Buying Overseas Property in 2026: A Practical Due Diligence Guide

Buying property abroad is one of the largest financial decisions an internationally mobile individual will make. It combines the legal complexity of a foreign jurisdiction, the financial exposure of a major capital commitment, the currency risk of a significant overseas asset, and the emotional investment of a home or holiday property — all at once.

Approached properly, an overseas property purchase is a well-structured investment. Approached poorly, it can involve title disputes, undisclosed liabilities, planning permission problems, and tax surprises that take years to resolve.

This guide provides a practical framework for due diligence and an overview of the purchase process across the key markets where internationally mobile buyers are most active.

The Core Due Diligence Checklist

Before any overseas property purchase, a structured due diligence process should cover the following:

Title and ownership verification

The fundamental question: does the person selling the property actually own it? Are there encumbrances, mortgages, charges, or third-party rights registered against it?

In most European countries, property rights are registered in a land registry. In Spain, the Land Registry extract (Nota Simple) provides this information. In Greece, the Ktimatologio (land registry) provides title records for registered properties; older unregistered properties require more extensive investigation. In Cyprus, title deeds are registered with the Department of Lands and Surveys.

Always use your own lawyer — not the seller's lawyer. The seller's lawyer acts in the seller's interest. Your lawyer acts in yours. A property lawyer in the relevant jurisdiction, with specific experience in overseas purchases by non-nationals, is essential.

Planning permission and legal construction

Is the property legally constructed? Does it have the required building permits? Has any renovation or extension been carried out with proper permissions? In some European markets — Greece and Spain in particular — "illegal" construction (built without full permissions) is common and creates significant problems for buyers: inability to obtain mortgage finance, potential enforcement action, and difficulty reselling.

Check:

• Original building permit (licence)
• Certificate of occupancy or habitation certificate
• Any subsequent building permits for extensions or alterations
• That the property as built matches the permitted plans

Habitation/occupation certificate

Spain requires a cédula de habitabilidad (certificate of habitability) for properties to be legally inhabited. Some older properties lack this certificate. Obtaining it retrospectively is possible but can involve remedying code violations. In Greece, an energy performance certificate (EPC) and regularisation of any unauthorised construction is required before a transfer deed can be signed at the notary.

Outstanding debts and charges

In some countries, debts secured against a property can transfer to the buyer on purchase. In Spain, community fees (comunidad), property taxes (IBI), and some utility charges are specifically protected in this way. A Spanish notary will request certificates confirming these are paid up — but buyers should request these independently at the due diligence stage.

Community ownership and charges

For apartments and developments with shared facilities, the community of owners (comunidad de propietarios in Spain; similar structures in Cyprus and Greece) levies regular fees and can impose special levies for major repairs. Review the most recent three years of community accounts; ask about any planned major works; check the reserve fund position.

Purchase Process: Key Markets

Spain

1. Nota Simple from the Land Registry — confirms ownership, encumbrances, and property description
2. NIE number — foreigners require a Número de Identificación de Extranjero (tax identification number) before any legal or financial transaction
3. Reservation Agreement and deposit (typically €3,000-€10,000) — takes the property off the market
4. Private Purchase Contract (Contrato de Arras Penitenciales) — typically 10% deposit; if buyer withdraws, deposit is lost; if seller withdraws, they must return double the deposit
5. Notary deed (Escritura Pública) — signed by buyer and seller before a notary; title formally transfers
6. Land Registry registration — the escritura is lodged for registration
7. Tax payments — Transfer Tax (ITP) for resale properties: 6-10% depending on the region; VAT (10%) for new builds

Greece

1. AFM number (Greek tax registration) — required before any purchase
2. Legal checks — title search at the local land registry or Ktimatologio; verify there are no planning violations
3. Pre-contract agreement (optional) — protects both parties
4. Notary deed — the purchase is executed before a notary; both buyer and seller must attend or provide power of attorney
5. Land Registry registration
6. Transfer tax — 3% of the taxable value (objective value, not necessarily market price)

Cyprus

1. Contract of Sale — signed and stamped; the most important early step
2. Deposit with the Land Registry — within 60 days of signing, the contract should be deposited at the Land Registry. This is critical: it protects the buyer against the seller re-mortgaging or selling the property to another party before the title transfers
3. Title deed transfer — at the Land Registry; stamp duty and transfer fees apply
4. Transfer fees — 3-8% of market value depending on property value (a 50% reduction applies where the transaction did not attract VAT); no transfer fees are payable on new properties on which VAT has been charged

