Buying Property in the UK as a Malaysian
Property in the UK is a hot commodity among Malaysians. With the country’s strengthening currency, now seems to be a great time for those looking to buy property abroad. The good thing is, with proper planning and research, you can find an investment that will be profitable. The trick to buying property in the UK is looking at the six factors or tips below to be considered when determining if it’s a good idea or not.
1. Property Value
Having a property in the UK is an investment. This means not only will you be getting a physical asset, but also an investment that will yield returns in the future. But to determine whether the property is a good investment or not, you need to know what that return is and how it will be produced. The most important factor, of course, is knowing how the value of your property will change in the future. This is certainly difficult, since the property’s value may go up or down, depending on a number of factors. But you need to be aware that the potential for profit lies herein, and not to rely too heavily on one factor.
2. Property Market
Not only do you need to know how your investment will change in value, but you also need to know how the UK property market works in general. In the UK, house prices tend to rise more slowly than other countries such as Singapore (or even Malaysia). This is because the housing stock tends to be larger in the UK than in other countries. If you’re looking to buy a property here, make sure you’re aware that the UK property market tends to be more stable than other parts of Europe.
3. Business Factors
Property values in the UK may go up or down, but this doesn’t mean that you will automatically recoup your initial outlay. It also doesn’t mean that you will definitely see a profit. For example, if your property is rented and the tenant fails to pay rent or damages the property, you will incur losses. The same thing goes for expenses, like maintenance costs or repairs. Even in good times, it is hard to estimate how much money you’ll spend on these things. That’s why it’s important to consider the business factors when buying property in the UK.
4. Tax Factors
Taxes are also something you should be aware of when buying property in the UK. You need to know that there are different tax laws for the UK than there are in Malaysia. For example, the tax rates are different, and the payments for capital gains tax may be higher than you think. Failure to pay taxes, especially capital gains tax on real estate in the UK has become more common and can result in penalties in addition to potentially losing your property. Make sure you’re aware of all the potential costs associated with buying property here.
5. Availability
The UK property market is not as saturated as it is in some parts of Europe, and that makes it a good option for investors. But there are a lot of people who want to buy property in the UK, which means there are many properties to choose from. This can make it hard for buyers to find properties at a reasonable price. It can also mean that competition may make finding properties difficult. Here, you need to be aware that the availability not only varies from one area to another, but also from one price category to another. For example, the lower end of the market is more abundant than the upper end. So make sure you know what type of property you need before you buy it.
6. Know How to Buy Property in the UK's Taxation and Legal System
Another consideration when buying property in the UK is legal issues ranging from tax liability to disputes with tenants. In the UK, property is treated like most other investments. This means that you need to pay capital gains tax on your property when you sell it. The way it works is, first of all, you’ll pay a basic allowance of £10,900. Anything over and above that amount is subject to capital gains tax at 18 percent (including any other taxes). You also need to remember that you must include the property in your taxable earnings and report it every year through self-assessment. If you fail to do so, you face a penalty. So make sure you’re aware of how UK taxation works before you buy property.
One important thing to consider is that while there are many tax advantages to buying property in the UK, it may not be enough to totally offset the costs of owning and maintaining a property here. That’s why it’s important to do your research and take advantage of all the tax benefits that are available with real estate investment.
These are some of the things that you need to know if you intend on buying property in the UK. And while they may be obvious, they aren’t easy to realize. So why not give us a call, we will be happy to go over things with you and make sure that you are on the right path so that once you arrive in the UK, everything will run smoothly and smoothly.