Common Mistakes to Avoid When Buying Property Overseas

Introduction

Buying a home or investment property abroad can be an exciting way to diversify your portfolio, enjoy a second‑home lifestyle, or secure a retirement haven. For Irish expats, residents and investors, the allure of sunny Spain, affordable Portugal or thriving markets in Eastern Europe is strong. Yet the journey from “dream” to “deed” is fraught with hidden costs, legal quirks and cultural misunderstandings that can quickly turn a promising venture into a costly mistake.

This guide highlights the most common errors Irish buyers make when purchasing overseas, backs them up with recent data and offers practical steps to avoid each pitfall. By the end you’ll have a clear roadmap to protect your money, stay compliant with local law, and make a purchase you can be proud of.

1. Skipping Thorough Research on Local Laws and Ownership Rules

Why it matters

Every country has its own rules about who can own land, how title is transferred and what taxes apply. In Thailand, for example, foreigners cannot directly own land; they must use lease‑hold or a Thai‑registered company. In Spain and Portugal, non‑EU buyers face additional stamp‑duty and notarial fees. Ignoring these nuances can lead to contracts that are not enforceable, unexpected taxes, or even loss of the property.

Practical tip

Engage a local solicitor who specialises in foreign ownership.
Verify whether you need a “usufruct”, a lease‑hold, or a company structure to hold the title.
Check the reciprocity agreements between Ireland and the target country – some nations grant the same rights to Irish citizens as they do to EU nationals.

Irish context

According to the Central Statistics Office (CSO), Irish outbound property purchases rose by 12 % in 2023, with Spain, Portugal and Italy leading the destinations. The surge underscores the importance of understanding each jurisdiction’s legal framework before committing funds.

2. Under‑Estimating Hidden Costs

What’s hidden?

Beyond the purchase price, buyers face:

Stamp duty / transfer tax (often 6‑10 % of value)
Notary and registration fees (up to €2 000 in Spain)
Legal fees (typically 1‑2 % of the price)
Ongoing costs: property tax, community fees, insurance, maintenance, and utilities.
Currency conversion fees – especially if you use traditional banks that add a markup of 2‑4 % on the exchange rate.

The International Property Alerts report notes that hidden costs can add 10‑15 % to the overall outlay, a figure many first‑time buyers overlook.

Practical tip

Request a break‑down of all fees from your agent or solicitor before signing a preliminary agreement.
Use a specialist foreign‑exchange provider such as Wise or CurrencyFair to lock in rates and avoid bank mark‑ups.
Build a contingency buffer of at least 10 % of the purchase price for unexpected expenses.

3. Letting Emotion Override Investment Logic

The danger

Falling in love with a beachfront villa or a historic town‑centre apartment is natural, but emotional decisions often ignore rental yield, resale potential and market volatility. A property that suits your holiday tastes may struggle to generate consistent rental income, leaving you with a “vacant‑home tax” and high holding costs.

Practical tip

Run the numbers: calculate gross rental yield, net yield after expenses, and projected capital growth.
Compare the property’s price per square metre with the local average.
Use tools like Numbeo for cost‑of‑living data and AirDNA for short‑term rental performance.

4. Ignoring Currency Exchange Risks

Why it hurts

Currency fluctuations can erode your buying power. The euro‑pound exchange rate swung from £1 = €1.15 in early 2024 to £1 = €1.07 by November 2025, a difference that could add or subtract €30 000 on a €300 000 purchase.

Practical tip

Lock in rates with a forward contract or a “rate‑lock” service offered by many currency specialists.
Consider staggered transfers: move funds in phases as you meet milestones (deposit, balance, closing).
Monitor the Euro‑Pound Index and set alerts for favourable movements.

5. Overlooking Everyday Practicalities – Healthcare, Infrastructure & Lifestyle

The hidden barrier

A property may be perfect on paper, but if the nearest hospital is 30 km away, supermarkets are scarce, or internet speeds are poor, the day‑to‑day experience can be disappointing. For retirees and long‑term renters, access to public transport, schools and reliable utilities is essential.

Practical tip

Spend at least two weeks living in the area before buying. Use short‑term rentals to test commuting, grocery shopping and local services.
Check the local healthcare system: is there a public hospital within 20 km? Are private health insurers accepted?
Review utility bills and internet coverage maps – these can vary dramatically even within the same city.

