Mortgage Advice for First Time Buyers, First Time Buyer Mortgages and First Mortgage Advice

Buying Property Abroad

How to buy a property abroad in 14 selected locations: The Local Buying Process, The Pitfalls, Mortgages, Local and Home Taxes and Getting There


Please note that we are unable to keep this section up to date so what's written here should only be viewed as a rough guide. It is not necessarily correct at present.

France
Italy
Spain
Cyprus
South Africa
Florida
The Caribbean
Croatia
Dubai
Slovenia
Slovakia
Montenegro
New Zealand
Australia

Buying a Property Abroad in France

Why buy a Property in France? It's close.

Links to France via Eurostar, Channel Tunnel and cross-channel ferries are cheaper and more frequent than ever. Although French property is no longer 'cheap' by UK comparison there is still opportunity to buy bargain run-down places and renovate. France is primarily a nation of tenants providing a good opportunity for buy-to-let investors. Leaseback schemes - that provide guaranteed rental income for a given term - are still prevalent in France.

Property Abroad: The French property buying process

When you find a property you like and your offer is accepted, an initial contract (Compris de Vente) is drawn up by a notary (Notaire). The buyer puts down a minimum 10 per cent deposit. This is held by the notary in a special account. The house is taken off the market. If the buyer pulls out of the purchase the deposit is not refundable. If the seller pulls out they will receive back double their deposit. The notary will carry out property searches during the next six to eight weeks. During this time, the seller is expected to secure a mortgage if they need one. If the buyer genuinely is unable to secure a mortgage, the deposit is returned. A final contract (Acte de Vente) is signed by both parties. The balance of the purchase price is paid to the seller via the notary.

Property Abroad: France: Pitfalls to watch out for

A notary's duty is to the State - not to either the buyer or the seller. In this case you can use the services of the seller's notary rather than getting your own. However many overseas buyers feel more comfortable with their own notary especially if they can speak English and explain the process. In depth surveys on a property are not commonplace. Instead an architect is called in to estimate the cost of work needed. The French succession law affects who you can leave your property to - even if you have a will. Legal advice should be sought on this BEFORE the point of completion. Buyers of overseas properties should make a will in their chosen country. This will have a knock-on effect on their UK wills.

Property Abroad: French mortgages

To calculate how much you can borrow a French mortgage lender will use an 'indebtedness ratio'. This means that all expenses including UK mortgage, unsecured loans, maintenance fees - together with your French mortgage repayment - must not exceed 40 per cent of your net monthly pay. For mortgages in Euros you will need a minimum 15 per cent deposit. For mortgages in other currencies you will need a minimum 30 per cent deposit.

Property Abroad: French property taxes

Property Tax: Known as Taxe Foncière, this is a tax split between building and land. It varies enormously according to location.

Residential Tax: 'Taxe d'Habitation' is payable by the person living in the property at the start of every year. If you own and live in a property you pay this tax and Taxe Foncière.

Sundry Tax: Translating into Taxe Assimilee, this tax is only payable in certain areas such as busy holiday resorts where local authorities spend more on maintenance and upkeep of the area.

Capital Gains Tax: Otherwise known as Importe sur le plus-values, this is payable at 33 per cent but works on a sliding scale. After the first two years it is reduced by five per cent each year. After 22 years, the amount payable is zero.

Inheritance Tax: Driots de Succession is paid on a complex sliding scale by a spouse on property over 76,000 Euros.

Rental Income Tax: Revenue Foncière is payable on all rental income at a standard rate of 25 per cent.

TVA: The French equivalent of VAT, this is payable on some properties at a rate of 19.6% tax.

Property Abroad: Taxes at home

If you are a UK resident, you will have to pay income tax on rent received from an overseas property. This will be payable at your marginal tax rate but be aware that the rental income could take you into a higher bracket. You could also be liable for Capital Gains Tax on the sale of your home, which can be as high as 40 per cent. Inheritance tax will be payable but what has already been paid in France will be refunded. This is because the UK has signed a double taxation agreement with France that stops you paying Inheritance Tax twice if you own both properties when you die.

Visit www.hmrc.gov.uk and download an I139 form, which explains about tax payable on income from abroad.

    Property Abroad: France: Getting there

    Look at the following links for transport to France:

    www.eurostar.com
    www.flybmi.com
    www.easyjet.com
    www.opodo.co.uk

    Buying a Property Abroad in Italy

    Why buy a Property in Italy? The country has a wealth of derelict farmhouses available at low cost that can be converted into holiday homes. (Italian buyers are generally not interested in this type of property as it is associated with poverty.)

    Property can still be bought cheaply in the south of the country and there are now airlines that fly direct to southern Bari and Brindisi. A handful of Leaseback schemes are still available in Italy if you want to rent out your property.

    Property Abroad: Where start looking for Italian property

    For a taster of what you can buy in Italy for your money and where, look in our properties section.

    Property Abroad: The Italian property buying process

    The buyer makes an initial offer. This will be recorded in a proposal of purchase ('proposta'). If the seller accepts the offer, the buyer must put down an initial deposit ('deposito fiduciario'). This amounts to one per cent of the purchase price. The estate agent holds these funds in a special account. A preliminary purchase contract (preliminare) is signed by both parties. At this point the agreement between buyer and seller becomes legally binding. The buyer puts down a 20 per cent deposit (caparra confirmatoria). This is inclusive of the one per cent previously paid. The notary (equivalent to a UK solicitor) will conduct the relevant searches and carry out the legal work. The final purchase contact (rogito notarile) is signed with the notary - a third party - present. The remaining payment is then transferred to the seller. Buyers of properties abroad should make a will in their chosen country. This will have a knock-on effect on their UK wills.

    Property Abroad: Pitfalls to watch out for when buying a property abroad in Italy

    New property in Italy is notoriously ugly. Mortgage lenders will insist the property is habitable before lending on it. This means a roof, clear access and sanitary facilities. This can cause problems with funding if you want to buy a renovation. Some lenders will refuse to lend on certain types of property due to problems with their structure and title of ownership. The cone-shaped Trullis found in the southern region of Puglia is one example.

    Property Abroad: Italian mortgages

    To calculate how much you can borrow an Italian mortgage lender will use an 'indebtedness ratio'. This means that all outgoings including your UK mortgage, unsecured loans, maintenance fees - together with your foreign mortgage repayment - must not exceed 40 per cent of your net monthly pay. You will need a minimum 20 per cent deposit. You can choose the term over which to take the loan - usually between five and 30 years.


