Agents can ease buyers' problems

ADVICE: Hiring an Irish agent doesn't cost anything and gets buyers good local legal and management contacts.

Buying and managing properties abroad can cause headaches. The first solution is to hire the services of an Irish agent, who will help investors find suitable property and refer them to trusted developers, solicitors and local management companies.

"Buyers sometimes don't realise that it costs them nothing to go through an agent. It's the developers that use the agent who pays the agent," says Ms Noreen Hynes of Aquarius Properties.

The company is a member of the Federation of Overseas Property Developers, Agents and Consultants (FOPDAC).

The agent should not be the developer, pushing one site on the client. It should instead help clients prepare a list of questions to ask the developer: "Is air conditioning pre-installed? Are the white goods included? Is there parking available? It's the little things like that," says Ms Hynes.

"It's important that the developer is bonded, so if it goes bust, you will get your money back," she adds.

The booking deposit is the only payment that should be paid directly to the developer. In Spain, the average deposit costs €3,000 and is typically non-refundable.

A receipt is given to a solicitor, then all payments after that go through the solicitor.

According to Mr David Marriani, a member of the Institute of Professional Auctioneers and Valuers (IPAV) and owner of fully bonded company Riviera Dreams, deposits can disappear and people start to worry when there is no contact with the developer. He stresses it is vital to employ a bilingual agent or solicitor.

"There is a huge barrier there," Mr Marriani says. "The deeds will be in French, with no translation.

"They don't care about translating and that's a major problem for a lot of my clients.

"If you want to take out a mortgage or have day-to-day dealings with a French bank, you absolutely must have a bilingual, licensed agent."

For people investing in Spanish resorts, it is important to employ a bilingual solicitor to check the terms of the contract, because under Spanish law the buyer can inherit debts on a property.

It is also a good idea to make a Spanish will so the property won't get tied up in the Spanish courts after your death.

In Florida, US sales tax will be added to the asking price, while in Spain, around 10 per cent of the price will be added to pay for various local taxes and legal fees. Capital gains tax is charged at a rate of 35 per cent.

In France, these fees, including a 7 per cent stamp duty on second-hand homes, will normally be included in the price. Capital gains tax is paid on a sliding scale up to 33 per cent.

"If you're an Irish resident, you're obliged to file tax both here and abroad, though you can claim a lot of expenses against it. You're not caught twice, but you must make sure your overseas accountant does your returns and on time," says Ms Hynes. The investor will then receive credit from the Revenue for any foreign tax paid.

Distance can act as a deterrent for some investors and the availability of direct flights may influence their choice of location. "It's a long way to Florida, for example, if something goes wrong," says Ms Hynes, "so you do need an agent to hold your hand."