Skip Navigation Links

Buying Property for Retirement

Many people have the dream of buying a property overseas when they retire. Most of them wish to buy in a place with a good climate and a decent infrastructure.

The phenomenon of people from one country retiring to another is, I believe, going to be one of the major social changes in the next 20 years as the children of the 'baby boomer' era (born in the 1950's and early 1960's) reach retirement age and are, generally, still both in good health and possessed of a wish to travel.

This desire to retire abroad arises for a number of reasons.

For some, a better climate (which generally means a sunnier and drier climate) will help their medical condition.

Others will find that their pension will be inadequate to give them a decent standard of living in their home country but sufficient to allow them to live very well in cheaper places, such as Turkey, Eastern Europe and Central and South America.

Others will simply find the prospect of meeting lots of new people of their own age and enjoying an active social life very attractive.

Key things to look for when buying property for retirement

Is the house safe to buy?

When buying for retirement you need to check all of the same things that you would check when buying for any other reason. Does the house have good legal title? Is it free of debts and other burdens? Does it have the necessary licence to permit it to be used as a dwelling?

If anything, these checks are even more important than usual in that you will be investing all or part of your life savings in this purchase.

See our guide to buying a property for more details of what you should be doing to protect your position.

Accessibility

Most people retiring abroad will want to be able to 'come home' from time to time. This means choosing somewhere that is reasonably accessible.

Even more people will want their family and friends to be able to visit. There has been also of reasearch done into peoples travelling habits and it is quite clear that if you are more than an hour and a half from the airport - at either end of your journey - many of your visitors will be reluctant to travel. If the costs of tickets is sky high they will also be unable to travel, particularly if they are a family. The cost of travelling is likely to rise substantially in the next few years as a result of rising fuel costs and tax policies designed to deter air travel. So this will become increasingly important. By and large, popular and close destinations will always be cheaper than destinations only serviced by one carrier or which are a long way away.

Infrastructure

When you are going to live in a place permanently, you have different needs from a person going their on vacation. You need different types of shops. You need a good medical service for routine ailments as well as for emergencies. You need these facilities to be open all year round and, ideally, you need them available in your own language. Do not under estimate this last point. Even if you speak the local language reasonably well you may not be totally comfortable about having technical discussions about your medical condition in that language and you may not relish the idea of a stay in hospital when, however ill you feel, you must converse in a foreign language.

Medical

Does the area where you are thinking of living have good medical services? This will include both primary care (your family doctor) and hospital care. If you suffer from a known medical condition, are the local doctor and the local hospital experienced in dealing with that condition? Do they speak your language?

Are you going to be able to get medical insurance to cover your life in your new country - and if so, at what cost? This can be an extremely important factor, particualrly if you have a pre-existing medical problem.

Whilst thinking of medical insurance, it is worth pointing out that - in most cases - our clients (and, in particular, our American clients) find that the cost of such insurance is far less than they were expecting and far less than they have been used to paying at home.

For citizens of the European Union (and a few others) living in an EU country (or in a few other countries) there are special arrangements which can mean that they will not have to pay for their medical treatment in their new country. See our guide to health care for more details of this very important topic.

Affordability

Can you afford to live in this place and, just as importantly, are you likely to be able to do so in 5, 10 or 20 years time. Many places (such as Spain and Mexico) that offered foreigners a great and cheap lifestyle in the 1980's are now quite expensive.

What about your investments?

At the moment, your investments are likely to be denominated in the currency of the country in which you live. The income from those investments is also likely to come in that currency. This may not make sense if your day to day living expenses are in a different currency - and a currency that fluctuates dramatically in value when compared with the currency in your new country.

This is hugely important, but often overlooked by people retiring abroad. If you look back over the last few years you will see that a $1 has varied in value between €1.2 and €0.6. £1 has varied between $1.4 and $2 and between €1.05 and €1.5. These variations will make a huge difference to your standard of living if you are dependent for your income upon a pension and investment income in your 'old currency'.

This probably means that you should revise your investment portfolio. In any case, it is probably a good idea to do so. Some of the investments that were great investments whilst you were still living at home will be totally inappropriate (and, possibly, illegal) once you are living in your new country. If you are thinking of reviewing your investments you will need to use a financial advisor who is experienced in dealing with people from your country and familiar with investment opportunities available to retirees living in your new country. Choosing the right financial advisor is critically important. There are some superb and highly professional advisors working in this field but there are also some real 'cowboys' - crooks who are only interested in separating you from your money as quickly as possible. Make sure that you get recommendations, preferably from people who have already used their services and/or from your lawyers, accountants and other professionals who are familiar with the area and the issues involved.

It is almost inevitable that some of your income will come in the form of funds in your old currency. This makes it well worth while forming a relationship with a good foriegn exchange dealer. Many offer special arrangements to reduce the cost of sending regular payments overseas and almost all will offer you a much better exchang rate than the bank either in your 'old' country or where you now live. For example, see www.moneycorp.com for details of services available.

Advice

If you are thinking of retiring abroad we stongly recommend that you take advice from someone familiar with the process and with the issues likely to affect foreigners in the country in question. We can arrange this for you.

The lawyers, accountants and other professionals who are the members of The International Law Partnership Ltd. will be happy to assist.

Next steps

Please look at the Legal Guides, videos, MP3 seminars and other materials set out to the right of this page.

If you would like us to help you, please complete our Client Pack and send it back to us. We will contact you to clarify your requirements and then introduce you to the person most appropriate to deal with your case.

If you do not find the information that you need, please send us an email explaining your problem and we will contact you.

© The International Law Partnership Ltd. Page last revised 4 Feb 2010

P  Please think of the environment. Do you need to print this page?