    Property Abroad: Italian property taxes

    If you are planning on becoming a resident, you should do so before buying your property, as you will pay a lot less in taxes. If the property will be your holiday home and is not classed as your main residence the following taxes will apply:

    Registration tax: This is the nearest equivalent to UK Stamp Duty. It amounts to around seven per cent of the purchase price.

    Catasto: This translates into cadastral tax and is the equivalent to the UK Land Registry. It costs one per cent of the purchase price to register your property.

    Mortgage Tax: This pays for the registration of the fact that the property is free from debt. It is unrelated to your own mortgage. It costs two per cent of the purchase price.

    IVA: The Italian equivalent to VAT, this is payable at nine per cent but only on new properties.

    Income Tax: You need to register your property as a second home with the tax authorities. You will pay nothing if you are not renting it out but there must be registered for the 'deemed tax' of one per cent.

    Imposta comunale sugli immobili (ICI): This is the local community tax - or 'rates' - and is payable whether you are in the property or not. It is charged twice a year at 0.7 per cent on the fiscal value of the property.

    Capital Gains Tax: This is payable in Italy if you sell within the first five years at a rate of 15 per cent of the increased value of the property.

    Note: Inheritance Tax was abolished in 2001.

    Property Abroad: Taxes at home

    If you are a UK resident, you will have to pay income tax on rent received from a property abroad. This will be payable at your marginal tax rate but be aware that the rental income could take you into a higher bracket. You could also be liable for Capital Gains Tax on the sale of your home, which can be as high as 40 per cent. You could also be liable for Inheritance Tax.

    Visit www.hmrc.gov.uk and download an I139 form, which explains about tax payable on income from abroad in the UK.

    A Double Taxation Agreement - which prevents UK residents from paying certain taxes twice on property and income from abroad - could apply. Agreements with countries vary so download a Double Taxation Relief Manual DT50 at www.hmrc.gov.uk

      Property Abroad: Italy: Getting there

      In the North of Italy, major destinations of Milan, Bologne and Venice are now all accessible with budget airlines. Florence is less easy to get to.

      In central Italy, all airlines go to Rome. EasyJet flights are also available direct to Sardinia.

      In southern Italy, Ryan Air now operates flights direct to Brindisi and Bari airports. You can also fly direct to Sicily and Naples.

      www.easyjet.co.uk
      www.ba.com

      Buying a Property Abroad in Spain

      Why buy a property in Spain? You are virtually guaranteed all-year-round sunshine.

      Several UK mortgage lenders have Spanish subsidiaries making transparency and communication easier if you require a mortgage. There is a large ex-pat British community.

      Property Abroad: Where to start looking for Spanish property.

      For a taster of what you can buy in Spain for your money and where, look at our properties section.

      Property Abroad: The Spanish property buying process

      When you have found the property abroad you want to buy and an offer has been accepted, a private contract - Contrato de Compraventa - is drawn up and signed by both parties.  At this point the buyer must put down a 10 per cent deposit on the property. This will be held by the notary (notorio) in a special account. The deposit is non-refundable if the buyer pulls out of the deal. If the seller pulls out of the deal, the buyer will receive double the deposit back. Searches and legal work take place over the next month. Title deeds documents (Escritura Publica de Compraventa) are signed by both parties in the presence of the notary. The balance of funds is transferred to the seller. Notary fees and taxes are also paid. The new owner registers the property abroad into their name at the Property Registry Office (Registro de la Propiedad).

      Property Abroad: Spain: Pitfalls to watch out for

      Any overseas property-owner in Spain needs an identification number known as an NIE (número de identificación de extranjero). An application has to made in person at the Office for Foreigners (Oficina de Extranjero) .In Spain the property, not the person, is the debtor. You need to be sure that the property you are buying is debt-free. You must ensure that the land on which the property stands is freehold. Property taxes are relatively high. A mortgage lender will only lend on a property if it has been registered as a habitable dwelling ('a viviendas') and was built over five years ago. Buyers of properties abroad should make a will in their chosen country. This will have a knock-on effect on their UK wills. To obtain or update an existing will, contact our UK solicitor for a quote.

      Property Abroad: Spanish mortgages

      To calculate how much you can borrow, a Spanish mortgage lender will use an index of affordability. This means that all outgoings including your UK mortgage, unsecured loans, maintenance fees - together with your foreign mortgage repayment - must not exceed 35 per cent of your net monthly pay. You will need a minimum 30 per cent deposit. You can choose the term over which to take the loan - usually between five and 30 years. Mortgages types are generally confined to variable rates though some fixed rates are available.

      Property Abroad: Spanish property taxes

      Stamp Duty: Known as ITC, this tax is payable on resale property at a rate of seven per cent of the purchase price. ITC is payable on new-build property at a rate of between 0.5 and 1.5 per cent.

      Wealth tax: This is payable at a rate of between 0.2 and 2.5 per cent. There is no exemption band for non-residents.

      VAT (IVA): This is payable at up to seven per cent of the property value.

      Capital Gains Tax: If you are a non-resident in Spain, Capital Gains Tax is payable at the staggering rate of 35 per cent.

      Inheritance Tax: The payment of this tax will depend on the deceased's relationship with the beneficiary but it can reach up to 82 per cent.

      Property Abroad: Taxes at home

      If you are a UK resident, you will have to pay income tax on rent received from a property abroad. This will be payable at your marginal tax rate but be aware that the rental income could take you into a higher bracket. You could also be liable for Capital Gains Tax in the UK on the sale of your home, which can be as high as 40 per cent. Inheritance tax could also be payable in the UK.

      Visit www.hmrc.gov.uk and download an I139 form, which explains about tax payable on income froma property abroad in the UK.

      A Double Taxation Agreement - which prevents UK residents paying certain taxes twice on property and income from abroad - could apply. Agreements with countries vary so download a Double Taxation Relief Manual DT50 at www.hmrc.gov.uk

        Property Abroad: Spain: Getting there

        Look at the following links for cheap flights to Spain:

        www.cheap-flights-to-spain.co.uk
        www.thomsonfly.com
        www.bmibaby.com
        www.ba.com

        Buying a Property Abroad in Cyprus

        An essential background

        Cyprus was a British Colony until 1960. In 1974 Cyprus was invaded by the Turks. They claimed the north of the island (about one third) as their own.

        Northern (Turkish) and Southern (Greek) Cyprus are still regarded as two separate countries. Since April 2003 all Cypriots can roam freely between the north and the south. Greek Cyprus in the south - known also as the Republic of Cyprus - joined the EU in May 2004. It will be converting from Cypriot Pounds (CY) to the Euro in 2008.

        Why buy a Property in Cyprus?

        It is warm all year round - the minimum winter temperature is 15 degrees. Now a member of the EU, Greek Cyrus has regulations on services such as healthcare. Northern Cyprus is very cheap. Mortgages in Southern Cyprus will lend on property yet to be built. English is widely spoken.

