Thinking About Buying Property Abroad? Here’s What You Need to Know

Dreaming of owning a home in Costa Rica, Portugal, or maybe Belize? You’re not alone. More and more Americans—retirees, remote workers, and investors—are looking overseas for a slower pace of life, better weather, and a lower cost of living.

Buying real estate in another country can be a dream come true. But before you sign the dotted line, it’s important to understand that owning foreign property isn’t as simple as buying a vacation home in Florida. There are legal, tax, and estate planning issues you’ll want to consider—before you make the leap.

Why Americans Are Looking Beyond U.S. Borders

With housing costs rising and daily expenses nearing $6,500/month for many U.S. households, it’s no surprise that Americans are searching for a better lifestyle elsewhere. In places like Belize, you might live comfortably on $2,000/month—and quality healthcare is often more affordable, too.

According to recent surveys:

• 4 in 10 Americans have considered moving abroad.
• Nearly two-thirds of high-earning households are planning to buy foreign real estate in the next five years.

But moving or investing abroad means more than just finding the right view or a charming neighborhood.

What to Know Before You Buy Property Overseas

Purchasing real estate in another country comes with unique challenges. Here are some key issues to plan for:

1. Taxes—at Home and Abroad

If you own property in another country, you may owe taxes in both places. That includes:

• Capital gains tax in the U.S. when you sell
• Local property taxes in the country where the home is located
• Possible income taxes if you rent out the property
• Special local taxes, like Spain’s “deemed rental income” tax or Portugal’s wealth tax on high-value homes

And if you hold the property through a foreign company or bank account, you may also need to file additional U.S. tax forms. The good news? You may be able to claim a foreign tax credit to help avoid double taxation.

2. Your U.S. Estate Plan Might Not Work Overseas

Many people assume their U.S. will or trust will cover everything—including foreign assets. But that’s often not the case. Some countries won’t honor U.S. documents unless they follow local legal requirements (like language, notary, or witness rules).

Even worse, civil law countries like Italy, Portugal, and Mexico may not recognize trusts at all—making it difficult (or impossible) to transfer property the way you intended.

Tip: In some cases, you can create an international will that’s designed to work across multiple countries. But not all nations accept this format, so it’s crucial to get advice tailored to the specific location of your property.

3. Local Inheritance Laws Could Override Your Wishes

Certain countries have what’s called forced heirship. That means the law requires you to leave a portion of your estate—often 50%—to close family members, no matter what your will says.

For example:

• In Germany, spouses and children may be legally entitled to half the estate.
• Similar rules exist in countries like Brazil, Portugal, and Mexico.

If you want more control over how your foreign property is distributed, consider buying in countries that do not enforce forced heirship—like the United Kingdom, Ireland, or many Caribbean nations.

Work with the Right Legal Team—Here and There

Buying property in another country isn’t just about choosing a home—it’s about navigating two legal systems. That’s why you need legal counsel in both the U.S. and the country where the property is located.

An experienced cross-border planning team can help you:

• Structure the purchase in a way that protects your investment
• Align your estate plan with the laws of both countries
• Avoid unnecessary taxes or legal surprises

Planning Ahead Protects Your Property—and Your Legacy

A home abroad can be a great lifestyle upgrade, retirement plan, or investment. But don’t let the excitement of a new adventure lead to costly missteps.

If you already own foreign real estate—or are thinking about it—let’s talk. We can help you understand what it means for your estate plan and work with local professionals to ensure your property is protected and properly planned for.

Buying abroad may feel like a dream—but with smart planning, it doesn’t have to become a legal nightmare.