It is said that no two countries in the world have the same legal systems, nor are the systems and policies which rule the acquisition of property similar. Regrettably, individuals who are purchasing property abroad frequently assume otherwise, making them susceptible of stepping into a mad run with the legal intricacies of a foreign property market.
But because of the European Union, you can now take some comfort in the knowledge that the foreigner buying property abroad are now subjected to similar rules and regulations as the locals or any othe EU citizens for the matter.
But don’t be very laid-back simply because even though the EU have already systematized the property buying procedures, there are still a few amendments completed locally so this mean no single EU country has the same buying procedures. Individual countries have their own property laws.
One great example of this is Spain, in this country, outstanding debts attached to a property becomes the responsibility of the buyer or the new owner. And if you buy a farmhouse or a villa with agricultural land in Italy, your farming neighbors could have the right of pre-emption. This imply they could buy back the land for less than its usual purchase price.
“This is a complicated area of tax and law” warns international estate agent, Knight Frank. So it’d be much better to get someone who’s truly good at these things to be able to make your “buying property aboard” excursion a satisfying one.
One more complication is not just countries but different regions too have their own particular property regulations. For instance, the National Spanish Law on development was revamped and passed by the Valencian Legislature in 1994 which gave local developers in certain circumstances the right to demand payments for infrastructure improvements or to obtain repossession orders.
Outside of the EU – from Eastern Europe to Down Under and the United States to South Africa – the legal aspects of buying property are equally variable.
In Croatia for example, for the moment and pending the anticipated entry into the EU as early as 2006, permission to buy a property must be granted by the Ministry of Foreign Affairs before a purchase contract can be finalized. This can take anywhere from 3 to 12 months which is a very long time already.
In Turkey, foreigners are not allowed to buy property in villages, rural areas or in the vicinity of military land.
In New Zealand, you will find limits on where and how much land non-citizens can purchase, while in Australia, outsiders are restricted to buying new-build properties.
The United States presents its own set of purchase proclivities, for example, although Britons can feely purchase a US holiday home, there are restrictions on how long they can stay in the country every year, for instance, 90 days unless an application is made for a B2 visa.
And in Florida you will confront restrictions in particular areas which limit the number of days per year that you can rent out your property.
While South Africa does not restrict foreign property ownership, ‘non-residents’ whose nominal place of residence, domicile or registration is outside the common monetary area of South Africa have to declare any money they carry to the country to the South African Reserve Bank.
The exigencies of buying property around the globe are hugely variable. But wherever the location, you need to take good care over fundamental legalities – which range from local taxes, registration fees, and stamp duty to zoning laws, death duties and tax treaties.
Take double taxation treaties. These international agreements limit the tax liability for a citizen of one country who’s resident in another – and therefore prevents the same income being taxed in two states. Out of more than 1,300 tax treaties worldwide, the UK has the biggest network, covering more than 100 countries.
Furthermore, do not ignore local property terms. Escrow, ‘tapu’, ‘il rogito’, or settlement might be unfamiliar, but if you are buying property in the US, Turkey, Italy or Australia respectively, these terms are integral to procedure.
And do not presume that a specific housing term in one country will have the same meaning in another ‘Project homes’ in Australia refer to ‘off-the-peg’ architectural designs while in the US a project home is the term for government funded, and sometimes known as ghetto housing.
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