What to consider when buying a second home abroad


Buying a second home beyond Britain is an attractive prospect for many investors. Whether you are among the six million people who want to retire overseas, yearn for a guaranteed getaway or have simply spotted the potential return to be had by investing abroad, the lure of the foreign property market is strong for many people.

Whatever your motivation, there are a number of considerations to make before investing. Here’s our guide to what you must think about…


You must research all you can about where you want to buy. This doesn’t mean reading up on a town, city or resort. Be as specific as possible – look into the prices in individual streets and the reputation of individual neighbourhoods, preferably tapping in to the first-hand knowledge of locals. Also, don’t forget the view. A stunning skyline of skyscrapers or beautiful beachfront vista are desirable, no matter what you intend to use the property for.


Another factor, clearly, is the property itself. Once you’ve fully researched your chosen destination you’ll get a feel for the exact location. That will help you narrow down your searches on FT Property Listings – and then it’s important to get a home that meets your needs. If you want it to be a property that is used by the rest of your family, for example, ensure there’s enough room for them. Equally, consider an easy-to-maintain, neutrally decorated property if you intend to let it straight out and get a return on your investment.

Exchange rate

The strength of the pound will work in your favour when looking overseas. In the Eurozone, for example, £1 now gets about 1.40€ – a much better return than the near 1:1 days in 2008. Equally, the currency is also strong in Australia, Japan and Argentina – meaning there are a number of opportunities to maximise the money you have available to invest.

The pound is weaker in India and Pakistan. Small changes in this can make a big difference to the overall price you pay for a property, you need to become adept at reading trends and working out when the best time is to take the plunge. If the rate is strong but you’re not quite ready to go ahead you can set up a forward contract. That way you can ‘lock in’ at the current rate and save your price for up to two years.


No matter how well versed you are in the UK’s tax system, shopping abroad is a different matter and that will mean the need for specialist help. Whether it’s the Maltese QROPS (qualifying recognised overseas pension scheme), UK/Cyprus double tax treaty or Portuguese ‘Non-Habitual Resident’ rule – each country has its own tax rules that you need to be aware of. Website expertsforexpats.com said: “The common theme is that most, if not all, tax mistakes made by British expats and non-UK residents can be avoided simply by seeking advice from a qualified tax adviser who is skilled in assisting non-UK residents with their UK tax affairs.”


If the tax is tough to understand then the language barrier can be tough to overcome too. Even if you can hold your own in conversations – maybe after years as a tourist – it’s not worth taking a chance. Buying a house involves a more thorough understanding of terms that are, at times, complex. Just as with the tax rules, invest in an expert to translate your documents and paperwork.


Remember you’re not just investing in a property, you’re investing in the country too. Countries with strong, stable political systems make for a more sound investment than those likely to face upheaval and strife. For example, if you like the idea of a property in Central America then Belize might well be attractive – with the sort of sound economy and political picture that not all countries in the region enjoy coupled with favourable tax rules and the use of the English language.

While each country is different, some things remain the same when shopping for a second home overseas. The exchange rate, tax rules, language and politics of a country have to come into consideration and are the factors that contribute to any decision to pick the right property in the right location.