        Where to start looking for Cypriot property

        For a taster of what you can buy in North and South Cyprus for your money and where, look in our property section.

        Property Abroad: The Cypriot property buying process

        When an offer has been accepted, a reservation fee is payable to the agent or developer to secure the property. The property is taken off the market. During this time, the searches and surveys will be carried out and your lawyer will carry out legal checks against the title of the property. The buyer's lawyer will prepare a Contract of Sale, written in English. The deposit on the property is paid and a completion date - within 28 days - is agreed. At the point of completion, the property changes ownership. Buyers of overseas properties should make a will in their chosen country. This will have a knock-on effect on their UK wills. To obtain or update an existing will, click here to contact our UK solicitor for a quote. Particularly in the USA, a public notary is required in lieu of personal attendance on the day of completion. To obtain a quote for the services of a Public Notary, contact our partner solicitor.

        Property Abroad: Pitfalls to watch out for when buying a property abroad in Cyprus

        Property in Northern Cyprus is cheap because there could be potential problems with proof of title. This is because 163,000 Greeks were forced to abandon their homes when the Turks invaded and the land is still regarded by some as stolen. You will be unlikely to secure a mortgage on a property abroad in Northern Cyprus. Before buying a property, a non-resident in Southern Cyprus must first seek approval from the Council of Ministers. A non-resident is also limited to buying one property no larger than 4013m2. The maximum mortgage term in Southern Cyprus is 15 years. This means high monthly repayments.

        Property Abroad: Mortgages for Greek (Southern) Cyprus

        To calculate how much you can borrow, a Greek Cypriot mortgage lender will use an index of affordability. This means that all outgoings including your UK mortgage, unsecured loans, maintenance fees - together with your foreign mortgage repayment - must not exceed 35 per cent of your net monthly pay. You will need a 30 per cent deposit. The maximum mortgage term in Southern Cyprus is 15 years meaning high monthly payments. Greek Cypriots apply 'simple interest' rather than the UK's 'compound interest' to their mortgages. This means the capital repayment figure stays the same each month and the interest is reduced on a monthly basis as the capital owing is chipped away. Over the term of the mortgage this approach works out cheaper.


        Property Abroad: Greek Cypriot Property Taxes

        Stamp Duty: This is charged at 1.5 per cent of the value of the property for the first CY£1,000 and at two per cent thereafter.

        Property Transfer Tax: This is known as Real Estate Transfer Tax (RETT). It is paid to the Land Registry on completion of the property sale in return for getting the property transferred to the buyer's name. Rates vary from three per cent to eight per cent, depending upon the value of the property.

        Capital Gains Tax: This is levied at the rate of 20 per cent on any profit made.

        Immoveable Property Tax: This unusual tax applies to existing properties and their value in 1980. But, as the first CY£100,000 is exempt and the tax is payable on its worth back in that year, it is unlikely to be payable.

        Note: There is no Inheritance Tax payable on property in Cyprus.

        Property Abroad: Taxes at home

        If you are a UK resident, you will have to pay income tax on rent received from a property abroad. This will be payable at your marginal tax rate but be aware that the rental income could take you into a higher bracket. You could also be liable for Capital Gains Tax in the UK on the sale of your home, which can be as high as 40 per cent. Inheritance tax could also be payable in the UK.

        Visit www.hmrc.gov.uk and download an I139 form, which explains about tax payable on income from abroad in the UK.

        A Double Taxation Agreement - which prevents UK residents from paying certain taxes twice on property and income from abroad - could apply. Agreements with countries vary so download a Double Taxation Relief Manual DT50 at www.hmrc.gov.uk

          Property Abroad: Getting there

          Look at the following links for direct flights to Southern Cyprus:

          www.travelrepublic.co.uk
          www.flydeals.co.uk
          www.ba.com

          Look at the following links for direct flights to Northern Cyprus:

          www.kthy.net/kthyen/html
          www.onurair.com.tr/eng (Cyprus Turkish Airlines)

          Buying a Property Abroad in South Africa

          Why buy a property in South Africa? South Africa offers a stunning range of landscapes - from mountainous to coastal to Farmland - to suit every taste. There is no time difference between South Africa and the UK. The 2010 World Cup is scheduled to take place in South Africa, which means the potential for considerable equity growth on property. There are still some undiscovered 'hot spots'. There is no language barrier.

          Property Abroad: Where to start looking for South African property

          For a taster of what you can buy in South Africa for your money and where, look in our property section.

          Property Abroad: The South African property buying process

          South African property-sellers operate an 'open house' system on Sundays allowing potential buyers to drop in with no appointment. The seller will initially price the property at around 15 per cent more than they expect to achieve. When an offer is accepted, the buyer makes a down payment of 10 per cent of the purchase price. An Agreement of Sale (or Offer to Purchase) is drawn up and signed by both parties. The purchase is now legally binding. Over the next six to eight weeks, the transfer process will take place. This is when an attorney prepares the documentation that will be lodged in the regional Deeds Registry. South Africa is renowned for being the most accurate and efficient country in the world when it comes to recording property owners. Title Registration - when the property changes owners - is the equivalent to a UK completion date. The balance of the property purchase is transferred to the seller and the keys are handed over.

          Property Abroad: South Africa: Pitfalls to watch out for

          The market is dominated by just a handful of real estate agents, who work on the seller's behalf. The attorney will work on behalf of the seller so it is wise to seek your own advice - even for the extra cost it will incur. The property may be eligible for VAT rather than Transfer Tax. VAT (at 14 per cent) is considerably more expensive so know your tax position before you sign the Sale of Contract. Parts of South Africa still suffer a high crime rate so research the area thoroughly before you buy. Buyers of overseas properties should make a will in their chosen country. This will have a knock-on effect on their UK wills. To obtain or update an existing will, contact our UK solicitor for a quote. Particularly in the USA, a public notary is required in lieu of personal attendance on the day of completion.

          Property Abroad: South African mortgages

          To calculate how much you can borrow, a South African mortgage lender will use an index of affordability. This means that all outgoings including your UK mortgage, unsecured loans, maintenance fees - together with your foreign mortgage repayment - must not exceed 35 per cent of your net monthly pay. Any rental income from the property (that is liable to income tax) will be taken into account as long as the South African bank has a copy of the rental agreement. Non-residents need a minimum deposit of 50 per cent. The typical term of a mortgage in South Africa mortgage is 10 years.

          Property Abroad: South African property taxes

          Transfer Duty: This is a tax payable to the State on the transfer of ownership of fixed property. It will be priced at between five and eight per cent of the property, depending on its value.

