|
|
HOMESi.com displays attractive properties from many countries around the world. The information on this page provides you with an outline of general ideas for purchasing or renting overseas properties.
|
 |
Follow the straight path to avoid costly mistakes
Each country and jurisdiction has its own laws and customs pertaining to real estate, you should proceed in a modest manner while learning local ways and means. Many countries offer the full support of well defined property laws with full-fledged property rights, but some countries restrict foreigners from owning property or land. Do not leap out in false confidence to finalize a deal without supporting details. Work with a trustworthy local agent and/or lawyer. Do not be overly greedy to scope out that so-called “super deal” until you have ample knowledge and experience in the country or jurisdiction. Just use common sense, foreigners typically don’t happen upon unique deals until they are very well connected with local business people. That takes time. If a deal looks incredibly good to you, make sure the seller is not somehow taking advantage, it could be a trap. That said, it is still possible to find obvious property price discrepancies between regions and countries, whether it be due to various stages of economic growth and development, currency exchange, or other factors. Do not sign any documents until every detail has been spelled-out, especially documents in a foreign language. In all cases transact through a reputable bank, leaving a money trail as proof. Real estate prices normally reflect the market. A very low price, much lower than average, often means that there is something behind it. Always proceed with your eyes wide open.
Consider when you sell
Real estate is your asset, it is important that you will be able to sell a property when you want out. The basic idea of a property’s popularity rings true for any country. Location. Of course there are many other factors pertaining to the value of property, but the bottom line is still location. Normally, property in a good area of a good city with suitable population and long term economic growth, can easily sell, depending on price. But property in an area with nothing around it is pure speculation about the future. Even a well constructed house, with nice architecture, is unlikely to attract many buyers if located in an unpopular area. More so, if the building design is quite unique (e.g., Art Decco design style). Generally speaking, the more expensive and popular the location, the easier it is to sell, and the greater opportunity it has for appreciation in value.
Condominium
Condo’s are the most popular type of property foreigners buy for their vacation home or as an investment. In most cases the Home Owners Association makes decisions about property management and maintenance of the property and controls the association fee collected from unit owners. In a few cases where a Condo building has a small number of units, it can result in difficulties selecting directors for the HOA. If a building has many small units, like studios, a higher rate of non-owner occupied (investment) units may create more maintenance issues. Some prestigious condo’s do not allow owners to rent out their units or apply restrictions for rent ( e.g., not allowing tenancy of less than one month, etc.). Some Condo’s do not provide utility meters for each unit. Make sure you read all HOA rules and by-laws prior to proceeding with a purchase transaction. Another point to verify is elevators, make sure there are enough of them and that the speed of the elevators is adequate for the number of units, especially in high rise buildings. How you dispose your waste is another important issue requiring your pre-purchase attention in order to avoid frustration.
The local tax rules
When you purchase property in a foreign country, you must become informed about their tax system. How much do you have to pay in terms of Value Added Tax to purchase property, is there a doc stamp tax, what is the annual property tax rate (to hold property) and how much do you have to pay when you sell the property? Make sure you cover such points with your tax adviser, including the following issues:
1) In most cases you must file taxes at a local tax office for the income from property you own and/or when you sell the property.
2) In most cases you must report to your country of residence or nationality, all overseas capital gains from property sold, and all rental income, if any. It ultimately depends on each country’s tax regulation. Many countries require you to file global income at your resident address.
3) In many cases the country where your property is located offers tax advantages, for example, a Tax-free environment. Even so, you are typically obligated to report income as per 2) above.
Purchasing property
In most countries, when you purchase a new property, you visit the property developer's office and deal directly with their representative. Some developers also work with agents. Resale properties need the helpful assistance of real estate agents. If your Agent is honest, knowledgeable and experienced, property shopping will go smoothly. But there are many paper-pushers too. Take care to choose the right person as your agent. If you want to deal directly with property owners, you must have experienced advisors. Social skills adequate for dealing in real estate, including layering, are often necessary too. Make sure you read all documents in your native language (translation is a small cost when compared to purchasing property). Be sure to use a reputable bank when making a purchase, don’t pay in cash, even a small portion.
Financing:
Even if you are not generating income in the country where you purchased property, you must deeply look into all aspects of financing if you plan to loan. Some banks offer a non-resident mortgage loan based on the value of the property. It usually requires 25-35% cash down payment to obtain this kind of loan, and it is usually provided in the local currency with an adjustable interest rate. Check for such a possibility with the developer or agent. But an important issue not to neglect is the exchange rate. Generally, interest rates do not fluctuate 20% in a short time period, but exchange rates sometimes move drastically in a short period. Your monthly payment can go up or down 20% depending upon how currencies moves. So beware. Study the historic stability of a given jurisdictions' currency if you are seriously considering a loan.
The list of countries or jurisdictions
1) The countries /jurisdictions where non-resident foreigners are generally able to own properties.
USA
Japan
New Zealand
France
Germany
UK
Ireland
Italy
Spain
2) The countries /jurisdictions where non-resident foreigners are able to own properties with some limitations.
Singapore
Foreigners are allowed to purchase Condo or Apartment units in buildings less than 6 stories high. Foreigners cannot purchase vacant land and landed properties without permission from the Singapore Land Authority
Malaysia
Two Condo units, each priced at over MYR250,000 (Approx: $80,000 USD). The number of units a foreigner can own must be less than 50% of the condo building. Or one condo + Terrace or linked houses above two stories, or Lands/bungalows and semi-detached houses but both limited to 10% of the total number of these type of units built.
