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Nine times out of ten, the cost of acquiring ownership of a home, whether in the UK, Europe, or elsewhere, will be greater than the stated price — whether on the internet or in an estate agent's shop window. So, before you begin your search, familiarise yourself with the additional costs associated with a property transaction in your preferred location and determine your overall Budget. In this manner, you can look at houses knowing whether you can afford them.
In Europe, these extra purchasing expenses might range from 5% to 13%, depending on the nation, but what do they include? As a general rule, anticipate paying transfer tax on the purchase price of a resale property or VAT if purchasing a new home. In addition, unlike in the UK, you will very certainly have to pay commission to the estate agent who is selling you the home - confirm these facts as soon as possible.
You'll also have to pay the costs of your independent lawyer and the elected notary, the latter of which will cover land registration, stamp duty, and any other modest expenditures. Buying with a mortgage generally entails additional expenses. Download a free nation purchasing guide – or read below – for more extensive information
Before you commit to buying a home, get an approximate figure for the cost of owning and operating it. For starters, your outgoings will include yearly council tax, which usually is lower in Europe than in the UK, and community fees, which are typically paid monthly if your house is part of a complex or urbanisation with shared amenities.
Then there are the standard home costs such as utilities, maintenance, and insurance. Running a private pool will incur additional charges. As a foreign homeowner in Europe, you will almost certainly be required to submit a non-resident tax return in the nation where your property is located. Even if you do not rent out your property, you may be required to pay a small amount of imputed income tax.
Not to mention, if you employ a property management company to maintain your home, especially if you rent it out or merely keep keys for you and aid with bills, you will have to consider their costs as well. So please don't be hesitant to ask the estate agent about all of these expenditures. You can also chat with other homeowners in the neighbourhood to learn how much they spend each month or year to cover everything.
The currency rate, which is typically neglected until the last minute, might have an impact on how much money you have to spend on your foreign property. If you don't think about it early on, it might create severe interruptions to your purchasing plans.
This is why. The cash you want to use for your overseas purchase is most likely in pounds right now, but you're about to start looking at international property priced in euros or dollars! As a result, the actual cost of a property to you will be determined by the exchange rate when you transfer funds for the purchase. Remember that you may agree to a purchase price in euros, considering the exchange rate at the time, but the rate will have changed by the time you come to finish and need to pay the balance over.
So, what is the solution? When you're ready to start looking for a home, the safest bet is to contact currency business Smart Currency Exchange, which specialises in transferring money for foreign property purchasers. They provide solutions for reducing the risks connected with currency exchange and international transfers.
Contact us today to buy or sell overseas property in any part of the world.