6. Failing to Plan an Exit Strategy

The risk

Markets move. Economic downturns, political changes or shifts in tourism can affect resale value and rental demand. Buying a niche property (e.g., a ski chalet in a remote village) may limit your pool of future buyers.

Practical tip

Choose properties with broad appeal: good transport links, proximity to amenities, and a track record of stable price growth.
Keep documentation (title deeds, tax records, renovation receipts) organised for a smooth resale.
Discuss potential resale restrictions with your solicitor (e.g., right of first refusal by the development’s management company).

7. Going It Alone – Skipping Professional Support

The consequence

Many Irish buyers try to save money by handling the transaction themselves. This can lead to missed deadlines, incomplete due diligence and exposure to fraud. The International Property Alerts article stresses that a team of professionals (local lawyer, reputable agent, tax adviser, mortgage broker) is the most reliable safeguard.

Practical tip

Select a local real estate agent with proven experience handling foreign buyers. Look for memberships in professional bodies such as FIABCI or NAR.
Hire a tax specialist familiar with both Irish tax law and the foreign jurisdiction to avoid double taxation and to claim any applicable reliefs.
Use a neutral escrow service for fund transfers, especially when large deposits are involved.

8. Neglecting Tax Implications in Both Ireland and the Destination Country

Key points

Irish residents are taxed on worldwide income, including rental income and capital gains from foreign property.
Many countries impose withholding tax on rental profits (e.g., 19 % in Spain).
Double‑taxation treaties between Ireland and most EU countries usually allow a credit, but paperwork is required.

Practical tip

Register the foreign property with the Irish Revenue and file a Form 11 for rental income.
Keep detailed records of expenses (mortgage interest, repairs, management fees) to offset taxable profit.
Consult a cross‑border tax adviser to optimise your structure – a LLC, trust or personal ownership may have different tax outcomes.

9. Over‑Paying for Renovations or “Fix‑er‑Upper” Projects

The trap

Renovation budgets often balloon. A 2024 survey of Irish investors buying to refurbish in Portugal showed average cost overruns of 28 %, mainly due to unexpected structural issues and higher‑than‑expected material costs.

Practical tip

Conduct a full building survey before purchase, covering structural integrity, wiring, plumbing and asbestos.
Obtain multiple contractor quotes and include a 10‑15 % contingency.
Verify building permits and local zoning rules – some renovations may be prohibited or require lengthy approvals.

10. Not Securing Adequate Financing Early

Why it matters

International mortgage options differ widely. Some banks require a higher deposit (30‑40 %) for non‑resident borrowers, while others may only offer short‑term financing. Delays in securing funds can cause you to lose a property or miss a price‑lock window.

Practical tip

Approach Irish banks with overseas lending desks (e.g., Bank of Ireland International, AIB Global Banking) early to understand eligibility.
Explore local lenders in the target country that specialise in expat mortgages.
Keep a pre‑approval letter ready to demonstrate seriousness to sellers and agents.

Summary of the Top Mistakes

#	Mistake	Core Remedy
1	Ignoring local ownership laws	Hire a local solicitor
2	Under‑estimating hidden costs	Get a full cost breakdown, use currency specialists
3	Emotion over investment logic	Run detailed yield and growth calculations
4	Currency exchange risk	Lock in rates, stagger transfers
5	Overlooking daily life factors	Live‑in test the area, check services
6	No exit strategy	Choose broadly appealing assets, keep docs ready
7	Going it alone	Build a team of lawyer, agent, tax adviser
8	Tax blind spots	Register with Irish Revenue, consult cross‑border tax expert
9	Renovation cost overruns	Full survey, multiple quotes, contingency fund
10	Financing delays	Secure pre‑approval, explore both Irish and local lenders

Conclusion

Buying property abroad can enrich your life and strengthen your investment portfolio, but only if you navigate the process with the same diligence you would apply to a domestic purchase. By avoiding the pitfalls outlined above—legal missteps, hidden fees, currency volatility, and lack of professional support—you’ll safeguard your capital, comply with tax obligations and enjoy the lifestyle you imagined.

Take the time to research, assemble a trusted advisory team, and run the numbers rigorously. The reward is a well‑chosen overseas home or rental asset that brings both peace of mind and financial benefit for years to come.