          VAT: This is payable on some property at a rate of 14 per cent instead of Transfer Tax.

          Stamp Duty: This amounts to around 0.25 per cent of the mortgage amount.

          Capital Gains Tax: Non-residents are not eligible for this if their primary residence is outside South Africa.

          Property Abroad: Taxes at home

          If you are a UK resident, you will have to pay income tax on rent received from an overseas property. This will be payable at your marginal tax rate but be aware that the rental income could take you into a higher bracket. You could also be liable for Capital Gains Tax in the UK on the sale of your home, which can be as high as 40 per cent. Inheritance tax could also be payable in the UK.

          Visit www.hmrc.gov.uk and download an I139 form, which explains about tax payable on income from abroad in the UK.

          A Double Taxation Agreement - which prevents UK residents from paying certain taxes twice on property and income from abroad - could apply. Agreements with countries vary so download a Double Taxation Relief Manual DT50 at www.hmrc.gov.uk

            Property Abroad: South Africa: Getting there

            Currently airlines from the UK only serve Cape Town and Johannesburg directly. On arriving at either of these airports, you will have to catch an internal flight to your final destination. Look at the website for the Airports Company South Africa, which details all airlines, airports and flights within South Africa at www.airports.co.za

            Look at the following links for direct flights to South Africa from the UK:

            British Airways: www.ba.com
            South African Airways: www.flysaa.com
            Virgin Atlantic: www.virgin-atlantic.com

            Buying a Property Abroad: Florida:

            Why buy a property in Florida? It is known as the 'Sunshine State' and guarantees virtually 365 days of perfect weather each year.

            Property tax in Florida is one of the lowest in the world. Disney attracts 40million tourists each year creating a high demand for short-term rentals. There is no language barrier. You can fly direct from the UK to most of Florida's airports. You can choose to borrow in Sterling or UK Dollars depending on exchange rates at the time.

            Property Abroad: Where to start looking for a holiday property in Florida

            For a taster of what you can buy in Florida for your money and where, look in our property section.

            Property Abroad: The property buying process in Florida

            In America, the realtor (estate agent) works on behalf of the buyer, not the seller. However the buyer does not pay the realtor.

            To find a good realtor visit www.realtor.org - the website of the National Association of Realtors.

            The realtor will note the buyer's criteria and find a property on their behalf.

            The realtor will contact the listing broker, who works on behalf of the seller, and negotiate a price for the property.

            When an offer is accepted, a sale contract is drawn up, subject to finance and an inspection and termite report. The sale contract will also state a provisional completion date - usually within a month.

            The buyer pays a 'face deposit' of around $5,000.

            If the buyer changes their mind, they will lose the deposit.

            At completion date the balance of the funds are transferred to the seller.

            In American jurisdictions, all the paperwork needs to be notarised.

            Property Abroad: Florida: Pitfalls to watch out for

            Florida introduced 'zoning restrictions' in 1990. These are stringent government rules that set down minimum terms of tenancy in certain areas. Florida has recently witnessed a property-price boom. Property investors should take a long-term view on capital appreciation. Lenders in Florida take around 30 days to approve a mortgage application. It is wise to have a mortgage approved before arriving in the USA. Property maintenance costs are high. You need to subtract at least 20 per cent from your anticipated rental income. Buyers of overseas properties should make a will in their chosen country. This will have a knock-on effect on their UK wills. Obtain or update an existing will, by requesting a quote from our property solicitor.

            Property Abroad: Florida: US mortgages

            To calculate how much you can borrow for you property abroad, a mortgage lender in Florida will use an index of affordability. This means that all outgoings including your UK mortgage, unsecured loans, maintenance fees - together with your foreign mortgage repayment - must not exceed 34 per cent of your net monthly pay. Non-residents will need a minimum deposit of 20 per cent of the property valuation. Self-employed borrowers will need a minimum deposit of 25 per cent. US lenders will focus more on the security of the property than affordability. A significant deposit, over your level of income, will therefore increase your chances of borrowing. If you are borrowing in Dollars, US banks will usually calculate your mortgage interest rate against LIBOR (the London Inter-Bank Offer Rate), or against US Prime. Variable and fixed rate mortgages are both available. Mortgage terms are between five and 30 years.

            Property Abroad: Property taxes in Florida

            The US has one of the cheapest taxations systems in the world. When buying property in the US total costs will amount to four per cent of the property value if you are taking a mortgage. If you are buying with cash it will amount to one per cent.

            Stamps and Title Insurance: This is payable on the purchase of the property. The rate varies considerably according to the property value.

            Real Estate Tax: This is payable annually and charged on the property's structure. The cost will vary according to the property's size, value and location but is in the region of $2,000.

            Sales and Tourist Development Tax: This is the equivalent to VAT, which the homeowner must collect from rental income on the property and pass onto the Internal Revenue Service. Together with Tourist Development Tax it will account for around 12 per cent of rental income.

            Capital Gains Tax: This is payable but the rate will depend on a considerable number of factors.

            Property Abroad: Florida: Taxes at home

            If you are a UK resident, you will have to pay income tax on rent received from your property abroad. This will be payable at your marginal tax rate but be aware that the rental income could take you into a higher bracket. You could also be liable for Capital Gains Tax in the UK on the sale of your home, which can be as high as 40 per cent. Inheritance tax could also be payable in the UK.

            Visit www.hmrc.gov.uk and download an I139 form, which explains about tax payable on income from abroad in the UK.

            A Double Taxation Agreement - which prevents UK residents from paying certain taxes twice on property and income from abroad - could apply. Agreements with countries vary so download a Double Taxation Relief Manual DT50 at www.hmrc.gov.uk

              Property Abroad: Florida: Getting there

              Direct flights are available to airports at:

              Jacksonville
              Fort Lauderdale
              Fort Myers
              Miami
              Orlando
              Palm Beach
              Tampa

              The following airlines fly to one or more of these destinations:

              www.virgin-atlantic.com
              www.klm.com
              www.continental.com
              www.ba.com

              Buying a Property Abroad in the Caribbean

              Why buy a Property in the Caribbean? Temperatures average around 26 degrees and it is sunny all-year-round. English is widely spoken Many islands do not charge tax to non-resident property purchasers in order to attract investment from overseas. There are 30 islands to choose from.

              Property Abroad: The Caribbean: Where to start looking for Caribbean Property

              For a taster of what you can buy in the Caribbean for your money and where, look in our 'properties' section.

