Are we close? We shouldn’t be too far out, as those assumptions are based on the results of a recent survey, based on a poll of 1,200 people planning to buy a place in the sun.
For example, we now know what topics you would like more information about: legal advice is most in demand, voted for by 89.8% of respondents, followed by tax advice 85.6%, insurance 78.9% health cover 78.2% and gaining residency in a new country 77.8%.
Also 72% have a budget to buy overseas of up to £200,000, with a further 16% stretching to £300,000. The difference between those of you buying a second home and those buying to emigrate is small, with the first group accounting for 45% of respondents and the second 51% - the remainder buying for investment.
Crucially though, some of the findings indicated that many of you could benefit from talking to specialists in certain fields of the overseas property sector, and here’s why:
1) More than 80% of respondents planning to move abroad said they would receive their income from either a pension, investments or a combination of the two. If this applies to you, it could be worthwhile consulting two types of specialist before leaving the UK – a financial advisor/tax specialist, and a currency exchange specialist.
Why? Firstly, there may well be a more tax-friendly way to arrange your financial affairs and assets once you are no longer a tax resident of the UK. The Greece Buying Guide can put you in touch with an established financial planning firm that specialises in helping expats, or soon-to-be expats. Secondly, if you will be receiving your pension or income in Sterling or another currency that’s different to your new local currency, you’ll need to make regular currency transfers.
2) When it comes to viewing properties, 50% of respondents said their preferred way was to arrange to visit properties making prior arrangements before travelling, with agents or developers and organising their own time, travel and accommodation, rather than letting an agent organise their trip for them.
3) Half of survey respondents are unnecessarily at risk of paying more for their new overseas property than they need to, for no other reason than failing to plan their currency transfers properly. This is either because they don’t realise how exchange rates can affect the cost of their overseas purchase, or because they don’t pay any attention to exchange rates until the time they come to complete. If this is you, using a currency exchange specialist will guarantee you get a much better exchange rate than you would from your bank, but it also means you can secure an exchange rate the minute you reserve a property, meaning the price in Sterling won’t change before you come to complete. In addition, if you will be receiving your pension or income in sterling then you’ll need to make regular currency transfers and a registered currency exchange company can do this without charging you commission or transfer costs.
We regularly cover all these topics in our FREE monthly publication - a bumper 36 pager - e-mailed to you during the last week of every month. To receive your copy go to our website www.creteonlinemagazine.co.uk and order your copy today!
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Research by HSBC shows the average Briton wants to retire ‘punctually’ at 65 and believes they would need about £22,500 a year to live comfortably. This could come from State pension, company pension, income from savings and dividends from investments. But the report warns that savings will typically run out after seven years.
The most common age of death in England and Wales is 85 for men and 89 for women, according to the Office for National Statistics, yet for those retiring at 65, their nest egg will have shrunk to zero by the age of 72.
At the current abysmal exchange rate of 1.15 of sterling against the euro, the perceived £22,500 a year to live comfortably is equivalent to 25,875€. When you consider you can typically live on 12,000€ per annum in Crete then you can see your money goes twice as far. Stay in the UK and what happens? Your nest egg will run out, you'll pay a fortune for energy bills with heating running for several months a year and be brought down by all the doom and gloom of a UK lifestyle.
Move to Crete and what do you get? Property is cheaper so you should have a nice little nest egg left over after selling your property in the UK, you will enjoy a far better lifestyle for less money and then there's the weather - 320 days of sunshine every year and far lower energy bills because you don't need so much heating. It's a no brainer.
If you are really serious about enjoying the rest of your life, do the maths, embrace the excitement of adventure and let yourself go. Come on over!
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Let's take it step by step, as there does seem to be a lot of confusion and concern.
The vast majority of those buying a Snobby are people who have retired - or will be retiring in a few years time - and all intend to move to Crete either permanently or stay for several months of the year. In virtually all cases they will not generate any income in Greece and are reliant upon capital, savings and pensions, taxed in the UK.
Do you fit into one of the following?
1 - Couple own a property in the UK and receive a UK pension which is taxed in the UK. However they spend 90% of their time living in their Crete property which they own.
2 - Couple only own a property in Crete. They receive a UK pension which is taxed in the UK.
