Natalie So, for the best countries to buy property overseas, you have a vast playground. From sandy beaches, alfresco dining, and mild winters, owning a home abroad also brings investment benefits. Your second home provides an excellent holiday base, immersion into a new culture and worldly cuisines, and chances to become bi-lingual. But aside from fantastic suntans and swimming pools, how do you decide which country is best?
There are varied foreign countries with vibrant property markets to choose from, but several lead the way in sales to foreigners. The reasons vary from easy buying procedures to foreign ownership rights and affordable prices. Some people who buy a holiday home abroad also look to retire in later years, and they investigate what an ex-pat lifestyle entails. Here are our picks of the top countries for overseas buyers and reasons for their popularity.
6 of the Best Countries to Buy Property Overseas
1: Sunny Spain for British Buyers
For decades, British buyers have flocked to Spain. Lured in by more than tasty paella and poolside Sangria, working professionals often choose major cities like Madrid and Barcelona. At the same time, retirees and holiday homeowners prefer the Balearic Islands, Mijas, and Murcia.
For holiday homes or places to retire, the Costas always comes first. The Costa Blanca, Brava, Del Sol, and Costa Calida include many towns and villages. A few buyers opt for inland, traditional Spanish destinations, but most choose coastline resorts.
Alicante on the Costa Brava is a time-honoured favourite for families. Marbella on the Costa Del Sol promotes an upmarket lifestyle, drawing in millionaires worldwide. Up-and-coming places with mass investment by local councils and businesses include Le Manga Del Mar and Canyamel Pins. In addition, foreign buyers choose Spain because of its impressive transport networks, vast diversity of regions, and the Spanish sun.
2: France – A Beautiful Country with Charm
Sitting across the English Channel, France has always been a weekend getaway destination for Brits. Yet, the popularity has increased over the last ten years because more nationalities want to move and live there in retirement.
The second is that France tops the list for prime ski resorts. The latter see much interest from property investors tapping into ski resorts’ move to turn themselves into a summer holiday destination. Mass investment in ski infrastructure and transport is underway as ski resorts compete to capture the first position in the tourism and housing markets.
Paris is a leading city destination that excels in culture, cuisine, art, fashion, and shopping. It always captures the interest of intellectuals who want inspiration and nostalgic vibes. As a leading metropolis, buyers don’t think twice about the payoff between high property prices and Parisian life.
3: Prestigious Portugal for International Living
Portugal wins favour for two chief reasons. The first is following in a celebrity’s footsteps, which brings prestige. Some famous stars, including Madonna and Cliff Richards, have purchased luxury properties on the Silver Coast. You can understand why from their impressive portfolio of apartments and villas, which range from traditional Portuguese homes to clean-cut modern villas featuring award-winning architecture.
Anyone who knows their geography will testify that Lisbon is where it all happens. Popular areas include Baixa, Belem, and beautiful Comporta, with sandy beaches, scenic landscapes, and relaxed lifestyles. Reasons people buy include the golfing industry, stable economy, and high-quality lifestyles, besides tax incentives and, for real estate investors, a thriving rental market. Look at places like Quinta do Lago Real Estate for luxury property, otherwise for holiday homes and retirement destinations, the Algarve comes out on top.
4: Turkey for Pristine Beaches
It might surprise anyone who is not knowledgeable about this part of the world to see Turkey selling international real estate, yet the country sells 50,000 apartments and villas to foreigners every year.
Popular destinations are Istanbul, Antalya, Fethiye and Bodrum. Istanbul attracts investors buying new homes who want to capitalise on expansion on the European side. The second, Antalya, a central Mediterranean location with smaller resorts, easily attracts buyers with Turkey’s best beaches.
The Fethiye region, comprised of Calis Beach, Oludeniz, Hisaronu, Ovacik, and countryside Uzumlu, attracts British expats with its stunning landscapes. Bodrum, a coastal city on the Aegean coast, is more upmarket and has a roaring trade with the sailing world.
Hospitality is ingrained into Turkish culture, and for holidaymakers or retirees, settling down and fitting in is easily done. The buying process is quick; if your finances are in place, get the keys in as little as one week.
Such is the potential in Turkey’s housing market that anyone looking at a mid-to-long-term investment would do well to consider it. Turkey also has a digital nomad visa scheme for remote workers and a golden visa scheme for new countries of residence. Cash buyers will get discounted prices.
