Buying a holiday home abroad – things to consider
PUBLISHED: 11:51 29 June 2018 | UPDATED: 10:06 04 April 2019
Thinking about the best location for a second home? The first question you need to answer is whether to buy abroad or in the UK. While a holiday home abroad may seem like an attractive option, there’s a lot to consider before you start picturing yourself beside the pool, glass in hand.
Understanding the property buying process
A coastal apartment in Spain, a mountainside cottage in France, or a villa with a private pool in Florida – wherever you choose to buy a holiday property there’s one important thing that you’ll need to do: research.
Each country, and even regions within those countries, will have different regulations, processes and rules when it comes to buying property.
If you don’t have the money to buy a property outright and need a mortgage to buy abroad, there’s the question of whether to get one in the UK or in the country in which you’re buying. Both options have their advantages and disadvantages and will need to be considered carefully.
Each country will also have different legal implications that may crop up during the purchase of a property, for example, some countries will have restrictions on who can own land and property.
You also need to be aware of how much tax you’ll be required to pay, both in the UK and the destination country.
Even if you’ve bought several properties in this country, the property buying process is different elsewhere, so make sure you know exactly what happens when.
It’s also worth considering that an overseas property purchase is not regulated by the Financial Conduct Authority (FCA) so you’ll not be protected by the Financial Ombudsman Service or Financial Services Compensation Scheme if things go wrong.
There’s also the question of whether it’s best to hold fire on buying a property abroad until after Brexit - the fallout for Brits with properties in Europe is unclear, so taking the plunge before all becomes clear is a risk.
Does it offer value for money?
While there are still bargains to be had in buying property abroad, they are not as abundant as they once were. So is buying a holiday home abroad a good investment?
Buying in unfamiliar destinations is one way to get a better deal, but if you need to let the property out to cover costs then you may struggle to get the required bookings – the cheapest place to buy a house on the beach might look great on paper, but if there’s no airports nearby and the area’s not set-up for tourists, then you might struggle to fund your idyllic retreat.
Established destinations will obviously let much easier, but they’re also more expensive in the first place, so there’s lots of weighing up to be done.
There’s also the question of management. If you’re hundreds of miles away in the UK, you’ll need to pay for someone to look after the property in terms of maintenance, cleaning and possibly also bookings. Plus there’s the income tax that you’ll have to pay on any rent you receive.
Combine this with the pound still being weak against the Euro and the dollar, and that great deal can quickly turn into a money pit.
Going the distance
Low cost airlines and frequent flights have made travelling to European destinations much easier, but as the cancellation of hundreds of thousands of flights last year by Ryanair, and the regular strikes by French air traffic controllers show, there’s always the risk of delays and problems that will eat into your valuable holiday time and cause stress at a time when you’re supposed to be relaxing.
It’s something that you need to be aware of when considering the travel implications of buying a holiday home abroad.
If all this just sounds a bit too stressful, buying a holiday home in the UK offers a simpler and potentially better value option. Click here for more reasons to buy a holiday home in the UK.