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Owning a property abroad can be taxing
by Susie Hughes at 08:14 23/08/06 (News on Business)
One of the advantages of freelance work is the flexibility it affords. That, together with mobile technology, can tempt freelancers to join the growing number of British people who own property abroad.
However business and financial advisers Grant Thornton are urging buyers to be fully aware of the different tax regimes abroad, before deciding where to buy.

AdvertisementLatest Government figures show there are 257,000 households with second homes abroad, The most popular place for Britons to buy is Spain, ahead of France, Portugal and Italy. The US is also a popular destination, with many also tempted by off-the-beaten track locations such as Bulgaria. However, where you decide to buy could have a serious impact on your finances.
Justin Rix, tax specialist at Grant Thornton, said: "While good weather, availability of low cost flights and the cost of property are the biggest factors when making the choice of where to buy, the local tax implications should also be carefully considered, as these can have a significant impact on the costs associated with the holiday home.

"If you do buy a property abroad, income received from the rental of the property may give rise to local taxes. In many countries any gain arising on the sale of the property or merely its ownership can lead to a tax liability. Furthermore, if the owner of the overseas property is a UK tax resident rental income or gain on the sale of the property may also result in a UK tax liability, with the individual having to obtain relief under the complex 'double tax relief' provisions. This is on top of all the property taxes associated with purchasing property."


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