5: Cyprus for Natural Beauty
Low property taxes and the non-domicile tax regime for expatriates make Cyprus a financially appealing choice for capital growth. Furthermore, the location between Europe, the Middle East, and Africa attracts international businesses and investors. The main differences between North and South Cyprus for home buyers are legal recognition and economic development.
South Cyprus, officially the Republic of Cyprus, is an EU member with a well-regulated housing market and international legal recognition. The north, the Turkish Republic of Northern Cyprus (TRNC), offers more affordable properties but doesn’t belong to the EU. However, there are cheaper living costs with high rental yields and lower entry prices.
6: Dubai – A Financial Center for the Future
Dubai wins favour with its strong economy, fantastic architecture, and zero-income tax laws. The city offers high rental yields, a stable real estate market, and many properties, from luxury beachfront villas to high-rise apartments with stunning skyline views. With no property tax and the ability for foreigners to own freehold properties in designated areas, Dubai has much potential. As a global business hub with excellent connectivity and high-quality lifestyles, expatriates, entrepreneurs, and retirees instantly settle in.
Over 88% of residents are foreigners, so various nationalities quickly adapt and thrive. Demand for rental properties remains strong because of the large expat workforce, and Dubai’s government continues to introduce investor-friendly policies, such as long-term visas and residency programs. Whether for personal use, rental income, or long-term appreciation, Dubai’s real estate market offers unmatched opportunities for global investors. Another fun fact is that the UAE, to which Dubai belongs, has the world’s fastest high-speed internet, a bonus for international workers.
How to Choose the Right Country to Invest in
The above countries are just the seven hottest markets, but the global market is vast, with many countries to choose from. Ultimately, the best decision of where to spend your money will depend on your budget and goal, i.e., investment, holiday home, or retirement house. However, other factors will influence your decision.
Research Nationality Trends
Humans are creatures of habit and are seen in buying trends across the globe. For example, Panama City is popular with American property owners but not with Brits. Head over to Turkey, and Russians and Germans like the Mediterranean coast, while Brits prefer the Aegean. Japan is rising in popularity with Americans, especially for rural, cheap properties, but Europeans aren’t heading there. Engaging with other property portals and forums to connect with owners provides valuable insights.
Diversified Economic Growth and Stability
Economic stability affects property values and growth potential. Countries like Spain and Greece won favour for political stability and EU membership. Poland is a key player in European technology economies, attracting foreign interest. Meanwhile, the stable British pound provides security for international investors. World-class cities and top-ranking universities have the potential for student rental demand.
Understanding Regional Property Laws
Real estate practices vary worldwide, and misunderstanding them will result in costly errors and attract scammers. In Australia, non-residents typically need foreign investment approval to purchase residential homes unless they buy new dwellings or vacant lots intended for development within four years. In China, foreigners can buy commercial real estate if they plan to occupy it themselves. Investors in Portugal and Spain who purchase homes and reside there for at least five years qualify for long-term residency. Laws and procedures vary from country to country, so research as much as possible.
Golden Visa Schemes
If your reason for buying is long-term, look into golden visa schemes, otherwise known as citizenship by real estate investment, that allow foreign investors to acquire citizenship or long-term residency by purchasing a house above a certain value threshold. Countries like Portugal, Spain, and Greece offer residency permits leading to citizenship.
Caribbean nations like St. Kitts and Nevis, Dominica, and Antigua and Barbuda provide direct citizenship in exchange for real estate investments. Turkey grants citizenship to investors who purchase a villa or apartment worth at least $400,000. These programs attract high-net-worth individuals with visa-free travel and tax benefits. However, some countries, like Portugal, have recently tightened regulations because of housing affordability.
Foreign Currency Fluctuations and Risks
Currency markets change rapidly and impact investment values, as well as average property prices. One example is when the pound dropped 10% against the USD in a single day following Brexit. Foreign investors capitalised on deprecating currency exchange rates, with 78% of UK commercial property sales after Brexit being made by such investors seeking bargains. Every time a new US president gets elected, it also impacts currencies. COVID-19 impacted currencies, and this had a knock-on effect on house prices.
Likewise, some foreigners who converted their pounds into Turkish lira and deposited the money into high-interest savings accounts offered by Turkish banks would lose a lot of money now if they were to convert back to their home country’s currency. The reason is the Turkish lira has lost much value since COVID and the Russian–Ukraine war. Unfortunately, there is no solution to currency risks, but something to be aware of if you plan to consolidate your portfolio in the future.
