Guides and Tips

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Where to Look

For those residential purchasers whose objectives are purely financial Sweden’s largest cities,  Stockholm and Goteborg will be the first places to look.

The third largest city, Malmo, is a special case in that its employment problems have been significantly offset by the Oresund Bridge link to Copenhagen (where 10% of the city’s population go to work).

Research has shown a significant correlation between local immigration and property prices. Sweden’s population is expected to increase only slowly in the medium term but some areas of southern Sweden and the greater Stockholm area could see much larger increases.

buyer-guide-final_switzerland.jpgWe resume our Buyer Guide series with a look at

Switzerland, which we last covered in late July when news of the repeal of Lex Koller was announced.

Where to Look

Although only a small country and, moreover, one that has a highly defined identity in public consciousness,

Switzerland does offer a number different themes for the investor/visitor. For skiers the choice of property may be decided by the appeal of particular resorts or concerns about the effects of global warming on lower altitude ski slopes. This is likely to increase the popularity of the most mountainous cantons, such as Graubunden (Grisons) or Valais. For other investors the choice may be a matter linguistic skills deciding whether they opt for a French-, German- or Italian-speaking district.

buyer-guide-final_abu-dhabi.jpgApproached from the sea Abu Dhabi’s densely packed high rise buildings give the impression that can grow no further but the reality is that planned expansion will increase the city’s area and population (currently about 1.8m) over the next few years.

Where to Look

The modern city of Abu Dhabi only dates back to the sixties and it is still a city trying to establish and nurture its character and create differentiation between neighbourhoods. The town plan on Abu Dhabi island conforms to a grid pattern with very high density building (20 storeys is normal) along the shoreline (The Corniche). New developments on other islands, some of them man-made, and the mainland are making great efforts to distinguish themselves with cultural features (Saadiyat Island’s Guggenheim Museum) or resort style attractions as with Reem Island or Al Raha beach. However, in several cases these developments are only at the planning stage, all-be-it far advanced.

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Overseas Property Mall Buyers Guide SeriesIf buying a new home for yourself, you probably need an offer on your old home before the estate agents take you seriously as a prospective purchaser. The logical sequence is to concentrate on the selling before tackling the buying. If you find your dream before your sale is more or less ‘in the bag’, you’re likely to be sorely disappointed.

However, if you’re looking to invest in property overseas, it’s highly likely that the property itself will loom too large in your thinking at too early a stage, whether the vision is triggered by something you see in the property pages of the press or the word-of-mouth stimuli of friends and acquaintances. In reality, you need to do the boring homework first of all in order to keep your feet on the ground when your reach the stage of considering individual properties.

Henry Davis of International Property (www.internationalproperty.ie) stresses the need to do your homework before you go into the market. Interestingly, the cornerstone of his approach is investigating that rental incomes are sufficient to make an investment worthwhile. For example, he recommends talking to lettings agents as a way of finding out which properties are easy to let.

Overseas Property Mall Buyers Guide Series to RomaniaWhere to Look

Bucharest is, by some way, the most favoured target for overseas investment but Romania has great tourist potential so resorts and mountain locations may be worth investigating. Brasov in the inside of the elbow of the Carpathian Mountain range is another popular location owing to its wealth of historic buildings dating from the time of its long occupation by Romania’s German-speaking minority. Poiana Brasov is considered the country’s best ski resort. Prices in the main provincial cities such as Cluj will be in the region of 8-900 Euros a square metre but in central Bucharest this can rise as high as 3,000 Euros a square metre.

Snags, Points to Remember, Legal and Otherwise

There are a number of problems relating to investing in property in Romania but the picture is not completely bleak. For instance there is a longstanding prohibition against foreign ownership of land (but not buildings) but it is possible for wholly foreign-owned companies to have title to land. Also this particular constraint will not be popular with fellow-members of the European Union who are likely to insist that Romania creates a level playing field for investors.

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Overseas Property Mall Buyers Guide SeriesLatest figures show that four million US citizens own property abroad, a much higher proportion than, say, among British citizens. The differences between the US approach to real estate purchases and the systems to be found abroad are legion.

The 4 million statistic seems surprising in view of the fact that Americans abroad must file tax returns (and often pay tax) with the US Internal Revenue Service every year, whereas UK citizens are able to avoid this onerous chore unless the HM Revenue & Customs happens to turn its beady eye upon them.

