Buying
property overseas has become very popular in the last few years
for people in Ireland. Below you
will find a basic guide to buying property in four popular
destinations for Irish people : Spain, Portugal, France and
Florida (USA). These guides are general and
do not constitute legal advice
.We suggest that you get legal advice so that you can buy the
property in the most tax efficient way.
1. Research the area.
There are lots of companies selling Spanish Property. Firstly,
we recommend that you do a bit of research on the area where
you are considering buying. If you are going to spend tens
of thousands of pounds buying a home, spend a few pounds first
and research the topic.
2. Put together a checklist of what you want -
e.g. near to golf courses, close to the beach, number of bedrooms
etc.
3. Find a Property.
Many Estate Agents offer subsidised inspection
flights so you can view some properties and check out
the local area.
4. Get a Structural Survey.
Most people buying property in Ireland get a structural survey
to insure that the property in good shape. It is advisable
to do the same when you are buying a second hand property in
Spain (or elsewhere)
5. The conveyancing system is very different
to the system of buying in Ireland.
In general, it is possible to make similar
'searches' or enquiries to those we make when you buy a property
in Ireland. But, it is important to note that The Spanish Notary
Public who you sign the legal documents and land transfers
in the presence of is NOT there to give legal advice to either the
buyer or the seller, but is only there to witness the signatures
and to deal with certain administration functions. It is therefore
very important to get independent legal advice, which can usually
be arranged, through your estate agent.
6. Get legal advice (on whose name you should purchase the property
in)
There are a number of options open to you, each with advantages
and disadvantages. It is very important to look at these options
(in conjunction with looking at your existing will, and probably
getting a Spanish will). The potential tax savings of setting
it up properly at this stage are huge down the line as the Spanish
system of Inheritance tax can attract very high rates of tax.
If you gain nothing else from this guide, please take note of
this. The options for purchasing the home are:
# Buying the property in your own name
# In joint names with your partner
# In your children's names who will eventually inherit the property
# In the name of a limited company
# By way of a Family Trust
7. Finance.
Mortgages can be arranged through some Irish lenders or through
a local Spanish lender. Getting finance by way of re-financing
your existing mortgage can allow you to borrow enough to cover
100% of the purchase price, all fees and additional costs such
as buying furniture. Because Ireland and Spain are both members
of the Euro, there are no currency fluctuation problems to
worry about. Generally speaking, local lenders will lend 60
- 70% of the property price.
This
guide is general. There is no substitution for legal advice
.We suggest that you get legal advice so that you can buy the
property in the most tax efficient way.
1. Research the area.
There are lots of companies selling property in Portugal. Firstly,
we recommend that you do a bit of research on the area where
you are considering buying. If you are going to spend tens
of thousands of pounds on a property, why not spend a couple
of pounds researching the topic.
2. Put together a checklist of what you want -
e.g. near to golf courses, close to the beach or city, number
of bedrooms etc.
3. Find a Property.
4. Get a Structural Survey.
Most people buying property in Ireland get a structural survey
to insure that the property in good shape. It is advisable
to do the same when you are buying a second hand property in
Portugal (or elsewhere).
5. The conveyancing system is very
different to the system of buying in Ireland. In general, it is possible to make similar
'searches' or enquiries to those we make when you buy a property
in Ireland. But, it is important to note that The Portuguese
'Notary Public' who you sign the legal documents and land transfers
in the presence of is NOT there to give legal advice to either
the buyer or the seller, but is only there to witness the signatures
and to deal with certain administration functions. It is therefore
very important to get independent legal advice, which can usually
be arranged, through your estate agent.
6. Get legal advice (on whose name you should purchase the property
in)
There are a number of options open to you, each with advantages
and disadvantages. It is very important to look at these options
(in conjunction with looking at your existing will, and consider
getting a Portuguese will). The potential tax savings of setting
it up properly at this stage are huge down the line as the Portuguese
system of Inheritance tax can attract very high rates of tax.
