Home>February Edition 2016, Blog>International Property – a Buying Comparison

International Property – a Buying Comparison

Looking to buy or invest in property overseas? What are the real costs to both the buyer and the seller, and how easy is the process?

With the 2015 General Election behind us, it is now time to reflect on where the UK sits when it comes to property tax and fees. There is a temptation to assume that the UK pays the highest acquisition costs due to our Stamp Duty thresholds (particularly above £1million+), but this isn’t the only cost that needs to be considered. There is no doubt that the two tax buzz words in property fees and taxes in the UK have been Stamp Duty and Mansion Tax. Mansion Tax can now be put to one side with a Conservative Government, but Stamp Duty still remains a prevailing cost to consider in the purchase process.

Is Stamp Duty the main cost to consider and what are the other charges to be incurred?

Whilst stamp duty is by far the largest purchase cost in the UK, this is not necessarily the case in other countries. Japan is a typical example of this, where stamp duty is minimal and often non-existent. However, ancillary costs make the process extremely expensive. Buyers pay the following: Agents fee – 5%, Acquisition fee – 3%, Registration tax – 2%, Stamp Duty – 0.01% – 0.2%, Legal fees 0.10% and Real Estate Agent’s Fee – 3.15%. Hence their overall buying costs are above 13% all in. Furthermore, buyers in Japan pay for 100% of the entire transaction costs and the seller doesn’t pay any costs at all.

How easy is it to buy property in other countries and how do the costs compare around the world?

In the main buying property overseas is an uncomplicated process, and legally there are very few obstacles in the way, but there are exceptions.

Australia

  • Acquisition of property is subject to Foreign Investment Review Board (FIRB) approval, which typically can be a stringent process and can be difficult due to their strong conservative political stance on foreign rights.
  • Total purchase costs are considered moderate.

Brazil

  • Foreign individuals and non-residents may invest in urban properties through direct ownership from abroad, or through resident companies or partnerships. However there are several restrictions on investments in rural properties.
  • Total purchase costs are considered moderate.

France

  • There are no restrictions on foreign ownership.
  • Total purchase costs are considered low.

Germany

  • There are no restrictions on foreign nationals buying property in Germany. Financing is possible for foreigners, but should not be expected to cover more than 60% of the purchase price.
  • Total purchase costs are considered high.

Hong Kong

  • Foreigners, in general, can buy properties such as condominiums in Hong Kong and rent out without restriction. However, Hong Kong does restrict certain nationalities.
  • Total purchase costs are considered high.

India

  • A foreign national cannot buy any real estate in India, unless they can prove they live in the country for 183 days per year. Tourist visas last for 180 days.
  • Like the United Kingdom, total purchase costs are considered either very low or very high, depending on the price of the property.

Italy

  • There are no restrictions on foreign ownership in Italy.
  • Total purchase costs are considered high.

Japan

  • There are no legal restrictions on foreigners owning real estate property in Japan.
  • Total purchase costs are considered moderate.

Spain

  • Foreign internationals can trade residential or commercial without restrictions.
  • Total purchase costs are considered moderate.

Sweden

  • There are no legal restrictions on buying property in Sweden.
  • Total purchase costs are considered low.

Switzerland

  • Very restricted for a foreign international to purchase, the government have a stringent quota a system that very few get through. There are also restrictions in selling your property.
  • Total purchase costs are considered low.

UAE

  • Foreign nationals cannot buy freehold properties in designated areas of Dubai. Some sites, such as The Palm, Jumeirah, Emaar Towers, The Greens, International City, and others can be purchased. Residence visas are issued to property owners, which extend to their immediate families.
  • Total purchase costs are considered low

United Kingdom

  • There are no restrictions on foreign ownership.
  • Total purchase costs are considered low to high

United States

  • There are minor restrictions on ownership of property in the United States, but it purely depends on where. Detailed legalities vary from state to state. But on the hole any restrictions are minor for most cases.
  • Total purchase costs are considered moderate.
Buying costs 2014 - 2015


Buying costs 2014 – 2015

Back to blog

Always seek independent advice. This blog has not been approved as a financial promotion by Cogress Limited. We are not responsible for the content of external websites. Potential investors must rely on their own due diligence prior to investing.

What type of investor are you?

I have an annual income of more than £100,000 or an investment portfolio of more than £250,000. Read Statement

I have previous experience of these or other alternative investments, and understand my capital is at risk if I invest. Read Statement

Select your investor type and leave your details below to start benefiting from our expertise


 

2017-09-25T12:18:47+00:00