5 rules for buying real estate abroad

Choosing a country for investment: taxes and inheritance
Inheritance Law: Aspects for Citizens of Australia

Choosing a country for investment

When choosing a country to invest in real estate abroad, it is important to consider not only the profitability and location of the property, but also to study the laws of inheritance. To avoid possible tax problems, it is worth consulting a professional lawyer or realtor. You should also find out if you can obtain a residence permit or citizenship in this country and determine the size of all tax payments that will have to be paid.

Legislative nuances

Property ownership abroad is linked to international law and taxation. If you do not reside permanently in that country, you will have to deal with the legislation and inheritance laws of two countries. For example, in France, only French inheritance law applies to real estate, which complicates matters for foreign owners. In other countries, such as Spain, it is possible to choose the applicable law. However, in Italy and many other countries, the law of the testator's nationality applies to inheritance matters.

Inheritance law in other countries for Australian citizens

When an Australian citizen leaves property in another country after their death, Australian inheritance law applies. However, this is just one of the aspects to consider. A will plays a crucial role, but the procedures depend on the legal system of each state, and international conventions, such as the Hague Convention of 1961, can also be significant. Therefore, it is important to draft a will in advance.

Sale flat in Punta Prima 277 200,00 $

Spain,Punta Prima

2 Bedrooms

2 Bathrooms

77 м²

Sale flat in Florence 3 150 000,00 $

Italy,Florence

3 Bedrooms

2 Bathrooms

300 м²

Sale villa in Marbella 13 440 000,00 $

Spain,Marbella

6 Bedrooms

9 Bathrooms

1400 м²

Sale flat in Madrid 1 085 879,00 $

Spain,Madrid

2 Bedrooms

2 Bathrooms

113 м²

Sale flat in Alicante 146 895,00 $

Spain,Alicante

1 Bedroom

1 Bathroom

52 м²

Sale flat in Lentate-sul-Sevezo 695 876,00 $

Spain,Lentate-sul-Sevezo

5 Bedrooms

2 Bathrooms

184 м²

Another option is to transfer overseas property as a gift, but this requires special attention to many subtle nuances.

Succession planning

Including real estate or parts of it in a holding company, trust, or family fund can be an effective way to plan for inheritance. However, such steps also require legal support to avoid complications with the laws of other countries, which is practically impossible to navigate on your own.

Inheritance and taxes

And finally, it is important to remember that receiving an inheritance is always associated with tax payments, which can reach very high rates in different countries. For example, in the United States, the estate tax rate can be as high as 55%, while in Europe it ranges from 20% to 30% of the market value of the property. However, there are exceptions, such as the absence of taxes in the Bahamas, St. Kitts and Nevis, and Canada.

Conclusions

Rule 1:Choose the country carefully. Purchasing real estate abroad requires special care in choosing a country and studying local legislation, especially inheritance and tax issues.

Rule 2:Consider the nuances of legislation. Property ownership abroad involves issues of international law and taxation related to inheritance and gifting.

Rule 3:It's important to draft a will correctly. When a will is in place, its contents take precedence and resolve many contentious issues.

Rule 4:Calculate taxes in advance. Inheriting assets involves paying the corresponding taxes, and tax rates can vary significantly between different countries.