Getting a mortgage can be a time-consuming and sometimes stressful process at the best of times, but throw in cross-border taxation and language barriers and the complications can multiply.
According to Julian Sampson, head of lending for law firm TWM Solicitors, there are "huge disparities in lending and home buying across Europe - and globally".
He commends the "helpfully sophisticated" system in the UK, with land registration and a court process, but says "taking property abroad", however, is a whole new ball game.
There are several complications that mortgage brokers and their clients will face when seeking to get an overseas mortgage.
However, with the right advice and support, often from fellow professionals such as lawyers and accountants, these can be overcome in the best interests of the end customer.
Language barrier
Language may seem like a trivial matter, but it is important to find a lender which has a strong Anglophone service when helping your expat clients find a home abroad.
Daniel Howarth, head of Enness International, makes this point because it is crucial the client and the adviser both have someone who can talk through quite complicated financial matters in the language best spoken by all parties.
It's one thing to be able to carry on a conversation in French; quite another to grasp the nuances of financial jargon in a foreign language.
Mr Howarth believes many agencies are now working harder to provide such services for the 4.2m UK expats seeking a mortgage outside of the British Isles.
He claims: “Overseas banks have been rapidly expanding or creating specialist non-residents Anglophone departments to keep up with demand from non-domiciles.”
This is especially important given the next point: taxation.
Tax structures
Navigating the various tax structures even in the UK can be complicated, but add to this the multiplicity of cross-border tax jurisdictions, and throw in having to understand not only the financials, but also the language, and it's clear that having advisers with specialist knowledge is a must for would-be experts.
Mr Howarth adds: “Domestic counterparts often do not have the highly technical knowledge to accommodate changing and often complicated international tax arrangements.
“Despite most member states being in the European Economic Area, and dual tax treaties being in place for most member states, tax law still varies massively across member states.
“Inheritance tax (IHT) and which properties it applies to if a client has a global-spanning portfolio continues to be a point of contention.”
He explains that in some countries, such as France, a non-resident can buy a property under the IHT law of the country in which they are resident.
For example, in the UK, IHT law states assets should be passed onto the spouse, but in France, the country applies ‘forced heirship’. This means the property is passed onto the children.