If you gain nothing else from this guide, please take note of
this. The options for purchasing the home are:
# Buying the property in your own name
# In joint names with your partner
# In your children's names who will eventually inherit the property
# In the name of a limited company - Irish, Portuguese or an
'off shore' company.
# By way of a Family Trust
7. Finance.
Mortgages can be arranged through some Irish lenders or through
a local Portuguese lender. Getting finance by way of re-financing
your existing mortgage can allow you to borrow enough to cover
100% of the purchase price, all fees and additional costs such
as buying furniture. Because Ireland and Portugal are both
members of the Euro, there are no currency fluctuation problems
to worry about. Generally speaking, local lenders will lend
60 - 70% of the property price.
This guide is general. There is no substitution
for legal advice. We suggest that you get legal advice so that
you can buy the property in the most tax efficient way.
1. Research the area.
There are lots of companies selling French Property. Firstly,
we recommend that you do a bit of research on the area where
you are considering buying. If you are going to spend tens
of thousands of pounds on a property, why not spend a couple
of pounds researching the topic.
2. Put together a checklist of what you want -
e.g. near to golf courses, close to the beach or city, number
of bedrooms etc.
3. Find a Property.
4. Get a Structural Survey.
Most people buying property in Ireland get a structural survey
to insure that the property in good shape. It is advisable
to do the same when you are buying a second hand property in
France (or elsewhere).
5.
The conveyancing system is very different to the system
of buying in Ireland.
In general, it is possible to make similar
'searches' or enquiries to those we make when you buy a property
in Ireland. But, it is important to note that The French 'Notaire'
who you sign the legal documents and land transfers in the presence
of is NOT there to give legal advice to either the buyer or the
seller, but is only there to witness the signatures and to deal
with certain administration functions. It is therefore very important
to get independent legal advice, which can usually be arranged,
through your estate agent. The process is broken into two stages
(as it is here in Ireland). Firstly you sign a conditional contract,
which can be prepared by a 'Notaire' or an estate agent. You
then sign a formal non-conditional Deed of Sale called the 'Acte
de Vente'. The sale can take up about three months to complete.
6.
Get legal advice (on whose name you should purchase the property
in)
There are a number of options open to you, each with advantages
and disadvantages. It is very important to look at these options
(in conjunction with looking at your existing will, and consider
getting a French will). The potential tax savings of setting
it up properly at this stage are huge down the line as the French
system of Inheritance tax can attract very high rates of tax.
If you gain nothing else from this guide, please take note of
this. The options for purchasing the home are:
# Buying the property in your own name
# In joint names with your partner
# In your children's names who will eventually inherit the property
# In the name of a limited company
# In the name of a SCI (a type of French company used to own
and manage properties in France)
# By way of a Family Trust
7. Finance.
Mortgages can be arranged through some Irish lenders or through
a local French lender. Getting finance by way of re-financing
your existing mortgage can allow you to borrow enough to cover
100% of the purchase price, all fees and additional costs such
as buying furniture. Because Ireland and France are both members
of the Euro, there are no currency fluctuation problems to
worry about. Generally speaking, local lenders will lend 60
- 70% of the property price.
This
guide is general. There is no substitution for legal advice
.We suggest that you get legal advice so that you can buy the
property in the most tax efficient way.
1)
There are no sales taxes (VAT) on either the purchase
or the sale of Real Property in Florida.
The price you
pay for the
house is the total price. However, there are “closing
costs” when both selling and buying
2)
Included as part of the “closing costs” you
will have the following taxes:
Buying:
If you are buying a property with a mortgage,
then you will pay to the State of Florida Documentary
Stamps on the amount
of the mortgage at the rate of 35 cents for each $ 100 of mortgage.
You will also pay an Intangible Tax at the rate of 2 mills (.002)
on the mortgage amount. So, for example, if you have a $ 100,000
mortgage, you would pay $ 350 Documentary Stamps and
$ 200 Intangible Tax. If you
are paying cash for the property, then you have none of these
taxes.
