5 Things To Consider When Buying a Home Overseas
Nowadays, being a nomad is pretty common, but you get to the point where you finally want to settle. And settling does not mean necessarily in your home country; because, maybe you fell in love with that particular casa you visited while on a solo trip… and you’re interested in a new home base.
Whatever the reason is, you need to be aware that buying a property overseas might be a complete different experience than doing it in your local town. Here are 5 things we find are crucial when investing in a property overseas.
1. What’s the cost of living in your new country?
You could start by finding out what’s the average cost of groceries for, let’s say, a family of four – or one! What’s the education system like, and the cost of private schooling? How does the healthcare system function?
While looking for properties, it’s important to understand the cost of living in the area. The El Salvador real estate market, for example, has many gated communities, both in the city and the coast. But if you like a small town, charming feel, you can look for options close to some of the towns near the beach. That way, you can plan ahead and budget accordingly.
2. Get to know the area and options for accommodations.
The best advice we ever received: “you’ll get to know the city best if you do it with a local person”. Think of your local real estate agent as your trusted companion on the ground, who can take you around for the best finds and show you the lay of the land.
So, if gated communities are common in El Salvador, your agent can give you options about the best gated communities. Do a tour of the area with someone who knows it best.
Image via: Google
3. Get familiar with the ownership laws.
This is an important one! Yes, as a foreigner in El Salvador you can own properties. The only prerequisite is that your country of origin gives the same rights to Salvadorans. There is only one exception, foreigners are not allowed to buy a property in El Salvador if the property is intended for industrial usage.
4. Understand fees and taxes.
Make sure you get to know the property buying process. The more informed you are about all the possible fees, the better it is for your budget. And there are some fees that might be more obvious than others.
In El Salvador, there is a 3% property transfer fee that you pay if the amount is greater than US $28,571.43.
Once you have purchased your property, you must register yourself as the new owner. This is the registration fee and it goes as follows: for each fraction of one hundred dollars you pay $0.63.
Let’s say, if the total amount of the property is $100,000 you divide that amount in 100 and that answer you multiply it by $0.63. This fee is payed at the CNR (National Registry Center).
There are for sure, legal fees involved, and that depends on the attorney that is handling your case.
If you are purchasing your property through a financing plan, you need to consider the commission the bank charges for the property loan.
There are some annual taxes that may vary according to the type of property you are acquiring. The tax for owning a property and the government’s fee. You pay both of these to the Municipality. However, there are NO property taxes in El Salvador.
5. Research the financing options.
Not all local banks provide financing options for foreigners. Usually you can find a specialist who understands how to navigate the system. In some cases you can find financing options in your home country.