Failure to send in tax returns in a timely manner could lead to an American paying income tax twice over (once in their country of domicile and again in the States) rather than just paying a penalty to the revenue. Americans abroad normally don’t pay income tax to the IRS on the first $82,500 of income but since last year they have started to pay higher tax rates on the excess AND incur high rates for housing benefits paid by their employers (read more on investorsoffshore.com). For more information about the tax situation for American expats visit www.usa-international-offshore-expatriate-tax.com .

The International Consortium of Real Estate Agents provides valuable details on the framework for residential and commercial property dealings in the USA and 24 other countries.

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Where to Look

Overseas Property Mall Buyers Guide Series to GreeceWith so much that is iconic in the realms of culture and tourism, it’s difficult to find a clear-eyed assessment of the relative merits of different parts of the country. However, given the distance from Northern and Western Europe and the country’s own topography, it’s worth remembering practicalities such as the proximity of international airports.

Mainland destinations such as the Halkidiki peninsulas in the north (close to Thessaloniki) and the Peloponnese or the island of Crete have the edge in terms of accessibility. It’s also worth keeping a look out for news of new budget airline routes such as GB Airways’ plans to serve Cofu, Mykonos and Rhodes this summer. The level of exclusivity that you are looking for will also narrow the field.

Snags, Points to Remember, Legal and Otherwise

There are some extra controls on non-EU nationals acquiring property in places such as Rhodes (which is adjacent to Turkey) and the country’s northern frontier with other Balkan states. Greece has no land registry so property transactions will normally be accompanied by a topographical survey of the boundaries with neighbouring properties.

Property purchases are almost exclusively in Euros and purchasers normally expect to pay a 10% deposit when the initial sale agreement is signed; THIS IS NOT NORMALLY REFUNDABLE.

There have been some cases of planning permission being revoked with allegations of corruption being made, as in Porto Carras in Halkidiki.

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Overseas Property Mall - Buyers Guide to MexicoOver the next few days we’re taking an orderly look at buying property in a number of countries, of which Mexico is the first. We hope that this logical approach will tick the right boxes for readers and give some ideas for comparing different countries and setting about gathering similar information for countries we haven’t covered. We’d love to hear from others with hands on experience of the process.

Where to Look

The Yucatan Peninsula and Baja California are especially popular with Americans (though there are problems with buying in coastal regions – see below). San Miguel de Allende in the state of Guanajuato (north west of Mexico City) is also popular.

Snags, Points to Remember, Legal and Otherwise

Foreigners are prohibited from owning property within 100km of the frontier and 50km of the coast but the law does allow them to hold property on lease from a Mexican bank trust in an arrangement known as a fideicomiso. This will require an initial charge and an annual commission payable to the bank of, say, $600 and $800 respectively and both of these will be subject to VAT at 15%.

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Nancy Mitford once wrote that Louis XIV, in rebuilding Versailles, avoided the mistake of destroying the attractions that had first drawn him to the place. But how can investors in property in the Caribbean save themselves from experiencing the allure the region has for them crumbling, whether they see themselves in following in the footsteps of Captain Morgan, Cliff Richard or the late Princess Margaret.

This part of the world has definitely opened up for property investments by the mass affluent as well as the super-rich. Property investors have to accept that the robustness of the property market depends upon the epithets such as ‘undiscovered’ or ‘exclusive’ becoming qualified although, hopefully not to such an extent that they become completely inapplicable.

Timesonline recently reported villa properties for sale on Barbados, Grand Cayman and Grenada for £350K or less and property in the Dominican Republic priced at £275K. As any viewer of TV documentaries should be aware, the Caribbean covers an area half the size of the United States and Caribbean Islands come in many shapes and sizes. While the Dominican Republic is slightly smaller than Scotland, the Grand Cayman is a high-lying reef (max. elevation 24 metres). There are big variations in development, wealth and tourist facilities.

Berlin has its fair share of palaces (San Souci and Charlottenburg) and Museums (the Pergamon Museum) and historical associations (the rebuilt Reichstag and Spandau, for instance, where Albert Speer was incarcerated) and it’s now enjoying another renaissance as a lively cultural centre instead of the cold war bastion of freedom. However, to point out that Berlin property is cheaper than that in Paris or Rome might prompt the thought that it doesn’t compare so well in other ways.

With its waterways and open spaces, though, it does offer an environment that competes very well with over-priced London and, indeed, some Londoners are beginning to seriously consider Berlin as the first rung of their property ladder. British food favourites can be sourced from a number of places around the city and gym and swimming facilities compare favourably with London’s. As the Insite consultancy says, you can buy an apartment in Berlin for the price of a garage in London or Dublin.