As Spain moves to impose a 100 per cent tax on property purchases by non-EU citizens, British expats are increasingly looking for alternative destinations to invest in their dream homes abroad.
The new Spanish measure, aimed at addressing housing affordability, has prompted many Britons to explore other Mediterranean and Asian locations offering attractive incentives.
William Cooper, Marketing Director at William Russell told GB News: “Owning property abroad can be a valuable way to diversify your income, especially if you’re concerned about pension stability.
“Rental income from properties in desirable locations can provide a steady revenue stream, potentially offsetting fluctuations in pension income. Additionally, property investments can appreciate over time, offering capital gains that can further bolster your financial security.”
Those considering alternatives to avoid Spain’s potential 100 per cent tax can look to countries like Italy and Greece offer attractive incentives.
He explained that Italy presents two compelling options for British buyers seeking alternatives to Spain. The country has revived its popular €1 Houses initiative, which aims to breathe new life into rural villages experiencing population decline.
Towns like Zungoli in Campania and Mussomeli in Sicily are offering abandoned properties for just €1 to attract new residents.
Greece offers another appealing option through its Golden Visa Program, launched in 2013
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Additionally, Italy offers an attractive seven per cent flat tax regime for foreign retirees who establish residency in southern towns with fewer than 20,000 residents.
To qualify for the tax benefit, applicants must have lived outside Italy for the past five years, with the scheme allowing them to pay a flat seven per cent tax on all foreign income for up to nine years.
Greece offers another appealing option through its Golden Visa Program, launched in 2013. The programme grants residency to non-EU investors who purchase property in Greece, with permits renewable as long as the property is retained. Family members can be included in the permit, and there’s a path to citizenship after seven years.
Cooper added: “Greece offers a lump-sum tax of €100,000 per tax year for individuals who become tax residents, regardless of the amount of income earned abroad.”
This tax regime can be extended to family members for an additional €20,000 per person per year, regardless of foreign income earned.
Thailand offers a welcoming environment for British expats seeking property investments. Foreigners can purchase freehold condominiums, provided foreign ownership in a building doesn’t exceed 49 per cent.
The country also allows expats to lease land or houses for up to 30 years, with luxury developments in Phuket, Pattaya, and Bangkok specifically designed for foreign buyers.
For those aged 50 and above, Thailand offers a “Retirement Visa” subject to meeting financial requirements.
While Thailand doesn’t provide specific tax incentives for foreign retirees, Cooper explained the country’s property ownership rules make it an attractive alternative for British buyers.
Areas such as Phuket, Pattaya, and Bangkok have become particularly popular among foreign investors seeking property opportunities.
Beyond these destinations, Cooper explained several other European countries offer attractive tax benefits for British retirees.
He said: “Portugal’s Non-Habitual Resident (NHR) scheme offers significant tax benefits, including a flat 10 per cent tax on foreign pension income for ten years.”
“Cyprus offers a low flat rate of five per centon pension income and has no inheritance tax, making it attractive for retirees.”
The absence of inheritance tax in Cyprus adds to its appeal for British expats seeking long-term property investments abroad.
For those considering property investment abroad, Cooper emphasised the importance of thorough preparation.
He said: “Buying property abroad as a UK expat can seem complicated with unique challenges such as language barriers, exchange rates, and more difficulty getting a mortgage. But it’s pretty straightforward if you know what you’re doing.”
Cooper advises potential buyers to “work with local experts, monitor currency exchange rates, and organise financial documents well in advance to make the process go as smoothly as possible”.