Selling :
You will pay to the State of Florida Documentary Stamps on
the Deed, which is the full amount of the selling price,
at the rate
of 70 cents per $ 100. For example, on a $ 150,000 house, you
would pay $ 1,050.
3) You will pay Property Taxes to the county in which your
property is located. In the Orlando area, it would either
be Orange, Osceola,
Lake or Polk County. This property tax is paid annually on
the assessed value of your property ( which is usually around
75%
or so of the actual market value of the property ). The amount
of taxes varies greatly with each neighborhood and depends
on facilities and schools in that neighborhood, but an average
amount
for property taxes on a $ 150,000 house would be somewhere
around $ 2,000.
4) The only other taxes you would pay would be taxes on any
profits when you sell your property, but your Accountant
would be able
to help you with that. A non-resident alien is usually
subject to withholding tax here in the USA, which he
then would most
likely be able to claim back as a Foreign Tax Credit on
his Irish tax return.
Legal Costs
1) In the State of Florida, we do not generally use lawyers
for Real Estate transactions, as there is absolutely
no need. All
the legalities are taken care of by Title Companies,
which are used to doing thousands of transactions, most of
which
are standard.
They charge a set fee of only around $ 150 to $ 300,
depending on what has to be done. The most expensive part
of this
whole process is the issuing of Title Insurance, which
basically
protects the property owner ( and the lender, if there
is a mortgage )
from any defects on the title. Most people will be unfamiliar
with the concept of Title Insurance, but it is a system
that has been in use in the States for years (It has
been introduced
in Ireland and is used here by IIB Homeloans and Irish
Life and Permanent in many re-mortgaging cases)
Title insurance can be as much as 1% of the property value,
but there is a move currently to be very flexible on that ( more
news in the future on that subject ). A Buyer can usually be
pretty well assured that there will be no surprises in the future,
since Florida laws are very strict on such things as the recording
of liens. Also there is great protection for Florida property
owners, more so than many other countries.
Closing Costs
1) In addition to the above-mentioned Doc Stamps,
Legal Costs and Title Insurance, there will be
small recording fees to record
the mortgage and the deed. Buyers will need an appraisal to
verify that the value of the property is indeed
at least as much as
they are paying ( if obtaining a mortgage, the lender will
require that ). This is usually around $ 300.
Also, a termite inspection
has to be done to check there is no infestation of termites,
usually around $ 65. Lenders also will require a survey ( around
$ 300 ) and charge around $ 60 to obtain a credit report on
the Borrower and there will be fees from the
Lender and Mortgage
Broker to issue a mortgage, but these fees vary greatly.
You can usually estimate about 2% for closing costs as a Seller
( in addition to Real Estate Broker commissions of around 6%
) and 2.5% - 3.% if you are a Buyer with a mortgage.
Visas
1) No visas are needed for Irish citizens to
enter the USA as tourists and the length of stay
allowed is three months.
You
can apply for an extension to six months.
2) Coming to live in the USA is another matter and can get
quite complicated. One would need to talk to the US Embassy
in Ireland
to check on the various ways of immigrating.
Property Management
1) If you are not planning on coming to live
in the US, you will be well advised to have a
Property Management company
manage
your property. The Florida weather can be quite harsh on
property and if a house is left without regular maintenance,
your investment
can very quickly deteriorate. Also, Florida has its fair
share of pests, such as termites, cockroaches etc, which
need constant
supervision.
2) In order to get the best return on your investment,
you will probably want to rent out your property when you
are
not there.
Your Property Management company will help you rent out
the property, will be responsible for paying your property
bills,
filing your
monthly tax returns ( for the sales taxes and tourist taxes
which have to be collected when you rent out your property
), keeping
licenses up to date, making sure your garden and pool are
regularly maintained ( as grass and weeds can soon overtake
everything
and pools can become green in no time if not taken care
of ).
