Finance and Legal services for buying an Overseas Property

Professional Services for the Overseas Property Buyer

If you are thinking about or planning to buy an overseas property, for use as a hoilday home, permanent living or simply looking to purchase an overseas property investment, Overseas Property Centres has researched the providers of a range services that will help you through the process.

To make your purchase go like clockwork it is important you have a choice of the best professionals in their field, here we have done the research for you and can introduce you to a list of professionals we and our clients are happy to recommend, whatever you may need

Local Knowledge goes a long way

If you are thinking about or planning to buy a property overseas, Overseas Property Centres offers a range services that will help you through the process. Our articles database contains a wide range of topics related to buying an overseas home or investment property abroad, everything from the legal processes, the cost owning an overseas property, letting your overseas investment property as well as information on living in your overseas property as well as 100’s of articles about popular destinations for overseas property holiday home owners and investors alike.

You can browse articles about buying and owning a property overseas in our Regional Property Guides section, use the quick links below or just enter your keywords in the search box on the upper right of the screen.

Remember Overseas Property Centres carries out extensive checks on anyone we partner with or services we promote on our web site, this goes for overseas property developers and agents as well as anyone you might go to for financial, mortgage, personal Tax planning and Legal advice. Our experts are on hand to answer or get the answer to questions you may have about owning or buying a property overseas, so if you prefer the personal touch why not contact us now on 0845 257 3737 and let us help you every step of the way.

Mortgages

There are two main ways of financing an overseas property purchase if you don’t have the cash. One is to remortgage your UK property, the other is to take out a mortgage on the foreign property. Several UK lenders offer overseas mortgages but mainly in the popular markets. Banco Halifax Hispania and Royal Bank of Scotland International, for example, lend on properties in Spain only; Leeds Building Society and Norwich & Peterborough Building Society lend in Gibraltar and Spain; HSBC in France only; while Barclays lends in Spain, Portugal, Italy and France, and Lloyds TSB in Spain, Australia, New Zealand, Canada and the US.

Learn more about Mortgages by Country

An alternative is to use a UK-based mortgage broker that specialises in international loans. Taking out a mortgage on your overseas property can have practical advantages. Interest rates on foreign loans may be lower and the lender will want to make sure the property is properly valued and offers adequate security. If you do pay with cash, you should try and act in the same way as a bank would do when lending you money on the property. Remember that the rules you may have grown used to in the UK market may not apply in other countries. Self certification, for instance, is rarely an option. Overseas lenders almost all require proof of income. Additionally, the ratios of how much you can borrow in relation to your income will vary considerably from one territory to the next – a reputable specialist in this field will quickly be able to guide you as to what you can and cannot raise.

There are a number of bank and specialist currency providers, here are a few to choose from.

Banco Halifax Hispania; 01422 333868

Barclays, 020-8298 3223

HSBC, 0800 0858887

Leeds BS, 00350 50602

Lloyds TSB, 01624 638119

Norwich & Peterborough BS, 01733 372006

RBS International, 00350 44166

Conti Financial Services, 01273 772811, www.mortgagesoverseas.com

Propertyfinance4less, 020 7594 0555, www.propertyfinance4less.com

USHE Overseas 0845 2300 787 www.usheoverseas.com/index.php

Tax

The tax implications of a holiday home overseas are often neglected. Bill Blevins, of the chartered accountants and international tax specialists Blevins Franks, says: “People often overlook the fact that when they sell their overseas property it will be liable to capital gains tax in the UK, as it is not their principal private residence. There may also be a similar tax charge to pay to the overseas tax authorities.

Fortunately, the UK has double tax treaties with many countries, which means you won’t have to pay twice but you may have extra to pay if the amount charged overseas is less than in the UK.” Tax may also be payable on rental income; in countries such as France there may be annual wealth tax to pay on properties above a certain value. Inheritance tax also needs to be considered. Last but not least, says Anita Monteith, tax manager at the Institute of Chartered Accounts in England and Wales (ICAEW): “Prospective homeowners should find out about local taxes equivalent to our council tax.” UK accountants will be able to advise overseas homebuyers, and if they don’t know about a particular country they can access specialists through the ICAEW.

Blevins Franks, 020-7336 1022, www.blevinsfranks.com

Haines Watts, 020 7323 2131, www.hwca.com

ICAEW, 020 7920 8100, www.icaew.org.uk

Insurance

Taking out insurance locally may be your only option in some countries in Eastern Europe or farther afield; your local bank should be able to help. You may prefer to deal with an insurer in the UK, where you will also be covered by the Financial Ombudsman Service if something goes wrong. Most UK-based policies such as Saga Insurance tend to focus on popular areas such as France, Spain, Portugal and Italy. HIFX’s policy, underwritten by Norwich Union, extends to Greece and Cyprus, while Andrew Copeland Insurance’s Europlan includes Malta and Northern European countries such as The Netherlands and Denmark. Hiscox, one of the UK’s leading specialist insurers, offers holiday home cover throughout most of Europe and even allows you to pay monthly by direct debit.

