2023-10-27 07:52:54
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Buying property abroad can be tempting. However, it is essential to exercise caution and understand the local context before making investment decisions.
Buying real estate abroad with a view to renting it out, to establish a second home or even with a view to retirement, can be tempting. Taxation is sometimes more attractive than in France and property prices are much lower. However, it is essential to exercise caution and understand the local context before making investment decisions.
Study the local real estate market carefully
Before you start buying real estate abroad, it is essential to carefully study the local real estate market. If it is a rental investment, this makes it possible to identify geographical areas with development potential, to evaluate average prices and to ensure that the desired property is not overvalued.
Also be careful to take geopolitical risks into consideration, they must not be underestimated…
Furthermore, if internet tools make it possible to discover a place or visit a property remotely, it is of course preferable to go there to judge on the spot the condition of the property, its location or even the neighborhood.
Find out regarding legislation and regulations
Local laws and regulations are not to be taken lightly and it is important to familiarize yourself with local real estate laws as they can have significant impacts. Indeed, some countries may have restrictions on foreign ownership or specific taxes. For example, in some places it is possible to own a house but not the land on which it is built.
In addition, if you speak little or no language of the country, it will be difficult for you to manage the numerous administrative formalities. This is why generally speaking, to guide you and avoid pitfalls, it is strongly recommended that you be accompanied in all your procedures by local professionals (real estate agents, real estate lawyers, and tax experts).
Be vigilant regarding taxation, particularly in the case of a rental investment that will generate income: you might be double taxed on your rental income if the country in which you are investing has not signed a tax convention with France. Please also note that if you wish to pass the property on to your loved ones, the legislation that applies to real estate inheritance is that of the country where the property is located and not that of France.
Set a budget
As always, to build a realistic budget, you must anticipate expenses: cost of real estate, legal fees, taxes, delegation of rental management to a professional if necessary. When investing in real estate abroad, you sometimes need to take the exchange rate into account, as it can affect the profitability of your investment.
If you need financing, you can apply for a mortgage loan from a French bank. But the risks being higher than in France, the conditions for accessing the loan are generally more restrictive (rate, contribution, guarantees and mortgage, etc.). If you opt for a local bank, as always, study the conditions carefully.
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