How to build or renovate a house abroad (UK guide)

Fancy taking on a renovation project overseas, or found the perfect plot of land to build on? If you’re able to navigate local planning laws and building codes, manage your finances and complete the work - you could end up with your dream holiday home.

Around 1.5 million Brits are estimated to own a property overseas,¹ so you’ll be in good company.

In this guide, we’ll run through everything you need to know about renovating or building a house abroad. This includes info on getting an overseas mortgage, finding suitable land, understanding local planning laws and finding the right professionals to work with.

And as you’ll undoubtedly need to send money between countries while managing your project, we’ll also show you how to avoid losing out to currency conversion - using clever solutions such as the Wise account.

Building a house abroad: How it works

It’s easy to understand why you might be tempted to build a house overseas. Who would turn down the chance to create their dream house, in the perfect location? It could even work out cheaper, depending on the cost of living and property prices in your chosen destination.

There are lots of reasons you might be considering building a house abroad. It could be to live in, or a holiday home to help you escape the cold UK winters. Or you might be interested in renting it out to earn some extra income.

What you need to build a house or property overseas

Now, let’s run through a checklist of the steps involved in building a house abroad.

1: Find suitable land

The first challenge is to find a suitable plot of land to build on. Not all countries will sell land to foreign buyers, and in some cases you’ll need to be a resident in order to buy either property or land.

For example, you can buy property in Switzerland but only if you have the right permit. And to buy land to build on, you’ll need a separate permit.

Other countries have restrictions on what kind of land you can buy. When researching land and property in Morocco, for example, you'll find that foreigners can buy land but only if it isn’t designated for agricultural purposes.

Similarly when buying in Dubai, you can only buy in zones designated for foreign buyers. But you can buy land as well as pre-built homes.

When it comes to finding land to build on, a specialist estate agent could be your best bet. Choose someone with expert knowledge in the country you’re interested in - they can help you find a plot of land that suits your needs and budget.

2: Research overseas mortgage options

At this stage, it’s a good idea to prepare your finances. You have a few different options for funding your overseas building project:

• Contact banks in the country you’re building in, to find out if they offer self-build mortgages. For example, Banco Santander has self-build mortgages for people building property in Spain. If you’re a non-resident though, you’ll need to check whether you’ll be eligible to get a mortgage in Spain.
• Remortgage your house in the UK - just make sure you can afford the repayments and don’t overstretch yourself.
• Use your savings.

3. Get planning permission and construction permits early

Before you do anything else, it really is vital that you look into local planning laws. You’ll need to apply for the relevant permissions and permits as soon as possible, as it could take a long time for them to be approved. This could hold up your project and lead to expensive delays.

It’s always recommended to work with a local planning expert, who can help you submit your application. They can help with language translations, advise you on the conditions you need to meet and prevent you from making any costly errors.

4. Check local laws and building regulations

Alongside planning permission, there may be other building regulations or municipal/local authority rules that affect your project. This is another area a local conveyancer, solicitor or planning expert can help you with.

5. Employ an architect and local builders

Now it’s time to start finding those key contractors who will help you turn your plans into your dream home. You’re likely to need an architect, and possibly a structural engineer too. And just as importantly, you’ll need a building firm to actually complete the construction.

Here are some tips on finding local tradespeople to work with:

• Start your search with accredited bodies for trades in the country, such as the Chambre de Métiers et de l'Artisanat in France or the Royal Architectural Institute of Canada.
• If you’re not fluent in the local language, hiring a translator is a smart investment.
• Get multiple quotes, and be wary of those that seem a little too good to be true.
• Word of mouth recommendations are a great way to find tradespeople, but make sure you can trust the source.

What to consider when building a property overseas

To help you prepare for your building project, here are some key things to consider.

Research the country’s laws before you start planning

When it comes to building overseas, there’s no such thing as too much research. Find out everything you can about the country’s laws as they apply to building property, including the rights and restrictions on foreigners.

You need to understand all you can about how large a property you can build on your plot, local restrictions on what you can build and how projects need to be conducted.

Working with an expert in local planning and building laws will be essential.

Create a detailed plan

Robust planning is the best way to complete your project on time and within budget, and avoid any major setbacks.