Wherever you take out insurance, make sure it covers you for the periods when the property is unoccupied. Much of Saga ’s cover does not apply if you leave your property unoccupied for more than 60 days. Hiscox, in contrast, provides theft cover even when the property is left unoccupied for long periods.

Hiscox, 0870 084 3777, www.hiscox.com/homepage.aspx

Saga, 0800 0150751, www.saga.co.uk

HIFX, 01753 859159, www.hifx.co.uk

Andrew Copeland, 020-8656 2544, www.andrewcopeland.co.uk

Learn more about Mortgages in France, Canada, Bulgaria, Germany, Portugal,Spain , Italy, Turkey, Australia, Cyprus, North Cyprus, Florida, Carribean, New Zealand, other countries

For Independent advice from Stirling House IFA's on Investment, Mortgages, insurance and paying for your overseas property.

Financing your overseas property

Legal Services

Getting good legal advice is critical. Buyers can end up with question-marks over ownership or be liable for debts, such as bank loans secured against the property by the previous owner. It is generally advisable as well to make a local will. Local lawyers may have better local knowledge, but you will need to be sure they are independent, acting for you and not the developer.

If you use a British solicitor who does international conveyancing there is the advantage of a common language and the benefit of knowing that he or she is covered by professional indemnity insurance. Specialists include The International Law Partnership, which has several foreign lawyers, and Goldsmith Williams, which has developed relationships with reputable overseas solicitors in a range of countries. The Law Society can supply names of other solicitors in the UK and abroad as can the local British Consulate in the country in question. There are a number of legal firms who offer overseas property services, here are a few to choose from as well as the law society.

Law Society, 0870 606 2555; www.solicitors-online.co.uk;The International Law Partnership, 020 7061 6700, www.lawoverseas.com;Goldsmith Williams, 0151 2311292, www.goldsmithwilliams.co.uk Phillips International Lawyers, 020 7198 7907, www.phillipsinternationallawyers.com

Learn more about Legal processes inThe Dominican Republic, Thailand, Turkey, Romania, Bulgaria, Croatia, Florida Italy other countries

Foreign Currency

If you are buying a property overseas with cash from the UK, you will need to convert your money into the local currency. This can be expensive if you rely on a high street bank. However, there is growing competition from foreign currency specialists. They often offer a better rate, may not charge fees and provide the option of taking out a “forward contract” so you can fix your exchange rate and not have to worry about currency fluctuations.

Getting the best rate

Until ten years ago the UK was forced to accept the poor exchange rates and hefty transfer fees offered by our banks. In addition, customers frequently had to pay receiving bank fees on top. But with an estimated one in 20 of us now owning property abroad, the options have opened up for cheaper, and more flexible and efficient currency purchasing. A quick glance at bank rates, compared to those offered by currency exchange specialists, shows that the traditional banks are often not competitive.

A leading exchange company has suggested that a homebuyer spending 100,000 euros could have saved almost £3,000 by using their service instead of a bank.

Quick and Cost-Saving Transfers

It is important to find a service which will act quickly to transfer funds. Buyers have found that their bank was not able to act quickly enough when they needed to transfer funds. For purchasers buying off plan it is usual to make stage payments. As well as looking for better rates, it's worth shopping around for companies that charge less, or nothing at all, to transfer your money abroad. This can reduce the cost of buying your property.

Regular Transfers

Once your dream home is built, you may find you want to send regular payments to your foreign bank account to keep it topped up to use on bills and spending money. Fees will vary among the specialist companies but depending on the amount being transferred may be free. This is particularly relevant for retired Brits abroad who may have their pension sent overseas each month. If you pay the average bank's flat fee of £27 for each monthly transfer, you could be paying over £300 a year.

Ways To Buy Currency

There are several ways of buying currency. However please remember these transactions require specialist advice and they may involve an element of financial speculation and uncertainty.

The major choices are:Spot Rate: You buy a sum of foreign currency at the day's rate for immediate delivery.

Forward Contract: You fix the rate for a period of up to two years. You will have to put down a deposit, but it may be useful for making stage payments for an off-plan property. In this way you have fixed the cost. However, as rates fluctuate this may cost you less or more than if you waited and bought at the spot rate.

There are a number of banks and specialist currency providers to choose from, here are a few to choose from.

Mike Paterson, a long established currency exchange specialist and also an OPC blog writer, mspfx@tiscali.co.uk or call + 44 ( 0 ) 1732 700383

Currencies Direct, 020-7813 0332, www.currenciesdirect.com

HIFX, 01753 859159, www.hifx.co.uk

Moneycorp, 020-7589 3000, www.moneycorp.com

Travelex, 0870 0100095, www.travelex.com

Smart Currency Exchange, 0808 163 0102 www.smartcurrencyexchange.com

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