When purchasing overseas property, each country will have their own fees and taxes which are applicable in the purchase process of real estate. Below is an outline of the various fees, taxes and other associated costs. The specific costs involved in off-plan purchases for international destinations can be found in the Buying Process under the specific country homepages.
N.B. Off-Plan International Media Group strongly advises and recommends that all buyers seek the assistance of a qualified Lawyer/Solicitor before entering into any preliminary or final contract through any reservation deposit and/or final settlement payment.
Restrictions There may be restrictions on non-nationals wishing to purchase in the country of interest and so with that it is worth checking with your local embassy or asking a solicitor prior to you initial search.
Appointing a Lawyer and Making Reservation Deposits Once you have decided to proceed with the purchase of a property, the first step is to set up a meeting with a Lawyer/Solicitor. At the meeting after he/she has explained the buying process (see below for more information) you will be expected to leave a reservation fee/deposit depending on the terms and conditions of the developer (please see individual developer terms and conditions). At this point and only this point is the property officially taken off the market and the price fixed (unless otherwise agreed with the developer). A reservation is expected to be paid by a credit card or bank transfer which is recomended to be made with your lawyer/solicitor with a copy of the credit card receipt/bank transfer order sent to the developer as confirmation of payment.
The Lawyer/Solicitor will then carry out his searches which include, amongst others:
The name of the person or company listed is the legal body to sell the property, "Property Registration Certificate" This will also ensure that there are no debts against the property i.e. outstanding mortgages when the property ownership is transferred.
The boundaries and legal descriptions of the property are set out in the specification document which is included in the development brochure.
The development has the correct legal papers i.e. building licence and occupation licence (Final habitation licence deeming a property fit for habitation).
Stage Payments Applicable to all new developments bought “Off-Plan”. Please refer to the developer’s payment plan that is included in the sales literature relating to the development you intend to purchase.
Completion and Title Deeds In the majority of cases this will take place with your Lawyer/Solicitor present and in some countries be in the presence of a Notary Public.
Snagging Often neglected by many but carries the same importance and indeed weight of the cheque handed over to your Solicitor to pay the developer for the property. Different developers have different rules of engagement when it comes to "Snagging". In some developments the client is invited over to inspect the property before completion and the snagging problems are rectified prior to the handing over of the final instalment and signing the title deeds. In others it is a more lengthy process once the property has been signed over. Check the terms of the developer prior to purchase. Should you like a sample copy of the areas you should be looking for when "snagging" your property please contact us with Snagging Form Request as the subject of your email.
PURCHASE FEES AND TAXES The fees and taxes generally applied to real estate in countries worldwide is outlined below, in some cases not all those outlined below will exist, however your real estate agent or solicitor will inform you of those that are applicable in the location that you intend to purchase in, informing you of those prior to purchase.
Legal Fees Notary/Administration Fees Land Registry Fees. Stamp Duty Value Added Tax (V.A.T.)
For those fees and taxes listed above please see individual countries for more information
OTHER FEES
Community Fees. Paid monthly / Quarterly / Biannually / Yearly for the upkeep of the development (Depends on the terms of the Administrator). In some cases if community fees are paid on a yearly basis i.e. paid fully in advance then there may be a discount). The fees vary from dwelling to dwelling and depends on the size of the development and the facilities on offer.
Provincial Fees. Please consult your lawyer for individual Provinces (if applicable)
Bank Valuations. Please consult your lawyer. Valuations are carried out by the lender.
Translator Fees. Fees may vary from lawyer to lawyer so please consult those applicable on your initial meeting for costs.
Power of Attorney Fees As above also, consult your lawyer
OTHER TAXES The taxes below are ones to considerer when purchasing abroad. As stated above some do not apply in your intended country of purchase and are outlined for general guidance only. Please ask your Lawyer/Solicitor for details.
Municipal Tax Capital Gains Tax Inheritance Tax Wealth Tax Immovable Property Tax, Services Tax Annual Property Tax
OTHER INFORMATION TO CONSIDER Mortgages. When you set up a mortgage you will incur costs. As a general rule allow 1% of the value as a cost.
Survey Fees. The mortgage lender you choose may require an up to date survey of the property and you will have to foot the bill. Please ask your broker for the fees involved
Property Insurance Many mortgage lenders will insist on a form of buildings property insurance as part of the mortgage lending process. It is also always advised to set up home and contents insurance.
Property Management If you are looking to rent the dwelling out on short term holiday lets, unless you are living in the country it is always recommendable to seek the services of a property management company that can arrange handovers and clean between them.
Rental Fees The management company will of course have their fees for their service, however it is worth considering that any income derived from the rental of property may be taxable. You should ask your Lawyer/Solicitor if that applies.
N.B. The information above is set out as a guideline only.
