General tips and warnings when purchasing in a rural area

 

By Simon Conn, Overseas Property & Finance Specialist

 

Now that the global property market is picking up, more UK buyers are looking to purchase overseas for investment and retirement purposes. 

 

Prices in countries such as Spain are at rock bottom at the moment and there are some bargains to be had, particularly in the more rural areas where prices were already lower than coastal properties.

 

Rural properties are appealing to people who do not want to take part in city life, as a home in the country is perceived to offer a better quality of life and provide a less stressful environment to work and live in. Prices can also be lower, making it a more affordable option.

 

But there are many potential pitfalls if you do not carefully consider any purchase, so make sure you do not get caught out by the different rules and regulations. 

 

Farms and adjacent buildings are popular with buyers, particularly in Portugal, as they are perceived to be a potentially safe investment which could possibly offer a good long-term return. In Portugal if you plan to live in the property yourself, there may be possible tax advantages available to Foreign Nationals and therefore these should be checked with your Lawyer/financial adviser.

 

You will need to have the correct visas and resident permits for moving to another country and you may have the same, or different, obligations when compared to natives when it comes to local and national taxes.

 

If you are retiring to a rural area, check out the location of the nearest hospital and make sure you have the correct medical cover in place in case of illness. You do not want to be stuck out in the sticks without a doctor or nurse nearby.

 

It is advisable to investigate the local transport links, particularly if you do not have a car. If you think the UK’s transport service can be unreliable, you could be in for a shock with the bus service in a rural area abroad! 

 

Rural properties are often not connected to the main drainage sewer and require a septic tank. In countries such as Spain, there can be a lack of water during the summer months and there can be problems if you are not connected to mains water.

 

Electricity can also be an issue as some rural properties do not have a permanent connection to the electricity grid and rely on a generator.

 

Research whether there is a history of flooding, avalanches or earthquakes in the area you are interested in, so that you can be fully prepared if one of these happens. Bear in mind that if you do not speak the local language and there is no one around to interpret for you, this could be a barrier too. 

 

There can be issues with buying both old and new properties. Check that the property is registered with the land registry as in very rare cases, a property may never have been registered. Likewise, make sure that any extension to a property has been approved and registered. Some home owners choose to build in rural areas and not apply for the relevant permissions, as they think there is less chance of getting caught by the authorities, but this is very risky.

 

There could also be issues with properties that have been divided into separate plots, but have never been officially registered to save costs and taxes. In some cases the division is illegal as it falls below the minimum plot size set out by the local authorities.

 

In countries such as Italy, there are ‘pre-emption rights’. These rights can apply to neighbours and farmers and mean that in some cases they have to be notified if a property is going to be sold. 

 

Beware of the inheritance rules in places like Spain as it means a property may be owned by several different people (usually siblings). It is not uncommon for one owner to want to sell the property and start sale proceedings, while another does not want to sell, which may halt the sale or cause other problems.  

 

Other issues, such as rights of way, can sometimes apply to a property, so it is important to make local enquiries to establish whether there are any rights over a property you are interested in. You do not want to find people wandering around your grounds unexpectedly.

 

Although there are many things to be aware of when buying a rural property, do not let these potential pitfalls put you off as there are many advantages in doing so. You are likely to get a bigger property with more space than buying on the coast and the views can be equally spectacular and it is certainly quieter. 

 

The most important rule applies when you buy any property abroad - make sure you get everything properly checked and use an independent lawyer and surveyor, so that any potential issues can be identified before you sign anything.