Things to look out for when buying property overseas

Buying property overseas is usually more complicated than buying locally. You’ll need to consider a number of risks and might find it more difficult to get a mortgage for a property abroad.

Know the risks when buying property abroad

  • Tax – make sure you account for any tax you’ll be liable to pay, both in the UK and in the country where the property is.
  • Check the paperwork – make sure that you have all the necessary permissions, licences and planning consents before you sign any form of contract or agreement.
  • Exchange rate changes – even a small change to the exchange rate could make a big difference to the value of your property abroad. This could make – or keeping up with mortgage payments unaffordable. 
  • Beware developers and the hard sell – don’t give in to heavy pressure to sign up with a deposit before you’ve had a chance to think carefully and get independent advice.

Getting a mortgage for a property abroad

If you have a mortgage where you make repayments in a foreign currency, the lender must tell you if the exchange rate changes by more than 20%.

These rate fluctuations could affect your ability to pay your mortgage in future.

To protect borrowers, lenders must offer you the option to repay the mortgage in another currency.

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Always get legal advice from a lawyer who is independent of everyone else involved in the deal including:

  • the seller
  • developer, and
  • the estate agent.

Make sure your lawyer is fluent in both English and the local language, and that they understand property law in the country where you’re buying and how it relates to non-residents.

If you’re hiring a UK legal firm, check that they’re registered with the Law Society in the UK and specialise in international transactions and property conveyancing.

If you’re looking for legal advice in the country where you’re buying the property, you should be able to find lists of English-speaking professionals on the website of your local British Embassy.

Check the British Embassy website for lists of local English-speaking lawyers and qualified translators

Financial advice

You can find an independent financial adviser via the links below.

All of the websites below let you search by postcode and some let you search for specialist advisers only:

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If things go wrong when buying abroad

An overseas property purchase isn’t regulated by the Financial Conduct Authority (FCA) so you won’t be protected by the Financial Ombudsman Service or Financial Services Compensation Scheme if things go wrong.

You won’t be protected even if you use as FCA-registered financial adviser or mortgage broker in the UK to make the deal on your behalf.

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Whatever your circumstances or plans, move forward with MoneyHelper.

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