Living in Ireland the idea of buying a villa in Mexico or Panama seems very appealing indeed. Coming from a country which sees sunshine on average 2 ½ days a year (perhaps slight exaggeration here!) you can imagine why. As a result of many TV programs and commentaries people have generally become aware of the many legal and land related issues that need to be finalized before committing to buying that idyllic house abroad. There is however one major issue that some, as hard as it is to believe, do not always take into account:
Whilst you may be able to buy a property in that country will you be granted residency to live there?
Whilst this may seem incredibly obvious I’ve meet more than a fair share of people who have told me of their woes of, having bought a property abroad, are unable to get legal status to live there. As a result of this many are having to continually renew holiday visas which generally involves temporarily leaving a country and re-entering. This can be quite an ordeal depending on where you are located within the country. Added to this are the social and fiscal issues they may encounter as a result of not being granted residency.
This is not so much an issue within the EU due to free movements for all EU citizens and their direct families (even where the family members are from non-EU states). This is perhaps not also an issue if you are buying a property with a view to investment only. Most countries will quite happily accept investment money from abroad. The issue comes where you PRESUME that buying a property in a country will automatically entitle you to live there. If you turn up to US customs and tell them ‘Hey I own three hotels and other real estate in Manhattan and here’s the proof!’ you will still be given a holiday visa.
The laws really differ country by country. As examples consider Malaysia and the Seychelles where you do gain automatic residency when you buy a property there. In the UAE you are granted a 3-year residency permit when you buy property. Very few really get permanent residency within the UAE but the renewal of the residency permits is a simple process. Some countries will offer you residency once the property is above a certain value (for Example in St. Kitts and Nevis when value is above $400,000 and the Bahamas when the value is above $500,000). In other countries you may however struggle to ever get residency. We have already mentioned the US but Japan and Switzerland will happily allow you to buy property there but the process of gaining citizenship will involve being resident in that country for a minimum of 10 years!
Other things worth considering when buying a property abroad is whether it must be done through a financial vehicle. For example in Mexico foreigners must purchase property through a trust whilst in India it must be done by a company. Getting sound legal advice from an independent lawyer (not one associated with the selling agency and with an obvious conflict of interest) is the key here.
Happy hunting and our final word of warning: Before buying that dream house please make sure you are going to allowed to live in it!