Buying a holiday home in a vacation country is a dream for many. Especially in retirement the desire to spend one’s later years in a wonderful place is quite strong. Due to the freedom of establishment in the EU, this need not remain a dream. Buying a holiday home in another European country is hardly more complicated than buying a house in Austria.
You should, however, not be too quick when choosing the property, and you should also thoroughly inform yourself about the foreign legal system, different regulations and laws. If you plan to buy a house in a country with a different language, have all documents translated so that no communication problems can arise.
What you should look out for when buying a holiday property abroad
One thing up front:Never make a rushed spontaneous purchase or sign a contract or buy a house based on a photo alone. Even if it takes time, always view the property on site!
Here are the most important tips for buying property abroad summarized:
- What kind of climate do you want?
- Should it be an apartment or a house?
- How is the infrastructure?
- What is the medical care like?
- Is the property suitable for when you are older?
- How much do travel and flights cost?
- Do you want to live there permanently or only occasionally?
- How often a year do you plan to travel there?
- Will anything be built near the desired property in the near future (road, apartment block, etc.)?
- Does the price for the property match the regional price level?
- Have the previous owner’s taxes all been paid?
- Are there usage restrictions or building regulations?
- What is the structural condition?
- Are extensions and alterations allowed?
- Is the seller the owner?
- Check the land register entry to see who is entered as the owner
- Obtain information about the incidental costs of a purchase (costs for expert reports, notary, transfer taxes, land register entries, etc.)
- How much do the translations cost, and how long will they take?
- Find out exactly about the operating costs of the property (waste fees, regional taxes, municipal charges, etc.)
- Will an additional tax be necessary in the coming years (e.g. tax on value increases)?
- How much does maintenance for the pool and garden cost?
- Are there companies that take care of the garden or pool and if so, how much does that cost per year?
- Find a trusted person on site who can keep an eye on your property
- If planning renovations, familiarize yourself with the building regulations in advance
- Obtain offers and cost estimates from construction companies and tradespeople.
- Obtain quotes for insurance (building and household insurance)
- Investigate insurance costs if you will be absent for extended periods
- Inform yourself about the legal regulations in the holiday country (Note: in some countries a verbal agreement is already considered a purchase!)
- If a down payment is due when buying the house, be sure to conclude a preliminary contract
- Before the full purchase price is paid, insist on an entry or at least a reservation in the land register
- Inform yourself about financing in your home country or in the vacation country
Thoroughly inform yourself about the holiday country
Anyone who wants to buy a holiday residence should first carefully research the region. What is the climate and do I want such a climate permanently? How is the infrastructure and the medical care? Will anything be built here in the future (e.g. a heavily trafficked road)? Is the place suitable as a retirement residence? Is the flight and travel not too long? How often do I plan to spend holidays there? Also find out what you need for a permanent residence permit and whether that is possible. With such a permit many matters are simplified, such as financing.
Inform yourself about the desired property
As a general rule, find out what the price level in the region looks like and compare several offers. In some countries it is customary to charge a surcharge for foreigners.
If you have decided on a house, you should also find out everything about the desired property. Has the previous owner paid all taxes? Are there usage restrictions or building regulations? How good is the structural condition and are there damp spots in the house? Are you allowed to carry out extensions and alterations? If you are not sure about this, it is best to consult an expert who can thoroughly inspect the house.
Also check whether the seller is really the owner by taking a look in the land register. Sometimes investigations by a lawyer are necessary to find the true owner.
Plan translations in advance when buying a house
We want to warn against bidding on a property without having translations (certified or normal) of the following documents available. Since translations take some time, but time pressure often arises during the purchase itself, copy the available documents as quickly as possible and forward them to the translation agency.
The following documents are translated according to theÜbersetzungsbüro ALPHATRAD AUSTRIA– sometimes officially certified, sometimes not – depending on need and whether these documents exist:
- old purchase contracts
- building permit
- building description
- building plans
- energy performance certificate
- land register extract
- proof of rental income
- rental contracts
- proof of fire and building insurance
- proof of modernizations and value-increasing repairs
- occupancy permit
- valuation report
If you have questions about the costs of a possible translation, contact the translation agencyALPHATRAD AUSTRIA
Calculate the costs in advance
Get an idea of the total costs in advance: obtain information on how much the incidental costs for expert reports, notary fees, transfer taxes, land register entries (these can amount to up to 20% of the purchase price in some countries!) and translations will be. Even if a notary is not strictly required in some countries, it is recommended to involve one. If you do not master the language properly, you should take an interpreter with you for the entire purchase process to avoid communication problems.
Also find out exactly how much the operating costs will be: waste fees, regional taxes, municipal charges. Check whether there could be additional taxes in the coming years. In some countries an annual tax on value increases is due after the property acquisition.
It should also be noted how much you will need to spend on garden and pool maintenance, especially if you are often absent for longer periods. Find out immediately whether there are companies that can take care of your property in the meantime and how much that costs. It is great if you have a trusted person on site who can keep an eye on your holiday home.
If you plan to renovate the house, this requires a high level of organization and time. You must inform yourself precisely about the building regulations and obtain cost estimates from construction companies and tradespeople. Local knowledge and mastery of the foreign language are very advantageous here.
You should also include the costs for various insurances in your calculations. Your holiday home should be as well insured as your existing property. Obtain offers for building and household insurance. In this context, clarify with the insurer whether the coverage remains in effect during longer absences, or whether the premium then increases. As with all insurances, find out exactly what the insurance covers and what is excluded. If you are unsure of the language, request a translation or consult an interpreter. If you buy a holiday apartment in an apartment complex, find out which risks are already covered by the owners’ insurance.
The house purchase
Inform yourself about the legal regulations in the holiday region regarding a house purchase. In some countries a verbal agreement is even considered a binding contract. In some countries it is customary that a down payment is due when buying a house. In this case a preliminary contract should be concluded and the seller should provide corresponding securities. Before you pay the purchase price, insist on the entry or at least a reservation in the land register. This can prevent the property from being encumbered elsewhere.
If you decide to finance your property, you can take out a loan from an Austrian bank or a financial institution abroad. Some institutions specialize in property investment abroad; inquire at the banks. Buying across borders is unfortunately always more complex and usually more expensive. If you take out a mortgage, an already paid-off property or the holiday property itself can serve as collateral. With the latter option you can strictly separate your property in Austria from the foreign property. Of course, you must then include the costs for the mortgage entry in the foreign land register, as well as incidental costs such as fees for notaries and courts abroad. These are usually higher in the holiday country than in Austria.
Did we forget an important detail about buying a house abroad? Or do you have experience with buying property abroad? Then we look forward to comments.
