There is no exact figure surrounding the American diaspora that lives outside of the country. However, estimates by the U.S. State Department suggest that around 8.7 million American citizens live in over 160 other countries. While a number of people who travel to foreign shores end up living on rent, there are also those who wish to live in homes they purchase. Incidentally, buying a home in a different country might or might not be as easy as buying one in the U.S.
Pay Attention to Government Regulations
Home buying regulations for foreigners tend to vary from one country to the next. For instance, while American citizens may purchase property in Mexico, they cannot own property within designated restricted zones. Thai law requires foreigners to purchase property in condominiums or apartments that have at least 51% local ownership. If you plan to buy a house in Australia, you will need to limit your search to new homes, because the law prohibits sale of established homes to foreigners. In India, you will have to qualify as a person resident in India to be able to purchase a home. Buying a home in the UK, Germany, or Spain gives Americans largely the same rights as local citizens.
Identify All Applicable Taxes
It pays to determine your tax residency status before you think about buying a home in a foreign
country. For example, if you buy a home in Australia as a foreigner, there is a very good chance that the Australian Taxation Office will treat you as a resident for taxation purpose. Property taxes are common in several countries, which homeowners need to keep paying for as long as they remain homeowners. Selling a home where the proceeds results in any kind of a profit might require that you pay capital gain tax.
Seek Professional Assistance
Buying a home in a foreign country can be tricky, given that various aspects require your attention. Using the services of a local attorney who specializes in real estate law can help you understand the legalities of the process. Besides, your attorney can also help verify the property’s title and look for existing liens that might be attached to the home. While hiring an attorney comes at a cost, their fees are usually open to negotiation. Turning to local real estate agents might provide to be beneficial, as some may have access to unique listings. However, while homebuyers in the U.S. do not need to pay real estate agent fees, this is not the case in all countries. For example, homebuyers in India end up paying one to two percent f the home’s
selling price as real estate agent fees, and in Germany it can vary from two percent to six percent.
Think about hiring a professional surveyor to inspect the home you plan to buy to avoid nasty surprises down the road.
Look at Financing Alternatives
Banks in several countries are legally allowed to provide home loans to foreign nationals. However, finding banks that cater to this segment is often a challenge. In addition, banks tend to follow more stringent eligibility criteria for foreigners when compared to locals. As a result, take time to find out which banks offer loans to foreigners, and compare their offerings well. Getting pre-approved gives you a good indication of how much you might be able to borrow. Depending on where you plan to relocate, you might need to pay more than 40% of the home’s selling price as down payment.
Save When Making International Payments
If you plan to make the down payment or pay any kind of fees while you are still in the U.S., think twice before using the services of a bank. This is because most banks tend to offer less-than-competitive exchange rates while charging exorbitant transfer fees. Specialist overseas money transfer companies, on the other hand, are typically more cost effective and also provide their customers with hedging tools. Some of the leading players in this field include WorldRemit, TransferWise, WorldFirst, and FC Exchange.
Conclusion
The first step in buying a home outside of the U.S. is to look at local regulations. Then, do not shy away from seeking professional assistance through an attorney and a real estate agent because they can help make the process considerably smoother.
Article Contributed by iCompareFX