So you find yourself interested in buying a home abroad. Well there are some things you should keep in mind in order to get the most bang for your buck and protect yourself. If you are interested in buying a home abroad in Italy then you can expect the average home price to be about $500,000. Keep in mind however, that transaction costs such as various taxes and fees can equate up to a whopping 19% of the purchase price. So if we go with the originally cost of $500,000 you could be spending an additional $90,000 in order to deal the deal. Keep that in mind when trying to budget what you can or can’t afford! Similar to Ireland, there are no restrictions on foreign property ownership in Italy so that’s something good and positive.
According to a real estate agent in Italy, it is typical for an individual to put down 5% of the purchase price when making an offer, and then an additional 20% when you actually sign the contract. That means to simply place an offer on a $500,000 home you’ll need to be able to put down $25,000 and that is a serious down payment. Not to mention an additional $100,000 when you actually sign the contract. That’s a lot of money up front. A tip to keep in mind that in order to purchase property abroad you’ll need to more than likely open up a bank account locally there. You can do this by first obtaining a fiscal code. This is easy to obtain as long as you have a valid passport. If you are like me, and would love to live in Italy, but seeing those numbers frighten you a bit, then perhaps consider looking at Spain.
An average home there costs approximately $295,000 which is far more reasonable. They also have more feasible transaction costs with the high end being 11%. To me, that looks a lot better than the whopping 19% I might be facing in Italy. If you are wondering what this average will buy you, you are looking at 3-4 bedroom villas with a pool, terrace and beautifully landscaped gardens so you are definitely getting a good bargain! So although it might seem like a dream to purchase a home abroad, it really is much more realistic than some people think.
Property laws, regulations and different trends vary by country and even area within a country so be sure to research well the area in which you are considering purchasing something. Don’t think of buying a fixer home, putting a lot of time and money into the home, and expect to turn around and sell it making a good return on investment overseas. A lot of the housing market overseas doesn’t experience high growth. So if you want to move, make sure you want to move. Leverage world real estate is a great resource for finding options overseas. Along with the US, they have properties in South America, Central America, Europe, Asia and Africa. So give them a shout if you are looking for some great ideas.