The acquisition of real estate abroad by compatriots has a well-established 15-year practice. But previously, buyers focused on two main indicators – the country's features and the price per square meter. Now they simultaneously consider how much property maintenance will cost. The trend is clear: not only oligarchs and their relatives but also citizens with more modest incomes have been drawn to foreign purchases.
Companies selling real estate abroad say there is a stable group of buyers who, even with relatively modest savings of $15-20 thousand, are determined to buy housing only outside their homeland. Such people are not considered adventurers but are taken quite seriously. With a certain amount for a down payment, you can buy foreign real estate under a mortgage program with relatively decent lending terms. Of course, property is mainly purchased in coastal countries. And it is seen as a very profitable investment: it appreciates in value, can be rented out, and can be used for vacation a couple of times a year. Moreover, what is especially pleasant is coming not to visit someone but to your own home.
But first, you need to calculate how much your monthly expenses for maintenance and tax deductions will amount to. It would be wrong to think that Europe is always expensive but reliable in terms of service quality, while all other countries are cheap and unpredictable. Although this conclusion is not entirely far from the truth. Many resort countries, for example, are only now truly beginning to develop residential complex management services. Companies specializing in housing management can help rent it out while the owners are away (they charge about 15% of the rental cost for this service) and handle utility maintenance.
Spain
Spain is a popular country among domestic buyers. According to experts, the costs associated with maintaining property there are low and consist of the following expense items: property depreciation and management company services (this is simpler because only high-quality materials are used, for example, the same legrand cable ducts for wiring); utility bills; insurance; property tax.
The cost of maintaining property in Spain is 60-80 euro cents per square meter per month. Let's take a house with an area of 110 sq. m, located on a plot of 500 sq. m with a pool, total cost €400,000. Including electricity, water, year-round pool maintenance, insurance, and property tax, maintenance costs will be €2,500-2,800 per year. As for maintenance services, experts advise focusing on €60-80 per month. This includes property depreciation and management company services.
In Spain, the cost of utilities (subscription fee, electricity, water, etc.) is accounted separately. If no one lives in the house, only subscription fees are paid – €20-40 per month. For permanent residents, utilities will cost about €100-120 per month, based on meter readings.
Spanish property tax is levied once a year, amounting to 0.2% of the registered value of the property. For example, for a house worth €300,000, this tax is €600 per year.
The approximate cost of insurance is €350-400 per year.
Cyprus
Property maintenance costs in Cyprus are close to those in Spain. The property tax depends on the value of the property and is paid annually according to the following rate scale:
* Property value up to €170,000 (equivalent to 100,000 Cypriot pounds) – 0% annual tax;
* Property value from €170,000 to €425,000 (equivalent to 100,000-250,000 Cypriot pounds) – 2% annual tax;
* Property value from €425,000 to €850,000 (equivalent to 250,000-500,000 Cypriot pounds) – 3% annual tax;
* Property value over €850,000 (equivalent to 500,000 Cypriot pounds) – 3.5% annual tax.
Bulgaria
In Bulgaria, the monthly cost of utilities is about €5-10 per sq. m per year, plus water and electricity based on meter readings. In winter, this is about €70-90 per month, in summer – €30-40. Experts recommend focusing on average figures of €50-60 per month, respectively – €600-720 per year.
Property owners must declare their property to the tax service within two months of purchase. The declaration requires a detailed description of the acquisition: year of construction, building materials, structural features, area, number of floors, cost.
The tax base is determined by the territorial tax service. The tax rate is 0.15%. For example, for property with a tax assessment of 40,000 Bulgarian leva, the tax is: 40,000:100x0.15=60 leva. For convenience, we give this calculation in euros: €20,000:100x0.15=€30.
The tax can be halved if you live with your family most of the year in your Bulgarian "residence." Then your home is considered your main residence, and the tax on the main residence is reduced by 50%. The tax is paid four times a year in equal installments.
Private housing is also subject to a waste collection fee. The rate is set based on the value determined for property tax. Each year, by the end of January, the tax service sends each property owner a notice of the property tax amount and the waste collection fee.
Montenegro
Here, payments range from €10-12 per sq. m per year, plus water and electricity metered. On average, during the height of the season, maintaining a small apartment per month will be €50-60 + €10 (water) + €30 (electricity). Experts clarify that the cost of property maintenance largely depends on the infrastructure: the more infrastructure elements located in the residential complex, the higher the price will be.
The annual tax on commercial and residential property will be 0.08-0.8% of the property value, or €1-2.5 per sq. m per year.