Do you find yourself constantly traveling overseas to a favorite destination? Do you tend to visit
more than once a year and have dreams of being able to spend even more time in that location? If
that’s the case, it may be time to consider buying a home overseas. Purchasing your own home can
be a wise investment and make your travels that much more enjoyable and comfortable. It may not
even be a vacation house that you have in mind; you might be ready to pack up and move for work
or some other reason, making it your new primary residence.
But before you rush into a purchase, there are some unexpected expenses that you will want to
budget for. Let’s take a look.
Legal Costs Can be Hefty
One of the first expenses to be aware of when buying a home overseas is legal costs. While this isn’t a blanket cost that will apply to all countries, it shouldn’t come as a surprise if you do need to spend money on legal costs when purchasing a home.
Additional Fees, Taxes, and Duties May Be Applied
It is also quite common for different countries to apply specific taxes or duties based on the purchase price of the home. These can differ in price, so you want to be sure you know in advance what those extra costs will be so you can factor them into your budget.
Property bought in Singapore is a good example as there is something called the Buyer’s Stamp Duty (BSD), which is a tax levy. The BSD is applied to any property that is purchased in Singapore and the amount paid will be based on the market value or purchase price of the property. The Property Guru provides people with in-depth information on BSD as well as other duties in Singapore. The stamp duty calculator makes it easy for you to get an estimate by entering in your status (Singaporean, foreigner or permanent resident), how many properties you currently own, the purchase type (single application, joint married, or joint not married), and the property value. Once that information is entered, you’ll get an instant estimate.
It’s not just Singapore that has additional taxes, duties, and stamps applied to the purchase of a home either, since many other countries do the same. Doing your homework in advance will be necessary, which may include speaking to a local professional in the real estate sector to give you the rundown.
Furnishing the House
Let’s also point out that you will likely need to buy at least some furniture. Depending on the house and the deal that you work out it may come furnished but the chances are that, once you move in, you’ll want to add a few pieces. The budget for furnishing the house will differ based on how many items you need to buy, how big the house is, how easy it is to readily access furniture, shipping costs (if applicable), and the type of furniture you are buying.
If you’re trying to stick to a budget, you may wish to purchase just the minimum at first, live with those items, and then figure out what you’re missing and what you would like to upgrade.
What About Upkeep and Maintenance When You Aren’t There?
For those who are investing in a vacation home rather than a primary residence, you’ll also need to be mindful of upkeep and maintenance when you aren’t there. If the house has landscaping, gardens, a pool and other exterior features, then they will need to be cared for even when you aren’t there. This could mean hiring a regular service that comes in and looks after the exterior.
Ongoing Property Costs Should Be Factored In
Just as there will be upkeep that is required year-round, there are also ongoing costs such as utilities. Just because you’re not at the property, doesn’t mean the bills don’t continue. Again, this is an issue that affects those looking to purchase a second home overseas who don’t plan on being there full-time. It is a cost that you’ll need to add to the mortgage when you’re trying to figure out your budget.
How About Estate Agent Fees?
Then there are the estate agent fees which, again, isn’t an arbitrary expense but may be included in the purchase price. Before you start working with an estate agent, it’s a good idea to ask about any fees, how much they are and how they are paid.
Making Sure You Are an Informed Buyer
Buying a home overseas is a very exciting undertaking but, at the same time, it’s something that can start to spiral in terms of costs if you aren’t informed. Doing your research in advance, and making sure you understand what all the rules, costs and fees are for that particular country and market will ensure you’ve budgeted correctly.
Not ready to make any plans yet? We have an entire blog dedicated to saving and investing, just click here to start reading. Or, check out this page by Finance Wand dedicated specifically to real estate investing!
Article written by: Isabella Goode
Business, blogging, technology, and personal development.