When considering buying property overseas many of us focus on the prospect of continuous sun, sea and sand. We have our suitcases packed and are on the plane before we would even think to budget for the hidden costs that we might have to fork out for.
What am I talking about? In many … European countries, such as France, Spain, Portugal and Italy additional local fees and taxes can amount to as much as 10-20% of the purchase price of your dream property! The amount of tax that you will have to pay will depend on the country where you want to buy. The main taxes on overseas properties include a transfer tax – this is similar to stamp duty in Ireland i.e. a tax payable to the government on documents used in the transfer of property and specify you as the new owner!
Other taxes include income tax and capital gains tax. However, Ireland has taxation treaties with some 50 countries – 46 of which are in force. These agreements cover direct taxes, which in the case of Ireland are income tax, corporation tax and capital gains tax i.e. you will not be charged for these taxes twice. However this is a whole other blog post!
You will also need to factor in insurance, registration fees, and solicitor and notary fees.
Most importantly you should hire the help of a tax specialist who knows all the details of the tax situation in the country where you want to buy.