11 Reasons to Buy Outside the EU
MEPM Managing Director Edward Hill shares his expert knowledge and gives us 11 good reasons to purchase a holiday property outside the EU
1.TAXATION - Less of it!
Generally there is no transfer of cross-border information from outside the EU about your property. All you earn on your property from rent, re-sale profit or any kind of wealth tax valuation will remain strictly within the national borders of the country of purchase. You should always declare your worldwide income and wealth to the tax officers in your country of residence. However in EU countries, every item including a 2 day rental to a friend will be automatically declared. There are also some area “nasties” particularly in Southern France, where an assumed rental tax is placed on your property. This means you will have to pay 25% of an area adjusted high season rental payment regardless of whether the property is rented out or not. This can be expensive if it happens to be near rental hot spots such as Cannes, St Tropez.
2. VISAS - You know 'Now' where you stand!
For the British purchaser, you will not have to wait on tenterhooks for that elusive ‘Brexit” deal to know how long you are welcome to stay in your property. The rules are clear from the outset and you can judge accordingly. This is NOT the case if you were to buy in the EU where some countries, such as Spain, might put a restriction (rumoured 30-60 days per annum) on the use of your property by restricting visa access to the country. You would be better off to buy a Time Share in some EU countries!!
3. CURRENCY - More for your money!
The value of the Euro, fuelled by German industrial opulence and little else, makes most of the more southerly EU countries very expensive for sterling buyers and with an increase in the costs in Euro for a decadent lifestyle only boosting the cost. Yet, winter sun countries such as South Africa and Egypt have devalued their currencies by as much as 50% against sterling in the same period. With the exception of always expensive Switzerland, even against the “strong” dollar, Sterling still goes a lot further out of the EU than within it. Whilst there is Brexit in the air, this situation is unlikely to change.
4. RENTAL FREEDOM - No bizarre EU rules making it difficult to rent!
Let’s be clear! Governments and the hotel lobby in the EU have declared all-out war on private rentals, thanks to the threat of AIR BnB. Every quarter new rules about rentals appear in EU countries, in particular in Spain and France. The weapons installed by the governments are the use of hundreds of “health, safety and national security” requirements on the landlord; apart from Barcelona where an outright ban on short term rental is in place full-stop. Examples of the crazy rules now in force are:
- All landlords have to personally hand in passport copies to the local police station of every tenant. Impossible for most as this would mean thousand long queues every day for someone to endure.
- All sheets have to be offered in “duplicate” with a certified spare set to be kept in the “safe “
- All rooms must have air conditioning units. So much for “Green Environmental Europe. “
5. CLIMATE - Guaranteed Winter Sun
Most of the popular guaranteed sunshine countries outside the EU are a good deal further south. The only exception is the Canary Islands. It is always amazing how many people think that Mediterranean winters are warm and balmy. They are not. It rains. Sometimes it rains a lot. The houses always feel damp and poorly insulated than northern Europe. Chopin even commented on this fact when he spent a year in Valldemossa, Majorca. “It was the coldest most miserable of all winters, I have ever spent.” Coming from someone who spent most of his life in Vienna. that was quite an indictment!
As a golden rule, if you wish to have guaranteed sunshine and warm balmy winters you need to go at least 1000 miles further south than Malaga. So Egypt, Cape Verde, Brazil, Caribbean, South Africa (UK winter only) Dubai, Oman are some safe bets.
6. BEAUTIFUL SEAS - Sea Life & Ocean Quality
The Mediterranean is one of the most over-fished and polluted oceans on earth. If you are looking for excitement in the sea then the Red Sea, Moroccan Atlantic, and Caribbean Sea have far more to offer.
7. HOME STAFFING - Cheaper and easier to hire help when you are there!
Hire your own cleaners, helpers, butlers, shoppers; even carers. Countries outside the EU do not have Social Chapter rules that makes it prohibitively expensive or even legally dangerous to employ outside help on a continual basis. The EU makes it very difficult to employ without having to go through huge amounts of expensive paperwork, extra taxation and long term pension or redundancy liabilities. It might seem an extravagance for some of the younger purchasers to worry about such an item, however, when you are considering a retirement property or you are of a certain age, you might well need home help or a carer. Then this becomes a real issue.
8. DECENT LONG HAUL PLANES - means comfortable flights!
Admittedly a bonus for the slightly better healed, less of this low cost, pay for the toilet flying. Because they are further away, most countries outside Europe still have quality long haul carriers serving them. A flat bed in business class, complimentary baggage allowance of 60kg and decent lounges in quality airports make the experience much more pleasurable. Turkish Airlines, Qatar Airlines, Emirates, Etihad, BA (Ex Heathrow) and even Egypt Air provide a more spacious less penny pinching flight experience.
9. FACES AS WELL AS PLACES - More select fellow foreigners with you!
As the bulk of misery Britains heads for the Costa del Sol, lampooned in thousands of TV series from Benidorm to El Dorado; destinations outside the Euro comfort zone attract a naturally more sophisticated clientele. Less of the cliché more of the interesting variety You will always find less people but many more soul mates in Exotica.
10. LANGUAGE - They want to speak English with you!
Emerging countries who are not part of Europe see it as important to speak English to get on in life. Some popular countries have had some kind of colonial connection with the UK, so sometimes English is indigenous. This benefits everyone as so often English is the common language among a wide range of nationalities.
National pride and frankly less the need, means that many EU countries no longer see the need to speak English. Spain and France in particular are very sensitive towards the culture preservation of their languages. Also you will always be competing with German in some places as the second choice of language, in particular in Mallorca.
11. THINKING OUT OF THE BOX - More interesting Dinner Party and uptake back home about non-EU destinations!
A villa in Alicante is so common place that no one is the slightest bit interested about listening to your tales of high jinks or golf score on the Costa Blanca when you get home. They are also much less likely to pay you a visit, when 200 of their friends have issued them with the same invitation. I always note that when I chat about sun-downer cocktails after a snorkelling safari with Sea Elephants in a marine park on the Red Sea, people tend to look up from their lasagne and actually listen. Some even ask about “closest” airports before grabbing their coats on the way out!
Contact Edward Hill and let him help you find that ideal holiday home!