Fancy a bach abroad?
For those wanting to buy a holiday home overseas, here are a few things to think about, writes Josh Martin.
With all the facts and stats flying about over here before the UK votes on its membership of the European Union, one number stood out to me: 200,000.
That’s the number of Brits who own homes in France. Add to that a similar number for Spain, Portugal, and all along the Med and you have one voting group who might think that if the UK leaves the EU, life will be no holiday. Of course, the holiday property concerns of well-to-do English retirees seems a world away when you’ve got your feet up on the deck at Kaiteriteri or Hahei.
I’m from the Coromandel, so know a tourist influx when I see one, but the sheer number of Brits who holiday in the sunny Mediterranean enough to invest in a home there is something to adjust to coming from New Zealand, where for most the middle-class dream begins and ends at boat, bach, and BMW.
Anyone who keeps up with the news or can perform a basic Google search can conclude that when it comes to ‘‘foreign holiday home’’ and ‘‘New Zealander’’ the results are for inbound rather than outbound traffic. For those who want to expand the home ownership dreams beyond Aotearoa here are some things to think about.
Where to settle?
Going in with some defined criteria is going to make the search easier. The holiday hotspots of Australia’s east coast would make the most sense when thinking about a holiday home abroad, when considering airfares, visas (or lack of), travel times, and temperatures.
For those of us for whom the house wine isn’t Bollinger, then the cost of holiday commutes ($400 return per person, at a minimum) is going to put a stop to your foreign property daydream right about now. But do consider the flight costs in context by comparing similar properties (the satellite towns of the Gold Coast versus the Coromandel or Far North), as well as the rental income each could generate to offset those flights.
If you’re still at a loss, your journey ends here – be sure to give me a wave when we’re both snail-pacing in the holiday traffic on the way to Whangamata. Elsewhere, Pacific favourites like the Cook Islands, Fiji, and Samoa may look idyllic, but compared with Australia’s relative easy homeownership rules, your route to your own island paradise may be stormy.
I’ve found a place, but can I buy?
LJ Hooker Australia said people are flocking to buy holiday homes from north Queensland all the way around to Victoria’s Great Ocean Road. Foreign property owners are welcomed in Fiji, although legislation regarding the small share (8 per cent) of land that is freehold is targeted to encourage the ownership of holiday homes rather than businesses in its town centres. I’m not sure that I’d trust Frank Bainimarama not to change the laws and boot me out – but hey, many Kiwis seem to be welcomed with open arms.
But the Fijian approach is more accommodating than the Cook Islands, where earth is at a premium and there is no freehold land to buy, and non-residents can only have leaseholds of five years (although this can be extended), according to Cook Islands Realty – unless you’re a Cook Islands registered company, which I assume you’re not.
In sunny Samoa it’s more of a headache to buy a slice of paradise. Around a 10th of land is public freehold, but non-citizens need head of state approval to purchase. And suddenly, it makes sense why Kiwis keep their bach dreams rooted in Aotearoa.
Wrapped up in red tape
Ray White agent Cameron Smart said it’s all fairly tickety-boo in terms of getting a sale across the line as a Kiwi buying up in Australia: ‘‘The process would be as normal for achieving finance, generally three to four weeks from acceptance of an offer, to achieve finance approval depending on if the purchaser has pre-arranged a finance approval.
Once finance is approved, there would be a further three to four weeks until the property settles’’. See, simple. The Western Australian agent didn’t point to any red tape as such, and said groups pooling together to secure a holiday home can be accommodated.
As with any property purchase you’ll need an experienced lawyer and to shop around for agents who have dealt with similar crossborder deals. And that’s before a trip to see your bank manager. Your current bank may be more receptive than a local one, and will also mean you’ll avoid the need for a hefty deposit and shield yourself from foreign exchange rate fluctuations for mortgage repayments. Where ever you look to settle be sure to question the basic utility provisions, and ask how often services like power and telephone lines are disrupted each year, and how long problems take to be sorted.
Love thy neighbour
To make sure your new holiday home generate some muchneeded cash after purchase, it makes sense to let it out to holiday makers when you’re back home. A local holiday rentals manager can help look after the process from start to finish. Befriending your new neighbours or a local to manage keys and cleaning will be in order if you’re using home renting website Airbnb and looking after the booking process yourself. It’s common in Aussie and the Pacific, but it’s important to keep up with how tax laws and local zoning bylaws are changing on home letting (for example on Fiji’s Denarau island, zoning laws make it illegal to have rental tenures of less than three months) – not to mention buying a rock-solid home insurance policy that covers short-term letting. Renting out to tourists is easy and no doubt there’ll be demand from people like me for whom owning a slice of paradise remains a dream.