              Property Abroad: The property buying process in the Caribbean

              Islands may vary in terms of buying procedures from the following:

              Once an offer has been accepted, a Purchase Agreement is drawn up and sent to the purchaser's attorney. The agreement is signed by both parties. The purchaser pays a deposit of 10 per cent of the purchase price. The deposit is held in escrow until completion. At completion, the vendor's attorney then draws up a Conveyance, which is signed by both parties. The remaining funds are transferred to the seller. Buyers of overseas properties should make a will in their chosen country. This will have a knock-on effect on their UK wills. To obtain or update an existing will, contact our UK solicitor . Particularly in the USA, a public notary is required in lieu of personal attendance on the day of completion.

              Property Abroad: The Caribbean: Pitfalls to watch out for

              Even long-term equity growth on property is not guaranteed. The Caribbean islands still have a very fragile economy. Securing finance is difficult - around two out of 10 applicants are turned down for a mortgage. Lenders on some islands, such as Jamaica, can charge mortgage interest rates of 22 per cent.

              Property Abroad: The Caribbean: Caribbean mortgages

              Banks in the Caribbean will not make it easy to borrow. They do not have much money to risk. You can borrow in Sterling or US Dollars, depending on the island. To calculate how much you can borrow a mortgage lender in the Caribbean will use an index of affordability. This means that all outgoings including your UK mortgage, unsecured loans, maintenance fees - together with your foreign mortgage repayment - must not exceed 36 per cent of your gross monthly pay. Non-residents will need a minimum deposit of 30 per cent of the property valuation, although some islands will want 50 per cent. The maximum mortgage term across all islands is 15 years.

              Property Abroad: Property taxes in the Caribbean

              As the governments want to encourage wealthy investors from overseas, if you can afford to buy, there are then few property taxes to pay:

              Stamp Duty: This is charged at one per cent of the value of the property.

              Land tax: This is payable at between 0.2 per cent and 0.7 per cent of the value of the property.

              Income tax: This is charged at 20 per cent at the basic rate and 40 per cent at the higher rate.

              VAT: This is charged at 15 per cent. It was only introduced in 1997.

              Property Transfer Tax: This is payable on the sale, gift or any other transfer of land. If you are non-resident it is charged at 10 per cent.

              Property Abroad: Taxes at home

              If you are a UK resident, you will have to pay income tax on rent received from a property abroad. This will be payable at your marginal tax rate but be aware that the rental income could take you into a higher bracket. You could also be liable for Capital Gains Tax in the UK on the sale of your home, which can be as high as 40 per cent. Inheritance tax could also be payable in the UK.

              Visit www.hmrc.gov.uk and download an I139 form, which explains about tax payable on income from abroad in the UK.

              A Double Taxation Agreement - which prevents UK residents from paying certain taxes twice on property and income from abroad - could apply. Agreements with countries vary so download a Double Taxation Relief Manual DT50 at www.hmrc.gov.uk

                Property Abroad: The Caribbean: Getting there

                You can fly direct to St Lucia, Barbados and Antigua. Look at the following links:

                www.thompsonflights.com
                www.flightsforless.co.uk
                www.virgin-atlantic.com

                Buying a Property Abroad in Croatia

                Why buy a Property in Croatia? In investment terms, it could be regarded as an untapped market. Its long coastline, looking out on the Adriatic Sea, is one of the most beautiful in Europe. The right property will generate a healthy rental yield. Croatia is soon set to join the EU.

                Property Abroad: Where to start looking for Croatian property

                For a taster of what you can buy in Croatia for your money and where, look in our 'properties' section.

                Property Abroad: The property buying process in Croatia

                Before you make an offer, employ a lawyer that will work just on your behalf. Once an offer has been accepted, a Pre-contract Agreement is drawn up. Before signing, make sure your lawyer has checked for title disputes before. The buyer pays a 10 per cent deposit. At this stage the contract is legally binding and the deposit is non-refundable if the buyer pulls out. If the seller pulls out, it is refundable. The balance of the funds is paid to the seller. Legal and estate agent fees are also payable. The Final Contract is signed by both parties in the presence of a notary. The property is only officially registered with the Land Registry when the buyer has sought permission from Croatia's Ministry of Foreign Affairs. Although this can take up to 12 months, you are permitted to move in during the application process. You can avoid making this application if you set up as a business. However, the law is soon expected to be scrapped. Buyers of properties abroad should make a will in their chosen country. This will have a knock-on effect on their UK wills. To obtain or update an existing will, contact our UK solicitor for a quote. Particularly in the USA, a public notary is required in lieu of personal attendance on the day of completion. To obtain a quote for the services of a Public Notary, click here to contact our property solicitor.

                Property Abroad: Croatia: Pitfalls to look out for

                The property in some pockets is very expensive. The market is still volatile. There is a big problem with title deeds disputes on property after the civil war. Flights to some areas of the country are still irregular. Croatia is not serviced by budget airlines.

                Property Abroad: Croatian mortgages

                Until recently, you would not be able to secure any mortgage on a property abroad in Croatia. You will need at least a 40 per cent deposit. The mortgage term is a maximum of 15 years Funds are available only in Euros. You will have to be 65 or under to be eligible.

                 
                Property Abroad: Property taxes in Croatia

                Real estate transfer tax: This is payable at 10 per cent if you purchase a resale home. It is payable at two per cent for an off plan property.

                Capital Gains Tax: This is payable at 35 per cent if you sell the property within three years of purchase.

                Non-resident's Tax: This is paid on an annual basis at around 90 pence per square metre of floor.

                Ground tax: This is paid annual basis at around 15 pence per square metre of floor.

                Property Abroad: Taxes at home

                If you are a UK resident, you will have to pay income tax on rent received from an overseas property. This will be payable at your marginal tax rate but be aware that the rental income could take you into a higher bracket. You could also be liable for Capital Gains Tax in the UK on the sale of your home, which can be as high as 40 per cent. Inheritance tax could also be payable in the UK.

                Visit www.hmrc.gov.uk and download an I139 form, which explains about tax payable on income from abroad in the UK.

                A Double Taxation Agreement - which prevents UK residents from paying certain taxes twice on property and income from abroad - could apply. Agreements with countries vary so download a Double Taxation Relief Manual DT50 at www.hmrc.gov.uk

                  Property Abroad: Croatia: Getting there

                  Look at the following links for direct flights to Dubrovnik, Split, Zagreb, Rijeka and Pula:

                  www.croatiaairlines.co.uk
                  www.ba.com
                  www.aerlingus.com

                  Buying a Property Abroad in Dubai, United Arab Emirates

                  Why buy a Property in Dubai? In 2001 the Dubai Government agreed to allow expatriates to take a 99-year lease on property. The following year, the Crown Prince of Dubai, Sheikh Mohammed bin Rashid Al Maktoom, issued a decree allowing overseas investors to buy property on a freehold basis. These developments have made Dubai an appealing place for overseas investors. There is no tax payable on property. Dubai offers guaranteed hot weather all-year-round. Crime levels are at some of the lowest in the world. Buying property in Dubai gives you automatic residency - although not necessarily a work permit.

