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For many people the idea of retirement means freedom to travel, or maybe even enjoy hobbies you’ve been putting off with your busy work schedule. For others, retirement comes with dreams of homeownership abroad. Have you dreamt of restoring a crumbling villa in the south of France? Or how about spending your days on the beach in the Caribbean? Rest assured; you’re not alone! The good news is, there are those who have already forged the way who can offer you advice.
Things to consider before making the move
Countries may place restrictions on foreigners owning property, which is why it’s always important to speak with a REALTOR® with experience working internationally, before settling on a dream destination. REALTORS® work hard to stay on top of industry regulations and designations, In addition, they have access to CREA Global, a global directory of resources, professional development, and exclusive networking opportunities with other REALTORS® from across the globe. You should also look into specific visa requirements and other documentation to make sure you have everything you need before purchasing a home. Otherwise, you may be stuck with payments on a property that you’re not able to live in.
For example, terms and conditions vary from country to country in the EU and property ownership rules vary greatly between regions, including taxation of pensions and land transfer taxes. In France, you can expect to pay a 10% land transfer tax as a purchaser of any property.
Thomas Watkins, a real estate professional from Sotheby’s Realty in Turks and Caicos says 90% of the buyers in the territory are from North America. He says there are no restrictions on foreigners owning property in Turks and Caicos, no capital gains on property transfers, and no estate or inheritance taxes which are all big attractions to potential retirees. However, for Turks and Caicos, there’s a one-time Stamp Duty charge payable to the Turks and Caicos Islands government when you purchase your property. If you’re considering the powdery sand beaches of the Caribbean, says Watkins, it’s important to know properties are in high demand.
“Many times, properties will be sold by the time buyers are able to make the trip!” he shares. Another reason to get a good REALTOR® before getting your heart set on your dream home!
As for financing your property abroad, several of Canada’s big banks offer overseas mortgages with a 20% down payment. Of course, cash is always king or there’s the possibility of a home equity line of credit, depending on what you currently own in Canada.
But, can you truly move full time to another country without losing your Canadian benefits? The short answer is no. You can stay six months abroad at one time before needing to come home to Canada to maintain your social insurance benefits, unless special circumstances apply. Living abroad can also affect how you file your taxes based on your residency status. It’s important to verify these things with the government before you make any permanent decisions to avoid future hiccups.
Advice from those who’ve done it already
In 2014, Will and Laila (who have asked to keep their real names private) fell in love with the Turks and Caicos during a trip to the Caribbean Island to enjoy the sunshine. It became a regular trip for the couple, who eventually got married there a few years later. Logically, the next step was to start looking for property because, as Will said, “it was the one place we knew we’d always want to go back to.”
When they started shopping in earnest, they asked around for a real estate broker and decided on one well known in the area. They purchased a condo unit within walking distance to the beach, knowing it would be an easy rental until they are ready to retire.
“It’s important, if you’re doing it this way, that you’re prepared for unforeseen circumstances,” they warn. For them it was the pandemic and occasional repairs or tenants, but they still feel it’s all worthwhile.
“Our real estate broker lives just down the street and keeps an eye on things, that really helps,” they admit. “But it’s important to get to know the people around you so you can get things fixed when you aren’t there.”
It’s a sentiment echoed by Andrew Eddy, who moved to Provence, France 10 years ago. He bought a 17th century provincial farmhouse in various stages of disrepair and neglect. Eddy spent several years restoring it, and after a change in his personal circumstances, he followed his heart to Burgundy, having fallen in love with the area during his youth. His current project is restoring a 17th century Burgundian manor house.
“The first lesson, I would tell people dreaming of retiring in Europe, is to get to know the area you are moving to,” Eddy says. “Go for an extended holiday. Spend months there if you can. Save yourself a lot of money by being informed before you make the decision to buy.”
The time you spend visiting the country is a good opportunity to decide what kind of property you’re looking for. A 300-year-old fixer-upper might be something you want to tackle at 55, but maybe not so much at 75. It’s important to know your limits and what you’re hoping to gain out of your retirement.
When it comes to retiring overseas, the idea can be extremely enticing. However, there’s more to it than just finding a home you love and packing your bags! Before making any big real estate decisions, it’s important to speak with a REALTOR® who can help you sell your current home and connect you with the right resources to make sure everything is done properly.
The article above is for information purposes and is not financial advice or a substitute for financial counsel.