Wednesday, April 15, 2009
Posted by: Connie Yee
As real estate values continue to decrease, individuals in the United States are looking into purchasing properties overseas. The reasons why individuals buy homes abroad is:
1. Tax havens: There are some counties such as Ecuador that do not require the homebuyers to pay property tax.
2. Lower cost of ownership: Maintaining a home in the United States may be expensive due to the price of labor. In many other countries, this maintenance cost is lower due to the surplus of skilled construction workers who earns less.
3. More for the money: The value of the United States dollar compared to other countries’ currency can allow the homebuyer to purchase a bigger home.
4. Access: By purchasing a house in Dubai, homeowners automatically receive a visa to do business in the country. This can help open opportunities for the purchaser.
Even with all these possible advantages in investing abroad, potential buyers should also be careful of the risks. Some common risks that buyer’s encounter when investing in their overseas home is:
1. Currency risk: Is conversion necessary when purchasing the home?
2. Estate laws: Does the government split up the property if the homeowner dies?
3. Historical restriction?
4. Security concerns?
5, Can the government repossess my property?