Buying overseas property Overseas property tax matters

Work out what tax you might be liable for if you are considering buying abroad

Tax on overseas property

You will have to pay capital gains tax on the property when you sell it if it’s not your main home, although in many countries this is reduced or waived depending on how long you've owned the property. Inheritance tax may be payable by your heirs, though this no longer applies in some countries, such as Italy. Visit our guide to tax on property to find out more.

You'll also be liable for the local equivalent of council tax.

If you live abroad for more than half of the year, your status as a UK tax resident will expire after three years, though any UK income will still be taxable here.

Retiring overseas 

If you retire overseas you can claim the UK state pension overseas but it will only rise annually if you're moving within the European Economic Area (EEA) or to a country with a reciprocal agreement with the UK.

Other pensions should pay out regardless of where you’re living but some schemes will pay only into a UK bank account and many will pay only in sterling, placing the income at risk of currency fluctuations.

Within the EEA you will receive free healthcare on a par with that available to local people but if you have yet to retire you will need to arrange local health insurance (through your employer, privately or both) after two years.

If you are planning your retirement visit our guide for more information.