                  Property Abroad: Dubai: Where to start looking for property in Dubai

                  For a taster of what you can buy in Dubai for your money and where, look at our properties section.

                  Property Abroad: The buying process in Dubai

                  Most property in Dubai is bought off plan from new developments. When you have found an apartment you like, a reservation fee of £1,000 is payable to the developer. This is non-refundable. The remainder of the deposit - usually between 10 to 15 per cent of the purchase price - is payable within seven days. Stage payments then vary depending on the stage of construction that has been reached. A contract is issued in English. It is important to take your own legal advice before signing. The final deeds are signed by both parties in the presence of a Dubai notary. The deeds are then recorded with the Dubai Land Registry. The property changes ownership. Buyers of overseas properties should make a will in their chosen country. This will have a knock-on effect on their UK wills. To obtain or update an existing will, contact our UK solicitor for a quote. Particularly in the USA, a public notary is required in lieu of personal attendance on the day of completion. To obtain a quote for the services of a Public Notary, contact our property solicitor.

                  Property Abroad: Dubai: Pitfalls to watch out for

                  Buying offplan can be a problematic and lengthy process. Although it is reported to be getting better. Buying property might be cheap in comparison to the UK but the cost of living is the same as in Central London. There are strict laws on drinking alcohol at home and women must dress modestly.

                  Property Abroad: Mortgages in Dubai

                  It can be difficult to secure a mortgage from a lender in Dubai. UK banks with overseas subsidiaries such as HSBC offer mortgages in Dubai. To calculate how much you can borrow, a mortgage lender in Dubai will use an index of affordability. This means that all outgoings including your UK mortgage, unsecured loans, maintenance fees - together with your foreign mortgage repayment - must not exceed 35 per cent of your net monthly income. Non-residents will need a minimum deposit of 40 per cent of the property valuation. The maximum mortgage term is 25 years.

                  Property Abroad: Property taxes in Dubai

                  There are no taxes on buying property in Dubai. There is no income tax in Dubai.

                  Property Abroad: Taxes at home

                  If you are a UK resident, you will have to pay income tax on rent received from a property in Dubai. This will be payable at your marginal tax rate but be aware that the rental income could take you into a higher bracket. You could also be liable for Capital Gains Tax in the UK on the sale of your home, which can be as high as 40 per cent. Inheritance tax could also be payable in the UK.

                  Visit www.hmrc.gov.uk and download an I139 form, which explains about tax payable on income from abroad in the UK.

                  A Double Taxation Agreement - which prevents UK residents from paying certain taxes twice on property and income from abroad - could apply. Agreements with countries vary so download a Double Taxation Relief Manual DT50 at www.hmrc.gov.uk

                    Property Abroad: Dubai: Getting there

                    Look at the following links for direct flights to Dubai from all major airports in the UK:

                    www.emirates.com
                    www.ba.com
                    www.cheapflights.co.uk

                    Buying a Property Abroad in Slovenia

                    Why buy a Property in Slovenia? It offers unspoilt and spectacular Alpine scenery of rivers, meadows and castles. Slovenia joined the EU in May 2004. In the summer of 2004, the real estate market was freed of all previous buying restrictions for other EU members. Tourism has been the fastest-growing industry in the country over the last five years. Slovenia may see further property price rises when it adopts the Euro in 2007. The buying and taxation processes are straightforward. As well as long, warm summers, its climate caters for skiing and other winter activities.

                    Property Abroad: The buying process in Slovenia

                    When you have found a Slovenian property you like, submit an offer to the agent in - this should usually be in Euros. Once the offer is accepted, your lawyer will make an application for an EMSO number. This is a number that Slovene citizens are given at birth. The buyer pays a 10 per cent deposit to secure the purchase and preliminary contracts are translated and signed. Land registry searches are carried out. These usually only take around two days. Exchange contracts are translated and signed. A completion date is negotiated. This can be quite quick in Slovenia. The remaining funds are transferred from the UK in Euros. Buyers of overseas properties should make a will in their chosen country. This will have a knock-on effect on their UK wills. To obtain or update an existing will contact our UK solicitor for a quote. Particularly in the USA, a public notary is required in lieu of personal attendance on the day of completion. To obtain a quote for the services of a Public Notary contact our property solicitor.

                    Property Abroad: Slovenia: Pitfalls to watch out for

                    There is a period of seven years after a possible accession during which the Slovene government would be able to reapply restrictions on purchases by non-nationals. You will be unable to finance your home with a mortgage.

                    Property Abroad: Mortgages in Slovenia

                    Currently non-residents cannot secure a mortgage on a property in Slovenia. You will have to fund the purchase outright.

                    Property taxes in Slovenia

                    VAT: This is payable at a rate of 8.5 per cent of the valuation, not purchase price. If it is classified as tourist accommodation, you will pay 20 per cent.

                    Property Abroad: Slovenia: Taxes at home

                    If you are a UK resident, you will have to pay income tax on rent received from a property in Slovenia. This will be payable at your marginal tax rate but be aware that the rental income could take you into a higher bracket. You could also be liable for Capital Gains Tax in the UK on the sale of your home, which can be as high as 40 per cent. Inheritance tax could also be payable in the UK.

                    Visit www.hmrc.gov.uk and download an I139 form, which explains about tax payable on income from abroad in the UK.

                    A Double Taxation Agreement - which prevents UK residents from paying certain taxes twice on property and income from abroad - could apply. Agreements with countries vary so download a Double Taxation Relief Manual DT50 at www.hmrc.gov.uk

                      Property Abroad: Slovenia: Getting there

                      EasyJet flies to Slovenia's capital, Ljubljana, in Brnik, from Stansted on a daily basis. Slovenian airline, Adria Airways also flies regularly from Gatwick to Ljubljana.

                      www.easyjet.co.uk
                      www.adria-airways.com

                      Buying a Property Abroad in Slovakia

                      Why buy a property in Slovakia? Slovakia became a member of the EU in May 2004. Bratislava is only 40 miles from Vienna in Austria. Commuters travelling into work in Vienna may push up prices. Borders to neighbouring countries are due to be relaxed by 2008.

                      Property Abroad: Where to start looking for Slovakian property

                      For a taster of what you can buy in Slovakia for your money and where, look in our properties section.

