Moving overseas is an exciting journey. Overseas property expert Kim Brown talks about the hidden costs involved

T he first step is to choose a location that ticks all the boxes – whether you’re buying a second home or planning to emigrate, finding the perfect property in the ideal area is a top priority. Often, buyers spend hours on the Internet trawling through estate agency websites. Then they spend days going on viewing trips – driving around, checking out neighbourhoods, finding the best views and, if budget permits, thinking about what life will be like once the move is made.

One element that many buyers fail to consider is calculating all of the day to day or annual costs. I’ve written this often, but it really is a key statement – what you don’t know, you don’t know. Some people have made a move without realising that the tax system in their overseas destination is quite different from the UK. For example, people that move to America will have a reduction in tax on goods and services (17.5 percent VAT down to around eight percent), however many don’t realise that if you own a property in America – rather than a £1,000 - £2,000 council tax bill, you’ll have to pay a very steep tax on your property which also includes a mandatory school tax which can amount to $3,000 to $6,000/year.

While on the topic of America, another cost that many Brits fail to calculate is medical insurance. In the states, and many other countries, there’s no such thing as a government funded NHS system. If you want to ensure that your health is taken care of, yearly insurance can be astronomical. In the US, many people pay around $750/month or more plus the high cost of prescriptions.

Another cost that goes overlooked is a yearly mandatory property maintenance fee for servicing a property and surrounding areas. Maintenance fees are often decided by a management company who are appointed by a committee and can be steep. And although it may seem small, having added costs such as pool maintenances or running the air conditioning 24-7 can add up. I’ve also heard stories where people move to a country with a lower cost of living only to find that they’re restricted to local seasonal produce unless they want to pay an arm and leg to get out-of-season fruit and vegetables.

On the flip side, many countries truly allow people to make their money go further. Costs often depend on the size of the property, various taxes, monthly fees, medical costs and what the day-to-day products and services amount to. People can increase their buying power provided they know how to effectively set up the property purchase, arrange their finances and learn when and where to buy their day to day goods.

When surfing the Internet or viewing properties, it’s important to research every possible cost and annual fee in the country of your choice. Making a list can often help to collect information. Consider asking what taxes there are and how they’re calculated. Additionally, you can list medical care, service fees, utilities, petrol, transportation, insurance, groceries, clothes, Internet, cable/satellite TV, hobbies/sports fees, alcohol/cigarettes, and any other area where you spend your money. As for hobbies and sports, if you’re in to golf, it’s well worth the time to find out what club membership fees are or enquire about the cost of an 18-hole game.

It’s important to really understand all the facts. The grass isn’t necessarily greener overseas – it’s different. Compromises need to be made and therefore it’s well worth the time to analyse where you are, where you want to go and which country truly fits the bill.

Kim Brown is a director of The Overseas Guides Company who produces guides on buying overseas property. The guides are dedicated to exposing poor practice, property buying pitfalls and providing an educational instruction manual to buying and/or investing overseas. www.OverseasGuidesCompany.com