Thailand

Foreign nationals cannot own land in Thailand outright. The main options for overseas property buyers are:

• Condominium ownership: foreigners can own condominium units outright, subject to the foreign ownership quota (maximum 49% of a building's total floor area can be foreign-owned). This is the most straightforward path for most foreign buyers.
• Long-term leasehold: land can be leased for 30 years, with options for renewal. Leasehold provides occupation rights but not ownership. Legal advice is essential to understand the enforceability of renewal options under Thai law.
• Thai company ownership: some buyers use a Thai company (with Thai majority shareholders) to hold land. This approach is under scrutiny from Thai authorities and carries significant legal and reputational risk. Not generally recommended.

Bali (Indonesia)

Similar restrictions apply. Foreigners cannot own land (Hak Milik title) in Indonesia. Options include:

• Hak Pakai (Right to Use): available to foreign nationals; 30 years, renewable for a further 20 and then 30 years
• Leasehold (Hak Sewa): common for villas; typically 25-30 year initial term
• PT PMA (foreign-owned limited company): allows the company to hold Hak Guna Bangunan (Right to Build) title; more rights than individual ownership but with company establishment costs

Financing an Overseas Purchase

UK mortgage lenders do not generally lend against overseas property. The financing options are:

• Release equity from a UK property (remortgage or second charge): borrowing in GBP against UK property to fund an overseas purchase. Maintains the purchase in GBP; the overseas property is unencumbered.
• Local bank mortgage: several banks in Spain, Cyprus, and Greece will lend to non-resident buyers. Typical LTV: 60-70% for non-residents. The loan will be in the local currency (EUR), creating a EUR liability against what may be a EUR asset — providing a natural hedge if you earn in EUR or plan to spend in EUR.
• Specialist overseas mortgage brokers: SPF Private Clients and Skipton International have experience arranging financing for overseas property purchases. They can identify local lenders willing to accept non-resident applications.

UK Tax Implications

Stamp Duty Land Tax (SDLT) or Land and Buildings Transaction Tax (LBTT): does not apply to overseas property purchases. These taxes apply only to property situated in England/Wales/Scotland/Northern Ireland.

Capital Gains Tax on sale: UK residents (and UK-domiciled individuals) are liable to UK CGT on gains from the sale of overseas property. The rate is 18% or 24% (24% for higher/additional rate taxpayers from April 2024 onwards). Principal Private Residence relief applies if the property was the main home. The overseas purchase price must be converted to GBP at the time of purchase and the sale price at the time of sale; currency movements affect the GBP gain calculation.

Non-UK residents and CGT: non-UK residents are generally not subject to UK CGT on overseas property. The property is taxed in the country where it is situated.

Rental income: if the overseas property is let, the rental income is subject to UK income tax for UK residents (after deducting allowable expenses). Non-UK residents may not be subject to UK tax on overseas rental income — but may be subject to local tax in the country of the property.

Inheritance and Succession

Overseas property passes under the law of the country in which it is situated, unless an EU Succession Regulation election has been made.

For property in EU member states (Spain, Greece, Cyprus, Portugal, France, Italy), the EU Succession Regulation (Brussels IV) allows a person to elect that their estate in EU countries is administered under the law of their nationality. For a British citizen, this means making an election in their will for English law to govern all EU-situated assets — avoiding forced heirship rules that apply in France, Italy, and Spain to distribute property to specific family members.

The election must be made explicitly in the will. Ensure your solicitor or notary is aware of the election requirement when drafting a will that covers overseas property.

Separate wills: in many overseas property purchases, the buyer's lawyer recommends executing a local will in the country of purchase. This simplifies the probate process in that country without waiting for UK probate. A local will for the overseas property, and a UK will for UK assets, avoids duplication and conflict — but the two wills must be carefully drafted not to accidentally revoke each other.

How Global Investments Can Help

Overseas property purchases are one of the most significant financial decisions our clients make. Global Investments works alongside specialist local lawyers and currency brokers to provide a joined-up advisory experience — covering the financial planning around the purchase (equity release, currency strategy, tax planning), the ongoing tax obligations (rental income, CGT on disposal), and the succession planning implications for the estate.

Speak with our property investment team to understand how an overseas purchase fits into your broader financial plan.

Property values can fall as well as rise. Tax rules in the UK and overseas are subject to change. This article provides general information only and does not constitute legal or financial advice. Always engage a qualified local lawyer before entering into a property purchase contract in any jurisdiction.