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The buy to let sector is not looking too promising in the UK right now. This has created a renewed interest in the overseas property market, with some landlords considering investing in property abroad.
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Buying property abroad means landlords can avoid the punitive 3% stamp duty surcharge introduced by the chancellor in April of this year. They can also buy better value homes, which will net them a higher return.
France the No. 1 Destination for Landlords
Research carried out by PropertyLetByUs has found that 23% of landlords are seriously considering investing in the overseas property market as a means of paying less tax. France has been named as the number one destination for landlords, closely followed by Spain and Italy.
Check the Rules
However, investing in the overseas property market is not without problems. Different countries have differing rules and regulations, so landlords need to be fully aware of what they are getting into before they buy.
“Each country has different tax laws relating to property and they can change quickly, with little warning,” says Jane Morris from www.PropertyLetByUs.com.
“For example, in 2012 the French government imposed a 15.5% social charge on capital gains from the sale of second homes or rental income – a measure which was estimated to bring in €250m [£193.4m] a year. Tax on rental income rose overnight, from 20% to 35.5%, while capital gains tax on property sales rose from 19% to 34.5%.”
Due to overseas property taxes, buying a rental property abroad can sometimes end up being more expensive, so always take professional advice before you buy.