                      Property Abroad: The Slovakian property buying process

                      Once an offer has been accepted, the buyer pays a 10 per cent deposit to secure the sale. A Pre-purchase Agreement signed by both parties. If the buyer changes their mind the deposit is refundable minus agent's expenses. If the seller changes their mind, they will pay agent fees and refund the deposit to the buyer. Searches are carried out and a Final Contract is prepared and translated. Both parties sign the Final Contract and the funds are transferred to the seller. The buyer will now have to wait four weeks for the Land Registry (Katatser) to transfer ownership. Buyers of overseas properties should make a will in their chosen country. This will have a knock-on effect on their UK wills. To obtain or update an existing will contact our UK property solicitor for a quote. Particularly in the USA, a public notary is required in lieu of personal attendance on the day of completion. To obtain a quote for the services of a Public Notary to contact our property solicitor.

                      Property Abroad: Pitfalls to watch out for

                      There are still restrictions on non-residents buying within agricultural or forest land. There can be issues with title deeds and debts tied to the property. Some property has also been built illegally. It is imperative to seek legal advice.

                      Property Abroad: Mortgages in Slovakia

                      There is no generic affordability criteria laid down by Slovak banks. A benchmark that Slovak lenders use, will require that your net monthly income - minus all expenses including your UK and Slovak mortgages - must be three times higher than the monthly repayment on your Slovak mortgage. You will need a minimum deposit of 30 per cent of the property valuation. Only repayment mortgages are offered. You can choose to borrow between four and 30 years. A typical Slovak mortgage term is 15 years. Slovak lenders charge mortgage arrangement fees typically between 0.3 and one per cent of the loan. 

                      Property Abroad: Property taxes in Slovakia

                      Real Estate Tax: This is an annual tax payable on plots of land and buildings. It is charged per square metre.

                      Capital Gains Tax: This is payable at a flat rate of 19 per cent. You become exempt if you have owned a residential apartment for two or more years.

                      Notes: Inheritance and Gifts Taxes were abolished from 1 January 2004. The tax year in Slovakia is the same as the calendar year.

                      Property Abroad: Taxes at home

                      If you are a UK resident, you will have to pay income tax on rent received from a Slovak property abroad. This will be payable at your marginal tax rate but be aware that the rental income could take you into a higher bracket.

                      You could also be liable for Capital Gains Tax in the UK on the sale of your home, which can be as high as 40 per cent. Inheritance tax could also be payable in the UK. Seek tax advice

                      Visit www.hmrc.gov.uk and download an I139 form, which explains about tax payable on income from abroad in the UK.

                      A Double Taxation Agreement - which prevents UK residents from paying certain taxes twice on property and income from abroad - could apply. Agreements with countries vary so download a Double Taxation Relief Manual DT50 at www.hmrc.gov.uk

                        Property Abroad: Slovakia: Getting there

                        Daily low cost airlines fly from Stansted to Bratislava airport. The flight takes about one hour and 20 minutes. Flights are also available from Southampton, Heathrow and Birmingham - via Prague - to Slovak airports.

                        www.ryanair.com
                        www.easyJet.com

                        Buying a Property Abroad in Montenegro

                        Why buy a Property in Montenegro? The country is friendly and the scenery is stunning. Montenegro is often described as the 'pearl of the Adriatic'. There are no restrictions on overseas investors buying property. Title of the property is secure.

                        Property Abroad: Where to start looking for property in Montenegro

                        See our Property section.

                        Property Abroad: The property buying process in Montenegro

                        When you have found the property you want to buy and an offer is accepted, a Preliminary Contract is signed. The buyer puts down a 10 per cent deposit. Two conditions must then be met. Justus Titulus provides legal entitlement to the property and Modus Aquirendi registers the property with the Area Property Registry. Your lawyer will do this on your behalf. The signatures on the contracts must be certified by a court in Serbia or Montenegro. The remaining balance of funds is transferred to the seller. The property ownership has changed hands. Buyers of overseas properties should make a will in their chosen country. This will have a knock-on effect on their UK wills. To obtain or update an existing will, contact our property solicitor for a quote. Particularly in the USA, a public notary is required in lieu of personal attendance on the day of completion. To obtain a quote for the services of a Public Notary, contact our property solicitor.

                        Property Abroad: Montenegro: Pitfalls to watch out for

                        Although a buyer can own a property freehold, land is owned leasehold. Disputes can arise if the seller does not sign over power of attorney, which gives the new owner full control of the land. Property is not surveyed in Montenegro. You will have to organise this from the UK.

                        Property Abroad: Mortgages in Montenegro

                        Currently non-residents cannot secure a mortgage on a property in Montenegro. You will have to fund the purchase outright.

                        Property Abroad: Taxes in Montenegro

                        Property Transfer Tax: This is levied at five per cent on the transfer of ownership of a residential property.

                        Purchase Tax: This is set at a rate of two per cent of the valuation.

                        VAT: This is payable on new-build property at a rate of five per cent.

                        Property Abroad: Taxes at home

                        If you are a UK resident, you will have to pay income tax on rent received from a holiday home in Montenegro. This will be payable at your marginal tax rate but be aware that the rental income could take you into a higher bracket. You could also be liable for Capital Gains Tax in the UK on the sale of your home, which can be as high as 40 per cent. Inheritance tax could also be payable in the UK.

                        Visit www.hmrc.gov.uk and download an I139 form, which explains about tax payable on income from abroad in the UK.

                        A Double Taxation Agreement - which prevents UK residents from paying certain taxes twice on property and income from abroad - could apply. Agreements with countries vary so download a Double Taxation Relief Manual DT50 at www.hmrc.gov.uk. Contact a tax expert on home taxes and tax planning.

                          Property Abroad: Montenegro: Getting there

                          There are two airports in Montenegro - Tivat and Podgorica. Croatia's Dubrovnik airport is a 16 km drive over the border. Direct flights from the UK are limited but a daily service operates from London to Belgrade. From there you will have to catch an internal flight to (duration around 40 minutes) on to Tivat or Podgorica.

                          www.charterflights.co.uk
                          www.justtheflight.co.uk

                          Buying a Property Abroad in New Zealand

                          Why buy a Property in New Zealand? It is one of the world's top five safest places. Overseas investors are welcomed and freehold property is common. New Zealand is seeing property price rise on average 10 per cent per annum. There are no property taxes. You only need a 20 per cent deposit for a New Zealand mortgage. There is a strong rental market. You can ski in the south island.

