Buying foreign property as a non-resident: hidden costs and parameters checklist
The Dream vs. The Paperwork
Everyone starts the same way: scrolling through listings in some sunny coastal town, seeing prices that look like Monopoly money compared to back home, and thinking, “Why not?” Then you start reading the fine print, and suddenly you’re knee-deep in residency laws, notary stamps, and bank transfers that seem to evaporate fees along the way.
It’s not that you shouldn’t do it. Plenty of expats buy successfully. But the difference between those who end up sipping wine on their terrace and those who end up in a bureaucratic horror show? Preparation.
Parameter #1: Can You Even Own There?
Step one sounds obvious, but it’s the biggest deal-breaker: are foreigners even allowed to buy?
Some countries are totally open—think Spain, Portugal, Mexico. Others slap restrictions depending on where the property is (like coastal land in Mexico, where you need a bank trust). Some only let foreigners lease long-term instead of buying outright, like Thailand.
So your checklist starts here: check the rules for your passport, not just “foreigners in general.” Some nationalities get exceptions thanks to treaties; others don’t.
Parameter #2: Residency Isn’t Always Included
A sneaky misconception: buying a property doesn’t automatically give you the right to live there long-term. In some places, yes (Portugal’s Golden Visa used to be a big deal, though it’s been scaled back). But in many countries, you’re still just a tourist who happens to own an apartment.
Imagine dropping $200,000 on a condo in Colombia, only to realize you still need to renew visas like everyone else. Awkward.
So the question is: does property ownership come with any residency perks? And if it does, what’s the minimum spend to qualify? That “cheap country house” might not get you across the line.
Parameter #3: Taxes—Before, During, After
This one stings. Let’s break it down:
- Upfront taxes. Some countries hit you with a property transfer tax or stamp duty. Rates can range from “barely noticeable” to “why did I even bother moving here?”
- Annual taxes. Once you own it, you’ll probably owe property tax every year. In some countries, it’s peanuts. In others (hello, Canada), it can be a serious chunk.
- Rental income. Planning to Airbnb it? Cool, but rental income is often taxed at higher rates for non-residents. Some countries demand you appoint a local tax representative just to pay them.
- Exit tax. When you sell, there’s usually capital gains tax. Even worse, some countries don’t index for inflation, so it looks like you “made” more money than you really did.
Checklist note: get clarity on all four of these tax angles before you sign anything.
Parameter #4: Financing (Spoiler: It’s Hard)
Don’t expect to stroll into a foreign bank and get a cushy mortgage as a non-resident. A few places will lend to foreigners, but usually with brutal interest rates, low loan-to-value ratios, or strings attached.
What most people end up doing is:
- Paying in cash (ouch).
- Using equity from back home (refinancing their house, then buying abroad with the cash).
- Getting partial financing if their residency status improves later.
So, unless you’re rolling in liquid cash, financing is going to be a hurdle.
Parameter #5: Hidden Costs Nobody Tells You About
Here’s where the horror stories pile up. Besides the purchase price, brace yourself for:
- Notary and legal fees. In some countries, notaries aren’t just rubber stamps—they’re full-on legal gatekeepers, and they charge like it.
- Agent commissions. Some are fixed, some are “whatever they can talk you into.” Always clarify who pays: buyer, seller, or both.
- Registration fees. Yes, you pay to get your name on the deed.
- Maintenance fees. Buying a condo? Expect monthly association fees, sometimes surprisingly high.
- Currency conversion. Moving big sums across borders isn’t cheap. Banks will skim with terrible exchange rates unless you plan ahead.
- Insurance. Depending where you buy, earthquake, flood, or hurricane coverage might be mandatory.
By the end, your “cheap €100,000 flat” might feel more like €120,000 once all the extras land.
Parameter #6: Title and Ownership Rights
This is one of those boring-but-critical checks. You need to make sure the seller actually has the right to sell. In some countries, land titles are messy or incomplete. A lawyer should verify the title is clean—no disputes, no family members claiming partial ownership, no unpaid debts tied to the property.
Checklist tip: don’t skip the lawyer. It’s not where you want to cut costs.
Parameter #7: Rental Rules
If your plan is to rent out the place when you’re not around, you better know the rules. Some cities have cracked down hard on short-term rentals (Barcelona, Amsterdam, New York—you name it). In some markets, you need a license; in others, it’s outright banned.
Even for long-term rentals, non-residents often pay higher taxes or need a local tax rep. Do the math carefully—sometimes the “passive income dream” is less lucrative after the government’s slice.
Parameter #8: Exit Strategy
It’s easy to get swept up in the “I’ll never sell, this is my forever home” vibe. But things change. Maybe you get tired of the country, maybe the neighborhood shifts, maybe you just want liquidity.
Selling as a foreigner can be harder. Buyers may be wary of foreign-owned titles, or you might face extra steps in the sale process. Plus, depending on your home country, you might owe tax there and in the property’s country.
So think through: how easy is it to sell, and what will the taxes look like when you do?
Parameter #9: Inheritance and Heirs
Not fun to think about, but necessary. If you die, what happens to the property? Some countries force property into local inheritance laws (forced heirship), regardless of your will. That means your kids might end up with only part of what you intended, or the local government steps in.
Worth sorting this out with a lawyer, especially if you’ve got heirs back home who’d need to manage the asset from afar.
Hidden Lifestyle Costs
One last layer that doesn’t show up in contracts: the lifestyle costs around ownership.
- Travel back and forth. Owning a house in Italy sounds great, but if you’re flying there twice a year, that adds up.
- Maintenance. Leaky roof? Garden upkeep? Someone has to handle it, and if you’re not local, you’re hiring help.
- Community fees. In some countries, expats are seen as “cash cows,” and fees for expat-owned properties creep higher.
Checklist thought: budget for ongoing “hassle money.” Owning abroad is rarely set-and-forget.
Wrapping It Up
Buying foreign property as a non-resident is doable—and in many cases, it’s a smart move. But it’s not the breezy process people imagine. Between the rules, the taxes, and the surprise costs, you need a solid checklist before even thinking about putting down a deposit.
Quick recap of your must-check parameters:
- Ownership rights for foreigners.
- Whether residency is included.
- Taxes: upfront, annual, rental, exit.
- Financing reality check.
- Hidden fees (lawyers, notaries, etc.).
- Title and legal verification.
- Rental restrictions.
- Your eventual exit strategy.
- Inheritance laws.
- Lifestyle upkeep costs.
Do that homework, and you’ll join the terrace-sipping crew instead of the “what have I done” club.