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Buying Property in Holiday Locations


So the suitcase is packed, passports are at the ready and you’re just popping out to get some foreign spending money. But what if instead of shelling out on souvenirs, you decide to buy a property there? Many Brits have fallen in love with a holiday destination and decided to get their own bricks and mortar there.03-02-2012


So what’s the deal with buying property in our most cherished holiday destinations?
 
SPAIN - A popular choice for holiday homes for Brits. It’s seen its fair share of scandal - homes not built and dodgy title but it’s also a good place to look if you want a bargain. The popular coastal resorts have seen masses of new build over recent years and 1000s of properties remain unsold. Demand is weak and sellers have reduced prices and offered deals to people with the cash to buy. Mortgages for foreigners are available but they are restrictive. Add on approx 12% to the purchase prices for taxes and other charges. With dozens of cheap flights from the UK, if you want a bit of Britain in the sun, you’ll find it here.
 
FRANCE - The French are re-known for their appreciation of the Good Life and this, along with the varied landscape makes it attractive. Buying here can take a long time as the purchase process is complicated. Picking up a rural property in idyllic surroundings is still possible, but you’ll have to pay a lot more than 10 years ago.  Many new build holiday homes are sold on a ‘leaseback’ basis - allowing you to lease your property back to a holiday company in exchange for income and a few weeks a year there yourself. VAT is charged at 19.6% on new build property otherwise add on approx 15% to the purchase price. As our closest neighbour, France is easy to reach and remains a popular year round destination.
 
FLORIDA - Second to Spain, Florida has been the most popular destination for Brits to buy holiday homes. Despite the distance, flights are direct and relatively cheap. The climate is great and many Americans choose to retire here, which has helped demand for property. The overall decline in US housing market has left Florida property developers with too many unsold homes, so like in Spain, there are deals to be had. In some areas there are restrictions on the number of nights you can rent property out and in some places it’s banned all together. Florida will always be a world class holiday destination.
 
ITALY - Beautiful countryside, charming houses and delightful people would sum up Italy. The property market hasn’t risen as much over the years and offers good value especially in rural areas. Whilst cheap farmhouses are as rare as hens teeth in France, you can still find them in Italy. There are some new builds in coastal areas but most UK buyers go for a renovation project. ‘Trullis’ are old peasant houses unique to southern Italy and popular with foreign buyers. Allow up to 19% for purchase costs. 


TURKEY - Further afield, Turkey has become a popular holiday destination and now boasts a booming housing market. Property here is much cheaper than the rest of Europe and there’s a good choice of new build and older property. Turkey has a good infrastructure and amenities, a booming economy and very welcoming locals. There are restrictions on where foreigners can buy but purchase costs are lower at around 6%.
 
PORTUGAL - The 3rd country in Europe to need an IMF bailout, Portugal’s property prices have fallen. There’s been less new build than in Spain and so doesn’t have the glut of new property as it’s neighbour. There is oversupply of property in city centre’s though and rents are low. The Algarve remains popular - this is where prices are highest, but you can pick up old rural property quite cheaply. Buying property in Portugal is relatively straightforward. Allow approx 10% on top of the purchase price.
 
Exchange Rate Woes - Buying a property can be stressful enough without the risk of fluctuating exchange rates. If you know you are going to need a lump sum of money for a property purchase in a different country, talk to a specialist currency broker such as PureFX. They can talk to you about how the exchange rate might move and if you want to ‘lock in’ on a rate, you can buy your currency in advance.


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