                          Property Abroad: Where to start looking for property in New Zealand

                          For a taster of what you can buy in New Zealand for your money and where, look in our properties section

                          Property Abroad: The New Zealand property buying process

                          You don't necessarily need a lawyer to buy property in New Zealand. The estate agent is qualified to complete the conveyancing. However it is usually cheaper, as well as more prudent, to pay a lawyer to do this. When you have found the property you want to buy the buyer makes a formal Offer to Purchase in writing. This includes conditions of sale. When the offer is accepted the buyer pays a 10 per cent holding deposit either to the solicitor or the estate agent - depending who is handling the terms of the sale. This deposit will be held for a fixed period of around 10 days or until such time that all conditions for the sale have been met. Both parties then sign an exchange contract, which incorporates the completion date. Completion occurs around three weeks later. Property ownership is transferred. Buyers of overseas properties should make a will in their chosen country. This will have a knock-on effect on their UK wills. To obtain or update an existing will, contact our UK property solicitor for a quote. A public notary may be required in lieu of personal attendance on the day of completion. To obtain a quote for the services of a Public Notary contact our property solicitor.

                          Property Abroad: New Zealand: Pitfalls to watch out for

                          There are limits on where and how much land non-citizens can buy.

                          Property Abroad: Mortgages in New Zealand

                          Mortgage terms last between three and 25 years. It will need to be paid off by the time you are 70 years old. Only repayment mortgage in New Zealand Dollars are available. 

                          Property Abroad: Property taxes in New Zealand

                          For overseas investors, there is no Stamp Duty, Capital Gains Tax, Land Tax, Property Transfer Tax or Inheritance Tax.

                          Property Abroad: Taxes at home

                          If you are a UK resident, you will have to pay income tax on rent received from a property in New Zealand. This will be payable at your marginal tax rate but be aware that the rental income could take you into a higher bracket. You could also be liable for Capital Gains Tax in the UK on the sale of your home, which can be as high as 40 per cent. Inheritance tax could also be payable in the UK.

                          Visit www.hmrc.gov.uk and download an I139 form, which explains about tax payable on income from abroad in the UK.

                          A Double Taxation Agreement - which prevents UK residents from paying certain taxes twice on property and income from abroad - could apply. Agreements with countries vary so download a Double Taxation Relief Manual DT50 at www.hmrc.gov.uk

                            Property Abroad: Getting there

                            You may have to fly to Australia and catch a connecting flight to New Zealand. Qantas flies from Adelaide, Melbourne, Sydney and Brisbane to Auckland in the North Island of New Zealand.

                            www.qantas.com.au
                            www.ba.com

                            Buying a Property Abroad in Australia

                            Why buy a Property in Australia? The real estate market is one of the most transparent and stable in the world. The Australian economy is stable and one of the world's fastest growing.

                            Property Abroad: Where to start looking for property in Australia

                            For a taster of what you can buy in Australia for your money and where, look in our properties section.

                            Property Abroad: The Australian property buying process

                            There are two ways of buying property in Australia - the conventional 'exchange of contracts' route or at auction. Whichever route you take, non-residents need to apply for permission to buy property from Australia's Foreign International Review Board (FRIB). This can take up to 30 days. Visit www.firb.gov.au for more details. If you choose to buy at auction make several visits first to learn how it works. You will need a 10 per cent deposit to put down auction day if you are the highest bidder. This is non-refundable. You should have surveys and any finance required organised ready for auction day. Never bid above your maximum threshold.

                            If you buy conventionally, a Contract of Sale will be drawn up. The buyer pays a holding fee during this process, which is refundable if you change your mind. Once the Contract of Sale is signed, the buyer pays a 10 per cent deposit. This is non-refundable although in some states there is a 'cooling off' period during which time either party can pull out without penalty. After the searches, surveys and pest inspections have taken place, contracts are exchanged. The property changes ownership. Buyers of overseas properties should make a will in their chosen country. This will have a knock-on effect on their UK wills. To obtain or update an existing will, contact our UK property solicitor for a quote. To obtain a quote for the services of a Public Notary, contact our property solicitor.

                            Property Abroad: Australia: Pitfalls to watch out for

                            Non-residents must get approval to buy property from the Australian government. Stamp Duty can be payable on both the property and the mortgage. You may need experience of auctions.

                            Proposed Steps for purchasing a property Abroad in Australia

                            a) Locate desired property – PLEASE NOTE THAT IN THE MAJORITY OF CASES FOREIGN INVESTMENT REVIEW BOARD (FIRB) APPROVAL MUST BE GRANTED FOR ALL NON-AUSTRALIAN NATIONALS ON ALL TYPES OF PROPERTY

                            b) Apply for FIRB approval (see point 1 below)

                            c) Apply for 'Agreement in Principle' from lender

                            d) Once FIRB approval obtained enter into the contract to purchase your property making sure that this is subject to obtaining suitable finance/ satisfactory lender's valuation.

                            Property Abroad: Essential notes for purchasing a property in Australia

                            Property Abroad: Australian mortgages

                            Australia is one of the world's most innovative countries for mortgages. Deals are very flexible and the borrower can often choose if they want to make repayments on monthly or fortnightly basis. Once you have FIRB permission (see above) apply for a mortgage in principal from the lender. To calculate how much you can borrow a mortgage lender in Australia will use an index of affordability. This means that all outgoings including your UK mortgage, unsecured loans, maintenance fees - together with your foreign mortgage repayment - must not exceed 35 per cent of your gross monthly income. Australian lenders will also take into account 70 per cent of proposed rental income into account when calculating affordability. You will need a minimum deposit of 20 per cent. Mortgage terms last between five and 25 years. It will need to be paid off by the time you are 70 years old. Only repayment mortgage in Australian Dollars are available. 

                            Property Abroad: taxes in Australia

                            Stamp Duty: This is payable at up to four per cent of purchase price. It can also be payable on the mortgage.

                            Land Tax: the cost of this tax varies across the country. Victoria has the highest maximum rate at five per cent but it can be as low as 1.5 per cent. It is not payable in the Northern Territories.

                            Property Abroad:Taxes at home

                            If you are a UK resident, you will have to pay income tax on rent received from an overseas property. This will be payable at your marginal tax rate but be aware that the rental income could take you into a higher bracket. You could also be liable for Capital Gains Tax in the UK on the sale of your home, which can be as high as 40 per cent. Inheritance tax could also be payable in the UK.

                            Visit www.hmrc.gov.uk and download an I139 form, which explains about tax payable on income from abroad in the UK.

                            A Double Taxation Agreement - which prevents UK residents from paying certain taxes twice on property and income from abroad - could apply. Agreements with countries vary so download a Double Taxation Relief Manual DT50 at www.hmrc.gov.uk

                              Property Abroad: Australia: Getting there

                              Australian airline, Qantas, flies from London direct to Perth, Melbourne and Sydney. BA flies direct to Perth, Melbourne and Sydney.

                              www.qantas.com.au
                              www.ba.com


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