Tax Implications and Financial Advice
Tax implications for overseas property assets are complicated depending on where you buy and where you already reside. Consult a knowledgeable international tax consultant to assess your financial situation. Overseas investors may be able to offset foreign income tax if they pay tax overseas on their income or capital gains, influenced by their citizenship and the status as a primary or rental residence.
Belgium’s property transfer tax rates are the highest globally at 11.3%, significantly above the global average of 3.3%. Spain and Pakistan follow. Also, check if a double taxation treaty exists between your home country and your chosen destination for property investment, as this impacts your tax obligations.
Using a Lawyer
Some countries don’t require buyers to use lawyers in real estate transactions. But our experience is that lawyers give buyers peace of mind and confidence when navigating legal complexities and ensuring compliance. They will obtain and understand necessary documents, including property deeds, proof of ownership, land surveys, and any local permits required for foreign buyers. They will get written confirmation of agreed negotiations and insist on paper receipts for payments made during the property transaction process. Most countries have legal frameworks for notarized contracts.
Rental yields and short-term rentals
For a buy-to-let investment, check recent laws because countries like Spain and Turkey have tightened their regulations on domestic markets because of over-tourism and low hotel occupancy rates. In Turkey, landlords must get a licence and permission from neighbours and cannot rent for more than 100 days a year. So, check the laws regarding short-term rentals in that chosen country before viewing homes and average yields across countries. One strong contender is Dubai, where annual rental yields for apartments range from 2.2% to 8.76%, and villas sometimes reach 10%.
Valuable Tips When Researching Property Abroad
Purchasing Processes: Research local laws for foreign property ownership, as rules, differ widely from country to country regarding title security and living rights. For example, in the Philippines, foreigners cannot own land but can own a residence. In addition, the Philippine Condominium Act allows foreigners to own condo units as long as Filipinos own 60% of the building. Meanwhile, head over to Turkey, and foreigners have the same ownership rights as Turkish citizens for 100% freehold. Remember that a commercial property purchase is another ball game to residential properties.
Title Deeds: Ensure the seller or property developer possesses the title deeds and can legally transfer them to foreign nationals, especially for new or partially built properties. Also, verify that the deeds have not been used as collateral for any loans. Sometimes, an attractive destination is too good to be true.
Overseas Mortgages: From our experience, mortgages for foreigners offered by some countries rarely work out. Most require a high deposit of up to 40% and incur high interest rates, ultimately making that investment a dud from the start. Some banks, like HSBC, offer international financial services and expert advice for overseas mortgage payments. The bottom line is to shop around if sourcing finance funds.
Cultural Differences: Most countries appear to be superb destinations when visiting, and many buyers are attracted by lower costs of living. However, once owners live there, cultural differences between neighbours and community relations stand out. Learn about the culture and traditions or ask other foreigners who live in that country what cultural advice they have.
Distance Management: Foreigners who won’t be in the country permanently should have a key holder who checks the house after bad weather and lets you know if there are any problems. Some people employ a keyholding company to do this, and they will handle bookings should you decide to rent the house out.
Researching Local and Regional Markets
Do analyse long-term real estate trends, as property prices vary significantly even among nearby markets because of localised factors. Remember, where there is high demand, but a low supply, this increases prices can and will affect investment decisions. The same goes in reverse.
Areas with new developments and constant infrastructure upgrades always fare well for excellent capital appreciation. One example is European Istanbul, which is investing billions into its metro lines and has built a new airport and two tunnels under the Bosphorus to visit Asian Istanbul. Watch economic and political landscapes for capital appreciation since these affect central bank policies and interest rates. Also, remember that many countries’ currencies are tied to the USD.
Extra Costs, Taxes and Inheritance Law
Evaluate your real estate budget by considering the costs of purchasing property abroad. These include stamp duty, translators, notary fees, and transfer tax. Also, seek legal advice in your residence country about the capital gains taxes when you sell overseas assets and the rules in that country.
For example, in Turkey, foreigners and citizens are exempt from paying capital gains tax if they have owned the apartment or villa for at least five years, but their home country may tax them on profits. Also, check inheritance laws for that country and if a private will can override state law.
About Us – Spot Blue Estate Agency
We are a London-based real estate agent. We hope we have given you lots of helpful advice on the best countries to buy property overseas, but you can also contact us for impartial investment advice and to answer questions you may have. Our thousands of properties for sale include off-plan, new build and resale, apartments, villas, and chalets. Whether you want to buy a house for a rental income or a dream house, we can help you with your property search and offer professional advice to find the perfect villa or apartment that matches your budget and lifestyle.
