Whether you’re looking for a retirement villa in the Spanish Costas or a family retreat in rural France, buying a second property abroad requires some careful planning.

Maybe you’re hoping to make your move permanent or you're searching for a holiday home to escape to whenever you please. Whatever the reason behind your decision, there are some important financial considerations to tick off before you start packing.

To make sure you're as informed as possible, international money transfer specialists, Clear Currency, are here to help with a guide to overseas payments.

Why should I buy a property abroad?

Eastern Daily Press: Holiday homes in popular destinations including Spain and Portugal can generate high rental yield during peak seasonHoliday homes in popular destinations including Spain and Portugal can generate high rental yield during peak season (Image: monkeybusinessimages)

There are numerous reasons to purchase property overseas. Perhaps you want somewhere sunny to retire or to go on holiday with your family every year. Since the pandemic, the growing number of homeworkers has left many of us free to relocate in ways we never could before, and wondering if a move abroad could be beneficial.

House prices in the UK have also increased dramatically over the last couple of years, which has lead buyers to search for more affordable housing abroad. Many countries in Europe can offer competitive prices – and with new property hotspots popping up all the time, it could turn out to be a lucrative investment.

You may also decide to rent out your property to boost your monthly income or use it to help pay off the mortgage. Popular holiday destinations in countries like Spain, Portugal and Italy can produce a high rental yield during peak season.

How can I pay for my property abroad?

Unless you're a cash buyer and can make the purchase outright, you'll need to take out an overseas mortgage. In some European countries, mortgage rates are lower compared to the UK, but it's important to make sure you're clued-up on the financial protections available under the local legal system for peace of mind.

Your mortgage can be arranged with a local bank or lender in the area you have chosen to buy. Another option is to re-mortgage your UK home to support your application. Some banks also offer services that allow you to take out a UK mortgage to help you afford your second home. If you’re buying a property abroad to rent out as a source of income, you’ll need a buy to let mortgage.

It's also worth bearing in mind that mortgage deposits can be higher in other countries – in Spain for example, you'll usually need to pay at least 30 per cent.

Will I have to pay stamp duty if I buy a property abroad?

Eastern Daily Press: Consulting an international foreign exchange specialist can help you make smart financial decisionsConsulting an international foreign exchange specialist can help you make smart financial decisions (Image: Getty Images)

If you own a second home, you'll need to pay stamp duty and capital gains tax, even if the house is abroad. It’s essential to understand what taxes you need to pay both in the UK and your chosen destination. It’s worth speaking with an insurance provider or finance expert for advice on these matters.

What regular payments will I need to make?

You’ll need to consider ongoing costs like utility bills, property maintenance, home repairs and renovations. It’s also important to budget for additional moving costs, such as surveyors, legal fees and insurance. If you intend on leasing the property, you’ll have to pay tax on your rental income.

It’s worth researching the cost of living in your chosen country to help you budget, including childcare if you have a family, and healthcare.

Will Brexit affect my overseas property payments?

Fluctuations in the currency market can have an impact when buying a home abroad. Political, socioeconomic and worldwide events like Brexit and the Covid-19 pandemic can affect rates. This may cause an increase in stamp duty, limit mortgage availability and influence the value of the British pound. It could also affect your profits, the value of your property and the affordability of your overseas mortgage.

Consulting a foreign exchange specialist can help you to understand the risks and make smart financial decisions. Although no one can predict how much values may rise or fall, they can help find solutions to safeguard your money.

How can Clear Currency help with international money transfers?

Eastern Daily Press: Owning a property in a popular area abroad can have great financial rewardsOwning a property in a popular area abroad can have great financial rewards (Image: Getty Images/iStockphoto)

We can help you save money and maximise your mortgage currency exchanges. When transferring sizeable sums, thinking about how and when you make your payments can increase your profits.

Using high-street banks to make international payments can involve hidden costs and high fees. We offer an alternative, providing access to competitive exchange rates, a speedy and secure payment platform and no additional fees. This way you'll know exactly how much money you need to pay and what budget you'll have.

We’re able to transfer money across 35 currencies and 130 countries, so wherever you decide to buy, we can help. Our specialists are available from Monday to Friday to answer any questions you may have and it’s free to sign up for an account.

You can use our secure online platform to complete a transfer yourself at any time, access live rates and see the status of your payment. This provides much-needed peace of mind, so you can focus on preparing for your new purchase abroad.

Clear Currency is FCA regulated and has a 5* Trustpilot rating.

To get a free transfer quote using the currency converter, visit clearcurrency.co.uk. Call +44 (0)20 7151 4871 or email edp@clearcurrency.co.uk for more information.