What Should I Know about Buying Property in a Foreign Country?
As with any home purchase in the United States, purchasing a home or property in a foreign country is a significant event. With increased international travel and trade, investing in property abroad is more popular then ever. If you are entertaining the possibility of such an investment, there are a number of things that you will need to consider.
Learn the Law
Before you decide on a property, it is important to become familiar with the laws of the locality. As you would expect, the rules and regulations that govern the purchase of property in a foreign country vary depending on the country. For example:
- In Spain, you will first need to make out a will in Spanish, and any outstanding debts attached to the property would become your responsibility.
- In New Zealand, there are limits on where and how much land you can purchase if you are not a citizen.
- In Mexico, in order to protect the native soil from foreign invasion, some lands are not eligible for purchase by foreign nationals. While you may purchase property outright for residential use outside of the 100km restricted land border zone, or outside of the 50km coastal zone, you will need to set up a land trust through a Mexican bank to purchase property within the restricted zones.
- In Turkey, you will not be allowed to purchase property in rural areas or near military land.
While these are only a few examples how foreign regulations may impact your abilitiy to purchase property , they demonstrate the importance of learning the local laws before making such a significant investment. To protect your interests and ease your mind, you should speak with an experienced attorney that is familiar with the local rules.
Identify the Costs
Again, just like purchasing a house in the United States, there are a number of costs associated with purchasing property in a foreign country. From acquisition taxes and surveying fees, to foreign office permits and double tax treaties, the cost of completing your foreign transaction does not end at the home's negotiated sale price. While the net value of these costs in some countries may be less expensive than in the U.S., you should never assume how much these associated costs will amount to. Always make sure that you are fully aware of all associated expenses prior to signing the appropriate purchase and sale agreement.
Should I Speak with an Attorney about Purchasing Land in a Foreign Country?
Purchasing property in a foreign country requires an extensive amount of time, research, planning and preparation, and can be very confusing. An experienced real estate attorney with a background in foreign property acquisitions - and perhaps a knowledge of the local language - can guide you through the process. An attorney will help you identify your needs and financing options, and even act as an intermediary between you and the seller. Remember, purchasing a home in another country should be an exciting and rewarding experience, and consulting a real estate attorney will help make it as stress-free as possible.