3) The countries /jurisdictions where non-resident foreigners are able to own properties but with land right limitations.
Hong Kong - Land is lease only
Macau - Land is lease only
Philippines
The number of units a foreigner can own must be less 40% of the condo building. Only able to lease land.
Thailand
The number of units a foreigner can own must be less 40% of the condo building. Only able to lease land.
4) The countries /jurisdictions where non-resident foreigners are able to own properties subject to review process limitations.
Australia
Except in rare circumstances, acquisitions of residential real estate requires prior foreign investment approval. Previously owned or occupied housing (all types) is not likely to be approved. Newly developed housing typically gains relatively prompt approval, along with vacant land approved for planned development within 12 months.
5) The countries /jurisdictions where non resident foreigners cannot own properties.
China
Land is only for lease. If a person lives in China more than one year (including a student visa), they are able to own a home with the local government's approval. But not allowed to rent it out.
India
Vietnam
1) The list above provides general information for foreigners who may be considering the purchase of a residential home. Some restrictions or privileges may apply for agriculture land, special economic zones or size of investment, etc.
2) Depending on the country or jurisdiction, foreigners who retain properly classified visas for permanent residency may be able to abide under different rules and regulations.
Explanation of types of Homes
*The following information is mostly based on widely used US real estate terminology so it may not apply to your country or the country you are researching.
Condominium (Condo)
A form of ownership of self-contained housing units in a building or buildings holding multiple housing units with a percentage of share rights included for shared common areas. Commonly managed by a Home Owners' Association (HOA).
Single Family Home
Detached free-standing building on its own piece of land (which is sold part and parcel with the home).
Tract House
Also known as cookie-cutter housing, is a style of housing development in which multiple identical or nearly-identical homes are built to create a community.
Apartment
Commonly self-contained housing units of more than 4 in a building (sometimes a set of buildings) under single party ownership and managed for rental housing. Apartment means the same thing as a condominium in some countries.
Co-op
A housing cooperative or co-op is a form of ownership in which a non-profit corporation owns the entire apartment building or development and residents own shares in the corporation that correspond to their apartment and a percentage of common areas
Town House
Also called a "terraced housing" (in US); or called "row-house" - 3 or more houses in a row, with neighbors sharing an adjacent "party" wall. Town Houses are typically multiple stories.
Duplex
This commonly refers to two separate residences, attached side-by-side. The duplex often appears as two houses put together, or as one large single home with two households legally and structurally sharing a wall between halves.
Villa
A villa was originally an upper-class country house, though since its origins in Roman times the idea and function of a villa has evolved considerably. After the fall of the Republic, a villa became a small, fortified farming compound, gradually re-evolving through the Middle Ages into luxurious, upper-class country homes. In modern parlance it can refer to a specific type of detached suburban dwelling.
Flat
In the U.K. an apartment. In the U.S, for example in San Francisco, an apartment can take up an entire floor of a house, usually a converted Victorian house.
Note: Bathrooms
1) One bathroom means a complete bathroom including toilet, sink, shower and bath tub.
2) 0.5 bathroom refers to a toilet and sink (*sometimes includes shower, but very often 0.75 refers to toilet, sink and shower)
3) A powder room is generally defined as a small bathroom that contains only a sink and a toilet. A powder room can also be referred to as a guest bathroom or half bath.
Purchaser check list
1) Title search lot and building (Verify title holder, mortgage, lines of credit, outstanding judgments, liens against the property, unpaid taxes, etc.) *Some country’s register title of building and land separately.
2) Rights to lot ownership (Outstanding ownership, lease etc.)
3) Property lines, adjacent lots. (Single family home, etc.)
4) Building inspection (Structure, Termites, etc.)
Obtain professional assistance to verify the issues above.
5) Price, what is included (Appliances, interior, yard, fence, etc.)
6) Parking (Whether included in the price and its location, etc. Some buildings offer no parking spaces)
7)Various costs related to purchase price (Agents fee, lawyer's fee, registration tax, etc.)
8)The date of property transfer and the condition (As is, after build improvements, etc.)
9) Warranty after moving in (Building defects, equipment problems, etc.)
10) Utility meter (Location, average cost and how they charge)
11) Neighbor conditions and transportation access (You must make sure yourself by foot and by observation)
12) Noise (Street noise, unit upstairs /units next-door noise, etc. )
13) Verify view from all windows (Too much or not enough sunlight?).
14) Verify that neighbors have no construction plans (Possibly obstructing view or sunlight).
15) Home Owner Association rules (Pets, renting out, security, waste disposal, etc.)
16) Schools (if you have children)
17) Past history of natural disasters (Flood, earthquake, typhoon, tornado, etc.)
18) Owner's cost for obligations (Tax, HOA Fee, Management Fee, Insurance, etc.)
19) Possibility for selling and associated costs (Agent fee, Tax, etc.)
Disclaimer:
The information provided above, to the best of our knowledge, is accurate. Even so, it is provided for reference purposes only. You should treat it as a preliminary step, requiring further research and investigation. Variable regulations apply to each country and jurisdiction, Laws are often updated and we do not track them. Unique cases can arise based upon each persons circumstance as well. For these reasons, we cannot be held accountable for the accuracy of the information provided. You must verify with local officials and seek professional legal assistance. |
|
|
