The current economic turmoil in US and European nations have led to a sharp fall in property prices there making them extremely lucrative for non-resident Indians as well as resident Indians to invest in. More and more Indians are opting for offshore properties as a second home in exotic locations. However the process of purchasing a property in foreign countries has its own share of complexities, which need to be addressed before committing the money.
Practical Considerations when Buying Property Offshore:
Here are a few practical guidelines that will come handy while investment in foreign countries.
- Make sufficient number of visits to that place during different parts of the year to get a broad overview of the locale.
- Remember there is adequate scope of bargaining at all places around the world and do not swayed by the quoted price.
- Get a consolidated list of all transaction charges, stamp duties and associated fees for buying the property beforehand.
- Acquisition taxes
- Surveying fees
- Foreign office permits
- Double tax treaties
- Large down payment and high interest rate on a mortgage through a foreign-owned bank
- A separate life insurance policy, so your mortgage may be paid off should something happen to you
- Attorney’s fees; and/or
- Realtor’s fees.
- Always negotiate through a reputed property brokerage firm of that country.
- Additionally hire an independent legal advisor to give detailed inputs.
- Time your purchase when the exchange rates of that country’s currency are in your favor.
- Understand the legal implications of your purchase and rules that govern your access to that country.
“The procedure to buy a property varies by region. For example, Singapore permits foreigners to purchase apartments (condominiums) but not land; while Thailand will allow foreigners only a leasehold title to the land for a renewable, but ultimately limited period of time; and in Dubai, apartments are sold as leasehold properties. For each country and property type, the due diligence requirements and purchasing procedures are different,”
Hiring a Real Estate Agent?
It was mentioned that obtaining a real estate agent might make the process of purchasing property in a foreign country easier. Areal estate agent is a licensed professional who is authorized to conduct real estate business in a given state, or in a given country. Real estate agents are educated in real estate matters, and have passed a state board exam in order to obtain their credentials.
Some real estate agents may be dual licensed and can practice law, and still others are licensed notaries. As real estate agents are licensed professionals, they have a duty of care and are held to a standard of care that is reasonable for real estate agents.
Real estate agents may perform some of the following duties:
- Handle standard client forms and questionnaires;
- Review real estate contracts;
- Negotiate pricing, up to the closing of a deal; and/or
- Showcase properties, and guide clients through walk-throughs and open houses.
Do I Need an Attorney to Buy a Property in a Foreign Country?
As you can see, the process for purchasing property in a foreign country is clearly complex. It requires a thorough understanding of foreign property laws, as well as an extensive amount of time, research, planning, and preparation.
A skilled and knowledgeable property lawyer will ensure that you are aware of all purchasing laws and restrictions, as well as help you identify your needs and financing options. An experienced and local property lawyer will also be able to represent you in court, as needed, should any issues arise.
Owning a grand property in foreign nations is no more the domain of the extremely rich anymore. However there is a definite need for detailed analysis and planned approach in order to get a good deal and avoid legal complications subsequently.
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