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General rules for buying property abroad
Buying a property abroad is practically no different frombuying a property here. In some countries, however, there are restrictions in the form of, for example, the need for state approval (e.g. Hungary), while in others, sales to individuals are prohibited with exceptions (e.g. in Canada, foreigners are prohibited from buying property in urban areas for the next two years). In general, however, this is not a problem in most countries and many countries even attract and encourage foreign investors. In any case, however, you need to be prepared for different customs and rules. In particular, you should watch out for:
- Property values: research the local property market to understand current prices and trends. This will help you to know if an offer is a real bargain.
- Economic stability: Consider the economic stability of the country and region. This is because political stability and economic conditions have the potential to greatly affect the value of the property you buy in the future. In these times of global warming, for example, it’s also a good idea to consider the water supply or whether there is sufficient groundwater.
- Taxes: Familiarise yourself with the tax laws of your chosen country. This includes property taxes, real estate acquisition taxes and any other relevant taxes.
- Currency risks: If you plan to finance the purchase of a property with a loan in another currency, find out the possible risks. Fluctuations in the exchange rate can significantly affect your repayments.
- Services and infrastructure: Check the availability and reliability of basic utilities such as water, electricity and internet. Find out where the nearest hospital is located and the quality of the local healthcare system.
- Rules of residence. Some countries may grant special visas or forms of citizenship based on property ownership, which could be a significant advantage for you.
- Local customs and practices. For example, the south of Italy is notorious for the prevalence of black buildings, while elsewhere you will encounter complex and lengthy bureaucracy.
Tip: Buying property abroad is a significant step and is specific in that it must always be governed by the law of the country in question. Do not leave anything to chance and contact our experienced attorneys. They will provide you with a complete contractual and legal service. They can do it within 48 hours, flawlessly and professionally.
As can be seen, the rules vary considerably from country to country. So let’s at least take a look at the rules for buying property in destinations that are leading among Czechs.
Selling property in Croatia
Croatia can clearly be described as the most popular holiday destination. The crystal clear sea, white mountains and a culture very similar to ours. All of this may tempt Czech residents to settle in this country permanently or to buy a summer residence. But how does it all work?
As a citizen of the European Union, you have the advantage of the same rules that apply to Croatian citizens when buying property in Croatia. However, restrictions apply to certain types of land. Specifically, you cannot buy agricultural land, forests or cultural monuments as a foreigner.
Another advantage is the absence of property tax, except for a holiday home. On the other hand, you will have to pay property acquisition tax, which is 3% of the market value of the property. It should also be mentioned that Croatia is one of the more expensive destinations, and this includes the price of real estate. However, the price depends a lot on the location. The cheapest places to buy property are in the north, around Split or on some of the islands. The cheapest property is around Senj.
Real estate for sale in Italy
Another popular destination is Italy. Here too, as EU citizens , you can buy property on the same terms as Italian citizens. As far as taxes are concerned, you will have to pay a property acquisition tax of 3-7% of the market price of the property and a property tax of 1% of the market price.
Property prices in Italy range really widely. The cheapest places to buy property are in the north and in the big cities. The cheapest property is in the south of Italy, especially in Calabria, Molise and Sicily. Surprisingly, it is also very cheap to buy property in the Abruzzo region, which lies to the east of Rome and offers the Adriatic coast as well as mountains and national parks. Surprisingly, it is possible to buy property in these areas at much more affordable prices than in the Czech Republic. Even more surprising may be the fact that you can buy a house in Italy for as little as a euro.
House in Italy for a euro
You can buya house for a euro in Italy mostly in small southern towns like San Piero Patti in Sicily. These are usually old townhouses in need of a complete renovation. You can buy such a house for as little as one euro, but you have torenovate it within three years .
Italy introduced this programme to attract young people and investors (including foreigners) to areas with an ageing population and a poorer economic situation. So if a townhouse in Sicily is something you’re after, now is your best opportunity.
Property for sale in Spain
We mustn’t forget the popular Spain. Here, too, you can buy a property without any problems. To buy, you will need a so-called NIE (Número de Identificación de Extranjero), which is a special identification number for foreigners thanks to which you will be able to carry out financial transactions. You just need to apply for this number at the Spanish consulate.
It is also possible to buy property in Spain at a reasonable price. Especially in regions such as Alicante or Valencia, where prices on the property market are more favourable than here. As far as taxes are concerned, you cannot avoid the property acquisition tax, which is 6-10% of the price.
A great advantage of buying a property in Spain is the possibility of obtaining a so-called golden visa. This is obtained if you buy a property worth at least 500,000 euros. This visa will give you a residence permit. If you stay in the country for at least ten years, you can also obtain Spanish citizenship on the basis of this visa.
Are you interested in buying a property?
Unfortunately, we cannot help you with buying a property abroad, but you can use our services for buying or selling a property in the Czech Republic. We will provide you with a complete contractual and legal service related to the purchase or sale of a property. We can do it within 48 hours, flawlessly and professionally.
Mortgage on a property abroad
Would you like to buy a property abroad but don’t have enough money saved? No matter, in this case it is also possible to finance the purchase with a mortgage. However, the rules are very different from a mortgage for a property in the Czech Republic. The main reason is that you cannot guarantee a property located outside the Czech Republic, so you cannot guarantee the property you are buying, as is usually the case. So what are your options?
Mortgage from a foreign bank
The first option is to take out a mortgage from a bank in the country where you are going to buy the property. This makes it possible to mortgage the property you are buying directly. However, the conditions for obtaining such a mortgage can be much more difficult for foreigners than for locals. These conditions vary from country to country. Often, however, you will have to have a documented income in an international currency (euro or dollar) or the currency of the country in question. In addition, you will also only be able to obtain a lower amount of money than in the Czech Republic (usually only 50-80% of the market price of the mortgaged property).
Mortgage with a pledge of another property
Another option is to take out a mortgage in the Czech Republic secured by another property in the Czech Republic. This property can be any property intended for residential use. It can be owned by you or by someone else (e.g. your partner or parents), but in this case you will need their consent. You can also mortgage a holiday home. But it must be suitable for year-round living.
Tip: Didn’t find the answer to your question? Email us and you will have an answer from one of our attorneys within 48 hours.
However, the problem with a classic mortgage from a Czech bank is that not every bank will give you a mortgage for a foreign property. But there is another option in the form of an American mortgage, where you don’t need to prove its purpose. At the same time, you won’t get the same favourable terms as with a conventional mortgage.
In conclusion, buying a property abroad can be quite a viable option, but it requires a thorough understanding of the local conditions and specifics. This is because each country has different rules that can greatly affect the whole process from buying and financing.