final completion amount.
How a currency specialist can help
A currency specialist can help you save money on every payment that you make for your property – even after the purchase when you are paying for ongoing mortgage or property maintenance costs. Halo Financial can offer you a wealth of knowledge and experience to save you both time and money.
For example, they can monitor the currency markets and let you know how they are moving, as well as alerting you to upcoming political and economic news that will affect future exchange rates. When it comes to actually buying currency, they can also offer rates that are usually closer to the Interbank rate than your local bank. This is the rate banks use to exchange currency with each other, and it can be up to four per cent better than the standard high street or retail exchange rate. That’s a difference of €20,000 on a €500,000 property.
Currency tools and services
There are several tools that can be offered to help you with your overseas property or emigration overseas payments. A Forward trade will allow you to set the exchange rate when it is favourable, at a time that suits you, so that you know exactly how much you will need to spend in your home currency to achieve the amount in the new currency.
How to find out more
Your currency specialist at Halo Financial will be able to talk you through any tools and resources available to you to help you maximise your funds for your purchase.
5. How will you pay for ongoing costs when you own property overseas?
You will need to ensure any regular bill and mortgage payments are covered, as well as ongoing maintenance, amenities, and so on. Remember that if you are paying these in another currency, the same currency market movements will affect the price of these payments. Consider any recurring and regular payments and discuss how you could potentially save money on these with a currency specialist.
6. Do you have proper estimates for removals and shipping costs?
Have you thought about how much it will cost you to ship your worldly belongings from country to country? We recommend speaking to at least two professional relocation and removals firms to ensure you get the best deal for your move. If you are looking for recommendations for reliable help to move your belongings from the UK abroad, Halo Financial is a partner of the British Association of Removers (BAR) and can put you in touch with trusted removal specialists.
7. Have you looked in to inheritance implications?
A new property overseas is likely to have an impact on your worldwide estate. You may also be affected by Inheritance Tax in your new country, and we recommend speaking to a solicitor and advisor who specialises in international taxation, as this will ensure you understand the implications of your plans on your estate. This is an especially important area as inheritance laws are generally long and complex.
8. Do you have a bank account in your new country?
It’s a good idea to open a bank account in your new country as soon as you decide to move there. In most places this will be relatively simple and can be done online. This will mean you can move quickly as soon as you find your perfect home.
9. How you will you organise regular salary or pension payments?
If you are emigrating or moving abroad long-term, ensure that your salary or pension can be paid directly to you in your new country. You may wish to consider, if appropriate, moving a pension into a Qualifying Recognized Overseas Pension Scheme (QROPS), which may offer improved control over your pension and can be a source of tax savings. Always consult an independent financial advisor (IFA) for any financial decisions of this nature and to find out what best suits your individual needs. Halo Financial would be happy to recommend a trusted financial advisor, just get in touch.
10. Have you thought about what happens next?
What next? Will you be moving overseas permanently, or using the property for investment purposes? Is it simply a holiday home? Each of these international property options has its own individual financial considerations, which need to be taken into account at the very beginning of your overseas property planning and search.
Will you be relying on savings, a salary, or a pension to fund your new property? To ensure you have accounted for all the financial aspects of your property purchase overseas, you need to factor in all ongoing costs once you have bought your home abroad, and your sources of income.