3 - Couple own a property in the UK AND in Crete. They receive a UK pension which is taxed in the UK and spend 6 months a year living in each property.
4 - Couple work in the UK, own and live in a UK property and own a property in Crete where they holiday for several weeks each year. Their income is taxed in the UK.
In all these examples each person would qualify as a UK resident, free to travel between Greece and the UK whenever they wish.
However, as a property owner in Crete there is a statutory requirement to file an annual return with the Greek tax department. This simply shows you own an asset in Greece - your house - and you have brought sufficient money into the country at a level sufficient to maintain the property and pay utilities. This money is verified by obtaining a 'pink slip' from your Greek bank showing you transferred money into your Greek account from the UK.
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The first consideration is price and location. Anyone who hasn't yet sold their property in 2012 needs to seriously think about whether they drop the price. Research throughout 2012 from a variety of sources has shown that a property at the right price will sell. So this means taking advice from experienced agents and also looking at what similar properties in the area are achieving.
While national average property prices have remained stable over 2012, if you are serious about selling you need to be aware of what is happening locally as the UK property market is now dividing into thousands of markets with demand and supply differing according to the postcode and property type.
To help work out what's happening in the market now, you need to better understand the relationship between demand for property in today's market and what's happening with supply. This will help to understand whether now is a good time to sell, or whether you need to drop the price. The average time to sell a property is down from 10.2 weeks in January to 9.8 weeks in November 2012 and this suggests the property market is improving. But it is still much longer than the average six to eight weeks before the credit crunch.
Reducing the price of your house is always emotive as you don't want to lose 'profit'. Unfortunately many people are living in the past, believing their house is worth the same as it was in 2007, but in reality the price may well have dropped by 25% or more! Be realistic. Do the sums. What if you make your house price really competitive, a real bargain. How much would that leave you after the sale? Then equate how much it would cost to stay where you are for two years if you don't sell - council tax, heating costs, and house insurance. Chances are that would total around several thousand pounds - nearly 10,000€ - which you wouldn't be paying if you lived in Crete!
Recent years have seen a growth in online estate agents and they have proved attractive because selling is generally cheaper than with a traditional high street agent. But you need to work out if cheaper is best. For example, a high street agent will have an intimate knowledge of the local market and what is selling at what price and this kind of knowledge can be invaluable. Also a traditional agent gets to hear about who might be looking in the area from other agents, potential buyers who have lost out on a sale and also buyers who may be looking from abroad.
So if you are really serious about making that dream of moving to Crete a reality, do your research. Check out similar houses to yours in the locality. Position the price of yours so it stands out from the rest and make 2013 the year to start a new life in the sun.
Happy New Year
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Following instructions from the Troika on where to cut, where to save amid drastic reform, Greece’s government sailed through a vote on the 2013 national budget shortly after midnight on Sunday 11th November backing the economic plan after two days of debate.
A total of 167 voted in favour of the budget and 128 voted against.
In his speech moments before the vote, Prime Minister Antonis Samaras insisted that the coalition was on the right track to keep Greece in the euro. “Within a few days, we are changing all those things that have not been changed in decades,” said Samaras, and insisted the government would lead Greece out of the crisis. “Greece will exit the nightmare,” he said. “We will either exit united or we will not exit at all.”
Samaras said that the government aims to improve on the deficit and recession figures in the budget and added he would make a personal effort to bring more investments to Greece through economic diplomacy. He also called on Greece’s lenders to stop holding back the country’s loan tranches and to agree on a comprehensive solution to its debt sustainability problem. “The technical solutions to Greek debt problems are straightforward and easy,” he said.
Finance Minister Yannis Stournaras said he was certain Greece would receive its next loan tranche on time. “Nobody can say Greece is not meeting its commitments. We are doing so, and then some,” he told MPs.
Now it is the IMF and the ECB who are in disagreement. Greece has stepped up to the plate and satisfied all the conditions laid down by the Troika, but they cannot agree how to, or when they will provide the funds they have promised Greece can borrow.
Imagine you have asked your bank for a personal life saving loan, and they have agreed provided you jump through every conceivable hoop, hock all your assets as security and pay back the loan at a swingeing rate of interest. You sign up only to be told Head Office needs to discuss it and you have to wait despite meeting all the criteria requested. What do you do?
Give Greece a break. For the man in the street.
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