People usually choose a housing abroad according to its price. However, the cheapness of some apartments and houses in Europe is not always the key to a successful purchase. Upkeep, utility costs and other additional payments may exceed the benefits of the low price. Let us examine those main points of buying the real estate in Europe, which foreign investors will necessarily face.
Getting a permission
Getting a permission to buy real estate is considered to be the main problem for foreigners in some countries. Usually such problems are related to the acquisition of housing under construction. Also, there can be difficulties with clean title. It takes a lot of time to figure out if there are encumbrances or possible successors who may challenge the transaction.
Also, sometimes there are difficulties when signing the contract and register the transaction. One may face the problem even when opening an account in a foreign bank, as far as some financial institutions require a client visit, and sometimes even a recommendation letter from client's previous bank.
It is important to remember that in some countries one may obtain the full ownership only after all the flats in the residential development are sold out. It may take a lot of time.
Make a double take or stay away?
Experts believe that the most difficult is buying real estate in Switzerland. Its laws on property are very strict. One of them prohibits foreigners buying Swiss real estate. A foreigner may buy a house or an apartment only in special tourist regions of the country. Obtaining of a residence permit or a job in Switzerland is required.
Purchasing property in Italy is also not easy. In addition, the property owner does not receive multivisa granting the free access to the country. If you want to stay for a long time, you should register a company and invest in the country's economy.
Buying an apartment in the Czech Republic is permitted only to legal entities operating in the country. In Slovenia and Croatia, foreigners are not be able to register property as individuals. In Turkey, it is prohibited to the Russians to buy housing on the Black Sea coast, but they are allowed to buy in the Mediterranean and the Aegean Seas.
It is pretty easy for foreigners to buy a house in Latvia. State policy is aimed to attraction of funds by issuing Schengen visas to real estate buyers.
It should be simple enough to buy a house on the Black Sea coast of Bulgaria, as well as in Turkey, Greece, Spain and Portugal. The point is: the richer a country, the harder to buy a real estate for foreigner.
The tax burden
Be prepared that many countries do not miss the opportunity to get high taxes when you buy real estate there.
Property tax in France is very high. There is also a tax on the purchase of an asset that is up to 7% of the cost. There is also a local tax in the event if owner or his family members linger to stay in the Fifth Republic for more than 183 days. In addition to France, Bulgaria (24.9%), Spain (12%), Germany (11.5%) and Cyprus (11.1%) can be identified as leaders by the value of various fees and taxes.
| Country |
Related expenses as a percentage of the value of real estate
|
| Bulgaria |
24.9 |
| France |
16.3 |
| Spain |
12.2 |
| Germany |
11.5 |
| Cyprus |
11.1 |
| Turkey |
9.9 |
| Czech Republic |
9.2 |
| USA* |
9.1 |
| Montenegro |
8.3 |
| Latvia |
5.2 |
When buying a foreign housing probably there will be a need to pay yearly fees. In particular, it is very expensive in Switzerland, where payments are up to €1,000-1,500 for apartment and up to €10,000 for house.
Often the cost of maintaining the property depends on the region. Thus, for example , occurs in Germany. Munich or Hamburg have high demands on housing maintenance, while East Germany is more democratic, and in Leipzig and Dresden prices are very low.
Utilities
Charges for public utility services is also an important part in the cost of foreign real estate.
Utilities are very expensive in the United Kingdom. Water supply is about €500 a year , electricity and gas are about €1,680. Two-bedroom apartment in the UK may require €350 a month in total.
The cost of utilities in Germany for an apartment of 85 sq.m is around €170 a month. For the same apartments in Cyprus one will pay €146, in Latvia €142, in France €124, in Finland €100-150.
The utilities in Spain cost a bit less, about €100 a month, in Bulgaria €75, in Croatia €50.
| Country |
Average cost of utilities (water supply, heating, energy, garbage) for an apartment of 85 sq.m
|
| Bulgaria |
€75 |
| Turkey |
€80 |
| Spain |
€100 |
| Montenegro |
€120 |
| USA* |
€123 |
| France |
€124 |
| Czech Republic |
€133 |
| Latvia |
€142 |
| Cyprus |
€146 |
| Germany |
€170 |
Expenses for the luxury real estate
What if you are not satisfied with property of average price and you want to buy a luxury house? Be prepared to pay a stamp duty, which reaches up to 7% (see details in the article by ee24.com). Also you'll have to spend a decent amount of money for upkeep.
| City |
Annual expenses on maintenance of luxury real estate
|
| London |
€2,400 |
| Paris |
€8,200 |
| Geneva |
€9,400 |
| Moscow* |
€12,500 |
| NY* |
€40,000 |
* Data on the USA, NY and Moscow is for comparison to European countries and cities
Text: based on data of RBC and Gordon Rock