Fallen in love with your holiday destination this summer? Here's how to go about buying an overseas property - and the pitfalls to avoid
- The most searched for locations on property website Zoopla for overseas homes for sale are Spain, Portugal and France
- The most popular search terms for properties abroad include 'pool', 'beach' and 'sea view'
- Experts warn buyers to make sure they understand the tax implications and any foreign legal document they are signing
It seems that some people simply aren't prepared to accept that their summer holiday is over. No sooner have they stepped off the airplane and they're looking at property websites to turn their holiday home dreams into a reality.
The claim is supported by figures from property website Zoopla, where visits to its overseas homes for sale section have increased 17 per cent during the past five weeks.
It found that European hotspots close to Britain are the most popular holiday home destinations, with the most searched for location being Spain, followed by Portugal and France.
The most searched for overseas locations on Zoopla between July 10 and August 15 this year
Property searches in the Spanish resort of the Costa del Sol saw an uplift of 44 per cent, followed by Ibiza at 41 per cent and Menorca at 19 per cent.
In Portugal, searches for properties in the Algarve saw a surge of 16 per cent. Long-haul destinations also featured in the top 10 most searched for overseas locations, including the USA, Jamaica and Canada.
Zoopla compared website traffic during the last five weeks - which covers the school summer holidays - to the previous five-week period earlier in the summer.
It also found that the most popular search terms for properties abroad included 'pool', 'beach' and 'sea view'.
Zoopla's spokesman Lawrence Hall said: 'It's no surprise that the unseasonably autumnal weather we have recently been experiencing, people are looking for a bit of escapism in the form of the perfect holiday home.'
France is the third most searched for location for overseas properties for sale on Zoopla
Property expert Simon Conn says it is not surprising that so many people return from their summer holiday abroad and begin planning how to buy a property overseas.
'We've all done it – gone on holiday, stepped away from the daily grind, relaxed in the sun, cocktail in hand, wondering how we can make this feeling last,' he says. 'So when we return to the unpredictable British weather, we hatch a plan of how to buy a property abroad.'
However, he adds a word of caution, saying: 'Many people jet off to the sun and wish they could stay. But holidaying somewhere is not the same as the reality of living there every day.
'When you are on holiday, you wind down a gear and time is your own, but try to visualise what it would really be like if you live there. If you are uprooting your family and will need to work, be aware that it could just be the same routine in a different location.'
Anyone who is considering moving abroad can avoid making some of the most common mistakes by taking a few simple steps.
For example, make sure that the property you are interested in has been built legally as local authorities have been known to demolish homes built too near the shoreline or on unregistered rural land.
| Rank | Keyword |
|---|---|
| 1 | Pool |
| 2 | Beach |
| 3 | Sea view |
| 4 | Garage |
| 5 | Garden |
| 6 | Golf course |
| 7 | River |
| 8 | Detached |
| 9 | Villa |
| 10 | Furnished |
| Source: Zoopla |
He suggests instructing an independent surveyor, ideally one who is not locally based, to check the valuation and comparable properties in the area.
'Never sign up for a property that you have not taken the time to visit. When you do visit, do so during the day and night. Talk to people who already live in the area to get a better understanding of what it is really like.
'And if you do not see the property in real life, what may have looked great in a sales brochure could end up being located in problematic or totally unsuitable areas. Your dream home may actually be situated next to a motorway, a local airfield or a rubbish dump.'
ARE YOU DREAMING OF A HOLIDAY HOME IN SOUGHT-AFTER SPAIN?
Spain is the most popular location among those looking to buy an overseas property, according to Zoopla.
This three-bedroom apartment in Spain's Andalusia is currently for sale on the property portal for €365,000.
It comes with a south-facing terrace, sea views and underground parking. It can be bought directly from the developer Taylor Wimpey Espana.
This Spanish development in Andalusia consists of 92 three-bedroom homes
Each of the modern apartments have large, south-facing terraces with sea views
The spacious apartments are in stunning Andalusia, on the southern coast of Spain
The open-plan living areas include a kitchen and cream-coloured marble flooring
Leisure time! The apartments come with views of the Los Arqueros golf course
Mr Conn says the most important piece of advice is to make sure you know what you are signing.
'The term "lost in translation" is one we are all familiar with, but when it comes to contracts for an overseas property, you could be at risk of experiencing its full impact,' he explains.
'In many cases, it has come to light that the translation is not a true version of the original. In other cases, people have not bothered to have the contract translated at all.
'The safest option is to check with an independent lawyer, or a professional translator who can verify that the translation is a true version of the original. Otherwise, you could unwittingly be agreeing to extra conditions or charges not covered under the original contract.
'Buying a property overseas can be one of the best decisions you ever make, but I would urge you to do your research and take the proper steps before taking the plunge,' he concludes.
Tax implications
It is also important to consider the tax implications of owning a home overseas as this may ultimately decide whether you can afford to buy - and maintain - the investment.
Tim Walford-Fitzgerald, of accountants HW Fisher & Company, said: 'Having a holiday home in the sun is many people's dream, but buying abroad does bring some tax issues.
You may need to complete foreign tax returns
'Countries outside the UK usually tax income earned from letting a property out and may not have the same deduction rules for expenses that UK residents are used to.
'There may be limits on what or how much can be claimed for tax purposes, especially by non-residents.
'Other countries also have different rules when properties are sold or given away. Some have exemptions after a certain period of ownership but others may not. You may need to complete foreign tax returns too.
'Unfortunately, paying the foreign income and capital gains tax doesn't necessarily satisfy the UK taxman. Overseas income need to be recalculated in sterling and under UK rules. Having said that, the tax man does typically acknowledge it when you foot an overseas tax bill.'
And he warns: 'If you are UK resident but don't normally complete a UK tax return you may need to register with HMRC. Don't assume they won't find out - most countries tax authorities are talking to each other these days.
'Finally, keep an eye on exchange rates. This will help protect you against fluctuations when you pay the bills.'
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