A significant number of people immigrate to the UK each year and many leave the country as well. Data released by the Office for National Statistics shows that around 588,000 people immigrated to the UK in 2016/2017, and about 342,000 emigrated out of the country during the same time period. This way or that, changing countries of residence requires considerable work. You will need to set up a new bank account, get a new credit card, and rent or buy a home, among other things.
Buying a new home in a foreign country does not have to be complicated, as long as you know what to look for and whose assistance to seek.
Start by establishing if local regulations allow you to purchase a property. For instance, foreigners in the UK may buy a home to live in or for investment. If you plan to move from the UK to India, you will qualify to buy one only as a ‘person resident in India’, as defined in the country’s Foreign Exchange Management Act. Foreign nationals of non-Indian origin who reside outside of India cannot purchase any immovable property in the country.
Once you buy a house, you will need to pay taxes, which, depending on where you live, may come in different forms. If you move from the U.S. to the UK and buy a home here, you may get private residence relief when you sell it, giving you a way to circumvent capital gains tax. However, as an American tax payer, you will become subject to capital gains tax if the home sells for more than $250,000. Just how much you will need to pay as property tax as a homeowner also requires your attention.
Fees for Estate Agents
You may or may not need to pay estate agent fees when purchasing a house depending on the country where you want to make the purchase. If you want to buy a house in the UK, you will not have to pay estate agent fees, but people selling their homes usually pay around 0.75% and 3.5% of the home’s selling price as fees. Buying a home through an estate agent in the U.S. comes with no fees as well. In Germany, though, it is the buyer who typically pays the fee, which may vary from 2% to 6% of the home’s price.
Getting a Loan
Whether or not you may qualify for a home loan as a foreigner depends on where you live. In the UK, citizens from most countries are eligible to apply for home loans, although not many banks offer them. Besides, if you get a home loan as a foreigner, expect to pay a sizeable deposit that may be as much as 40% of the home’s value.
Making the Payment
If you plan to pay for your new home using funds you have in a foreign currency, paying attention to currency exchange fees and exchange rates becomes crucial. While several banks provide international money transfer services, their cost-effectiveness often leaves room for improvement. In such a scenario, using the services of a specialist money transfer company is the ideal way to go. TransferWise and CurrencyFair, leading players in the field, provide international money transfer services to residents of most countries. Some of your other alternatives include OFX, TorFX, and Currencies Direct.
Buying a home is no easy task, especially in a foreign land, given that various aspects require your attention. If you are unsure about what the process entails, consider using the services of a professional. They can help you with the search and also give you all the information you need about local rules and regulations.