Tax
When you've bought your overseas property you need to be aware of all the tax rules and regulations. Here are top tips when owning a property abroad.
Top 10 tips from Property Tax International (PTI)
- Seek independent legal and tax advice: Ensure that your legal representative is independent with no affiliation to the developer and has a good level of English. Look for accreditations and referrals where possible. You should be aware of possible tax breaks available on the property and how and when to pay local income taxes. You should also note what tax implications will arise from owning an overseas property.
- Conduct your extensive research: Check the infrastructure of the area – airports, road networks, public transport, schools, health care, entertainment and employment - if you are looking to rent the property all these factors are important when working out potential returns.
- Visit the location: Talk to the locals and explore the surrounding area further once you've moved in. If at all possible try to visit the area at different times of the year as a place bursting with life in summer may become a ghost town in winter, so make sure you are aware of this when calculating rental income.
- Calculate the true cost of the property: Ensure you are aware of all the associated costs of the property, which will allow you to budget effectively. Also note what ongoing fees and taxes are due. If you have a mortgage, plan for periods when the property is not rented.
- Be clear what your objectives are: Know what you want from the property. If you are looking for an investment property your criteria will differ from someone looking for say, their dream getaway. If you are clear from the outset what you want you're less likely to be disappointed further down the road.
- Don't sign anything you do not understand: Under no circumstances should you ever sign a document you do not understand. Always seek independent advice or get a document translated by a certified translator.
- Note the number of people of the Notary Deed: Having more than one person on the Notary Deed can lead to specific tax obligations for all included persons. In the case of married couples most countries will allow for joint-assessments but this is not always the case as certain jurisdictions may require two individual returns have to be filed. Where non married co-owners are on the Notary Deed each person may have to file an individual tax return.
- Cultural differences: Each country has their own traditions, customs and cultures and what may be acceptable in your home country may cause offense abroad. The internet will provide all you need to know on a particular country as would a reputable travel guide.
- Don't rush: Take your time. People who act too quickly without doing their own due diligence are the ones most often badly affected in the end.
- Don't assume anything: Question everything and if seems too good to be true, it probably is.
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