There are a number of reasons as to why you might want to sell one of your foreign properties. Many decide to do so upon returning to live in the UK, and lots of people sell overseas property that they have inherited.
If you’re considering selling a holiday home or permanently relocating to the UK, we can help you get fantastic value for money. Moneycorp offers competitive exchange rates and low fees to those looking to repatriate their money back to the UK.
How to sell property overseas
Selling overseas property is similar in many ways to the process of buying property abroad. Using an estate agent will make your life much easier, as they’ll arrange and oversee viewings on your behalf whilst you get on with things in the UK. They will also be able to give you an indication of your property’s sale price and provide relevant information about the market. We recommend using an estate agent that has experience of selling property to both local and foreign buyers.
There are several things that you can do to make your property more attractive to prospective buyers. Giving the property a deep clean and undertaking repairs will create a pleasanter viewing environment and enhance its value.
Receiving money from an overseas property sale
Unless you’re selling to a fellow British expat, you will most likely need to set a price for your property in a local currency. This means that you will need to take account of the costs that are incurred by currency conversions and foreign exchange rate fluctuations.
Let’s imagine that you are selling a property in the south of France for €520,000. On the day that you have agreed to exchange contracts with the buyer and receive payment, the EUR/GBP rate is 0.89, which would mean you’d receive £462,800. The payment date is delayed by a couple of weeks, however, and by the time you receive this money, the exchange rate has fallen to 0.86, meaning that you instead receive £447,200 – a reduction of £15,600 in just 14 days.
If you are considering selling property abroad and bringing money to the UK, we can enable you to avoid such situations with a forward contract. Forward contracts can be used to secure an exchange rate in advance, thus allowing you to lock in the prevailing exchange rate and save money.
What are the financial implications of selling overseas?
You’ll be liable to pay Capital Gains Tax (CGT) as a UK resident when you dispose of an overseas property. You are required to pay 28% in CGT where your total taxable gains exceed the basic rate limit; if the gains fall under that band, the rate is 18%. As a general rule, you won’t be required to pay CGT if your foreign residence served as your main or only home throughout the entire period of ownership.
You may also be liable to pay tax in the country in which you sold your property. We advise that you check your tax liabilities and obligations with a legal professional before you start the process of selling your overseas property.
How to transfer your money home from your foreign property sale
Repatriating your money will most likely be your top priority once you’ve sold your property. Whilst many will choose to use a high street bank to make this transfer, you can make substantial savings by partnering with a currency specialist like Moneycorp.
UK residents selling overseas property have the option of repatriating their funds with a Moneycorp international payments account. You can enjoy competitive exchange rates and low fees when you make overseas payments, and you can also lock in a prevailing exchange rate for up to two years via a forward contract, ensuring that you secure an exchange rate for your future overseas payments.
Foreign exchange specialists can provide expert guidance on the currency market, in addition to a range of tools that can help you manage your funds. Make the most of your money and ensure that you receive the best value when selling your overseas properties.
What additional fees will I need to pay when selling my property abroad?
Estate agent fees can range from less than 1% to as much as 3.5% +VAT of the price that your home sells for. You’ll also need to pay a solicitor or licensed conveyancer to handle the legal aspects of your property sale.
The key here is to look beyond the headline price of the property that you’re selling – there are currency costs, legal fees, taxes and several other factors that will impact the final amount you’ll receive. By opening an account with Moneycorp, you can benefit from the strong purchasing power we have with our counterparty banks, meaning you'll receive fantastic value for money when selling your property.