Overseas Property Advice
Want to buy abroad? Items to consider...
Instruct a lawyer to act on your behalf, however easy you think the transaction will be. Potential purchasers are often advised by local estate agents that this is unnecessary and that the developer or vendor’s lawyer will take care of everything, saving the purchaser fees. Here, however, there is a clear conflict of interest and it is essential that you obtain independent legal advice, otherwise it could result in a financial loss for you.
Seek independent legal advice before signing any contract or paying any deposit. Once the contract has been signed or a deposit paid certain commitments have been assumed which may be impossible to avoid or change. It may also be advisable to purchase the property through a foreign company for tax reasons this decision must be made before the signing of the title deed.
Confirm what the conditions of the contract are, and that all necessary documentation is available if the transaction falls through, to ensure that the deposit is fully refundable should the vendor withdraw or have a change of mind on the sale. Beware of the construction deadlines on new developments. Make sure you get an approximate date for handing over ownership and keys. The issuing of official licenses can sustain delays due to building irregularities. This can cause a delay and you may have to wait an extra few months or even a year to get keys to the property.
We advise clients buying property overseas to make a Will in the country where they have bought.
The Pitfalls of Purchasing Property Overseas
When Purchasing Your Property...
The conveyancing laws and practice in other countries are entirely different to those in Ireland. In Spain, for example, property is registered in each locality or region through a Notary, who is a public official. The Notary limits him or herself to the description of the property as it appears in the deed and does not investigate physical boundaries, planning or development in the area and how that may affect the property. The notary ensures that the buyer acquires the property outlined in the deed. They do not play their part in the process until after the contract has been signed and the deposit has been paid at which stage the buyer may have already paid part of the purchase price and committed himself to complying with the contract, which may include waivers of rights the buyer may otherwise have had at law, such as the payment of taxes by the vendor.
Spanish buyers are familiar with these issues whereas an Irish buyer will not be, so tread carefully. In France the system is different again, and can be quite bureaucratic. However, with the guidance of a lawyer to protect your interests, you can be sure to obtain clear and proper title at the end of the day. Whilst in Portugal and Turkey there is absolutely no obligation on developers to provide bank guarantees. It is important, therefore, to take professional advice.
The Tax Implications
People should be advised on local taxes that have to be paid on an annual basis and make themselves familiar with the rate of Capital Gains Tax to be paid if they sell their property.
Planning Regulations
Each country will have its own rules and regulations pertaining to planning legislation. It is important to ensure that developers comply with these planning laws if a property is built. Failure to comply with planning regulations can have serious consequences for house purchasers. It is important that you do your homework.