Buying property abroad: taxes and fees

Purchase costs by country

Spain: transfer tax (ITP) of 6 to 10 percent on resale property depending on the region (Andalusia 7, Balearics 8 to 13 on a sliding scale), or VAT of 10 percent plus stamp duty of about 1.2 percent on new-build; notary, registry and legal fees around 2 percent. France: about 7 to 8 percent in transfer taxes and notary fees on resale, 2 to 3 percent on new-build plus VAT. Italy: 9 percent registration tax on a second home (2 percent for a primary residence) on the cadastral value, which is usually well below the price, plus notary and legal fees. Portugal: IMT of up to 7.5 percent on a sliding scale plus 0.8 percent stamp duty and fees. Monaco: about 4.5 to 6.5 percent including notary. Switzerland: 1 to 3 percent depending on the canton, with restrictions on foreign buyers (Lex Koller). UAE: 4 percent Dubai Land Department fee plus about 2 percent agent commission. UK: stamp duty land tax on a sliding scale up to 12 percent, plus a 5 percent surcharge for second homes and a further 2 percent for non-residents, so up to 19 percent at the top. USA: 1 to 3 percent depending on the state (transfer taxes, title insurance, closing costs); New York City adds a mansion tax of 1 to 3.9 percent. Greece: 3 percent transfer tax plus fees, with the Golden Visa still available at higher thresholds.

Annual costs

Property tax: Spain IBI 0.4 to 1.1 percent of cadastral value; France taxe foncière, typically 0.5 to 1.5 percent of rental value; Italy IMU about 0.8 to 1 percent of cadastral value on second homes; Portugal IMI 0.3 to 0.45 percent; USA 0.5 to 2 percent of assessed value by state; UK council tax as a flat annual charge; Monaco and the UAE none; Switzerland small; Greece ENFIA at a modest rate. Wealth tax: Spain (regional, with exemptions in Madrid and Andalusia offset by the national solidarity tax above three million), France (IFI on real estate above 1.3 million), Switzerland (cantonal). Running costs for a villa: 1 to 2 percent of value a year for staff, pool, garden, insurance and maintenance.

Non-resident specifics

Spain and Portugal tax non-residents on deemed rental income even if the house is empty. France’s IFI applies to property held by non-residents. The UK’s surcharge for non-residents and the abolition of the non-dom regime change the arithmetic for international buyers. The USA taxes non-resident owners on rental income and estates. Ask a cross-border tax advisor before signing anything.

Structure

Buying personally, through a company or through a trust changes purchase tax, annual tax, inheritance tax and privacy. Spain and France look through companies for wealth-tax purposes; Monaco and the UAE are neutral; the UK penalises corporate ownership of homes with the annual tax on enveloped dwellings. There is no universal answer, only the right answer for your residency, family and plans.

Currency and finance

A currency specialist can save one to two percent against a bank on a large transfer and can fix a rate at the offer stage. Mortgages for non-residents are available in Spain, France, Portugal, Italy, the UAE and the USA at 50 to 70 percent loan-to-value, often with a private bank relationship attached.

The team

An independent local lawyer, a tax advisor at home, a surveyor, a currency specialist and, at the top of the market, a buyer’s advisor. Their fees are a rounding error against the decisions they protect.