So, you are an expat happily living and working overseas. Therefore, you might wonder why you might be interested in owning property in the United Kingdom? You may be surprised to know that there are a number of very real reasons for doing so.
Even in uncertain times, people still typically regard property as being a relatively safe investment. Hopefully property you own may appreciate in value over time and if you are letting it out, it may be a relatively tax-efficient way of growing your capital. Of course, the age-old wisdom of thinking carefully before purchasing property if you are to reduce your risks of depreciation, continue to hold true. Make sure also that you understand all the tax and legal implications associated with being a landlord.
Your credit history
More people than ever before are aware of the need to keep one eye on the continuity and quality of their credit history files. If you do eventually return to the United Kingdom, you may have some need of urgent financing and that might not always be easy to obtain in a situation where you have been out of the country for a lengthy period of time. Being able to show that you are a property owner in the UK might not overcome all credit scoring issues but it might be a powerful assistance in helping you to reintegrate into UK financial life.
When speaking to many privately-motivated expats, one of the most common concerns they have is how to generate income in their chosen country and new lifestyle. If you own property in the UK and let it out for rental purposes, you may be able to not only cover your capital investment and any mortgage but also to provide yourself with some surplus that might help to sustain your life in your new location. Of course, owning property in the UK that you are using for rental income brings with it certain obligations, commitments and from time to time, perhaps stress. One potential way around that is to consider using a property management company to look after your interests but remember to take their fees into account when doing your overall sums.
In some specific circumstances, it might be tax-advantageous in your country of residence, to say that you have official domicile and property in the United Kingdom. However, you should be extremely careful that you understand the legal implications behind this, as in many countries this is no longer deemed to be acceptable and your taxation may be based upon the country in which you spend the majority of the year. In some situations though, particularly if you are one of those expats that spend substantial time in the year in the UK, it may be to your advantage to have your official residence in the UK and to be taxed based upon UK norms. Do not make guesses in this area though, as they could lead you into serious legal troubles in your new country. Take qualified advice from local accountants and perhaps solicitors if need be.
As an expat, whether on a corporate assignment or a privately-motivated lifestyle decision basis, you probably know that sometimes things might go wrong and you may need to get back to the UK. Having property you own avoids the necessity of you needing to enter into long-term rentals upon your return to the UK and following that up by extensive house-hunting. Even if your property is occupied by tenants, providing you meet the legal criteria for the provision of notice to quit, you may be able to get back into your own home relatively quickly.
Linked to the idea of the above-mentioned bolt hole, some expats prefer not to irretrievably break their financial and emotional links to the United Kingdom. If you are one such individual, you just may find that you have a little more peace of mind and reassurance in knowing that you have not irrevocably burned your bridges ‘back home’. Owning property may help you achieve that. So there are plenty of reasons why you might as an expat want to have a second property in the UK. Do your research properly and use a financial specialist to help purchase the home and you can happily gain some or all of the benefits mentioned above.