Our recent surveys show that our readers are keen to buy abroad as soon as possible, but understandably have some worries. We look at your top four concerns and how to make a smooth and safe purchase and move.
It’s understandable that many people are worried about the impacts of Brexit, but there are two key points to remember here:
- If you’re buying a holiday home, nothing has changed! Being from outside the EU does not change your right to own property (ask our many clients from America and Australia) and, for a holiday home, even a tourist visa will suffice, as it allows you to stay for up to 90 days in a 180-day period.
- If you want to move abroad permanently, while it will require more paperwork to apply for a visa, it is by no means impossible! In most cases, you’ll just have to prove you can support yourself financially, without relying on the state. Certain countries also offer what’s known as a ‘Golden Visa’ which gives you residency if you buy a property worth over €500,000.
Once you have spent five years on a visa (which you normally renew each year or so), you can gain permanent residency like anyone else. We think it’s more than worth it for that dream of a home abroad!
Again, many are concerned about access to healthcare and the costs post-Brexit. The good news is, that in EU countries, British retirees who receive a UK State pension can make use of public healthcare overseas, paid for by the UK government. This simply requires filling in an S1 form.
Those who are not yet at retirement age can, often, choose to pay into an overseas public healthcare system via voluntary payments. In Spain, for example, this is called the convenio especial.
Of course, your other option is to take out private healthcare. If you do take out private healthcare, we can help you put in place a regular payment plan to keep the costs stable each month if you’re paying from one currency to another, removing any worries of having to budget extra funds.
Our partner company, Property Guides, can provide you with no-obligation recommendations and introductions to health insurance providers overseas. Simply call their free Resource Centre on +44(0)20 7898 0549 or email firstname.lastname@example.org.
3. The legal process
Buying abroad does often mean a different legal process. In Europe, you’ll often find yourself working more with a notary, who will help draft up contracts and oversee the process – which many people actually find makes the entire system much safer, as there’s less margin for error from either party.
What can concern people is having everything ready to go at speed once needed, including finances. In much of Europe, for instance, you will pay a reservation deposit of around €3,000 to €10,000 to have the property taken off the market. Later on, you will sign a deposit contract and pay usually 5-10% of the deposit. In cases like this, we can help you with the option of pre-funding your account. The money is held in a secure, segregated client account, so we can transfer it immediately when you see a property you like. Speak to us about prefunding before going on your viewing trip, and you’ll be in a strong position to make an offer.
4. The possibility of a weak pound
Will the pound weaken over this summer? As we’ve previously discussed, nobody knows for sure, but we do know is that the combination of rising inflation and interest rates, along with the conflict in Ukraine, means that the foreign exchange markets are extremely volatile.
When you agree to a house price, it’s fixed in the currency of that country – let’s say euros. You’ll be paying in pounds, so how much that fixed price in euros will ultimately cost will depend on the rate at the time you send your money. That is, of course, unless you use a currency specialist to plan ahead.
Your Personal Trader here at Smart can lock you in the same exchange rate for up to twelve months, at no extra cost. This is called a forward contract. The way it works is simple:
- Your trader discusses your situation and needs with you and whether a forward contract would be the best option for you
- You and your trader agree to the rate to be locked in and the period of time you’re looking at
- You pay a deposit, usually around 10%, of the total amount you’ll be sending in that period
- We purchase the total amount of currency on your behalf and hold it in our secure, segregated client account
- You pay the balance over the remaining period – and if the exchange rate drops, it doesn’t matter because your rate is fixed
It’s no wonder that this is the route the majority of our buyers go down. To find out more, call your Personal Trader today on 020 7898 0541 or, if you haven’t already, open an account with no obligation to trade.