Create a detailed roadmap and timeline for the project, along with a comprehensive and accurate budget (based on real prices of materials and labour in the country you’re building in).

It’s worth spending more time with your architect, to make sure all the plans are completely up to scratch before spades hit the ground.

Decide on your involvement

Do you want to project manage the build yourself, or prefer to trust a local expert to manage it for you?

It could be beneficial to be on-site overseeing the project, making sure everything is exactly the way you want it - and that work is up to standard. However, you’ll need the right experience in building to fill this role, and you’ll need to be fluent in the local language too.

Alternatively, you can oversee the project remotely, with the assistance of a local on-site project manager. This can be preferable for first-time builders or those not fluent in the local language, but make sure you work with someone you completely trust.

How to pay your builders and contractors

Paying your builders, contractors and other professionals on time is crucial. But you also don’t want to be hit by unfair currency conversion fees as you pay international invoices.

It could be a good idea to open a multi-currency account ready for your project to begin.

The Wise account lets you manage your money in 40+ currencies and securely send payments all over the world at mid-market exchange rates for low, transparent fees*.

There’s even a dedicated solution for sending large amounts between countries quickly and securely.

Fees and taxes

Whether buying a property abroad or building one, there will always be fees and taxes to pay.

Here are some examples of what kinds of costs you’ll need to factor into your overall budget:

• Overseas mortgage fees, such as arrangement/product fees and broker fees
• Stamp duty and property transfer taxes on the purchase of land
• Real estate agent fees
• Application fees for planning permission and permits to build.

You might also want to look into what buying property abroad means for your UK tax obligations.

Currency exchange rates

If you’re still based in the UK, you’ll need to figure out the best way to pay the fees and taxes above, as well as your builders and contractors.

Currency exchange rates will be a major factor. Send money with your bank and you may be losing out to poor rates and high fees, especially when sending large amounts.

But send money with Wise and you’re guaranteed mid-market exchange rates with no margin or mark-up, as well as low, transparent fees*.

You can use our handy converter tool below for live rates:

Renovating property abroad: How it works

A full-scale building project isn’t for everyone. Renovating a property can be much more appealing, especially if the purchase price is right.

If you can snap up a fixer-upper, you could save a fortune compared to buying a pristine property in the same area. You can create more value by doing up a property compared to the cost of renovation work, especially in areas where labour costs are lower.

Property renovation options

There are a few ways you can renovate property overseas, starting with dedicated schemes and incentives such as:

• The 1 Euro Houses or €1 Houses scheme in Italy. This is where some of the country’s most dilapidated houses or properties not previously used as residences (such as lighthouses for example) are available for the symbolic price of €1 provided the buyer can provide a clear plan and financing for renovation.
• The ‘Akiya’ houses of Japan, which are abandoned or otherwise vacant houses in rural parts of the country. The government or municipal departments make these houses available for purchase at very cheap prices, provided the new owner brings them up to standard.

What you need to renovate or restore a house abroad

Here’s a look at the steps involved in renovating a property abroad.

1. Find a property to buy

Buying a renovation project is a little different compared to buying a fully finished home.

You’ll need to get a full survey carried out to identify any major structural issues, and perhaps ask a local builder to give you an initial quote for renovations and repairs.

You need to do your sums carefully, making sure the purchase price along with the cost of renovation works represents good value for money.

To find a property to buy, you might want to start your search at overseas property websites and agents such as:

• Zoopla
• Rightmove
• OnTheMarket
• A Place in the Sun

Alternatively, you can use a local agent to find a property for you.

2. Get your finances in order

You might need to apply for an overseas mortgage to finance your property purchase. You could even inquire whether your chosen lender offers funding for renovations. Otherwise, you’ll need to have savings or raise funds in another way such as remortgaging your house in the UK.

3. Create a plan

Using the results of your building survey and perhaps some plans from an architect (for more ambitious projects), you can create a detailed plan for your renovation works. This should include a timeline for the works and a detailed budget based on accurate costs of materials and labour in the local area.

4. Check local planning laws and building regulations

You might need to apply for planning permission or permits to carry out your renovations, especially if you’ve bought a listed or protected building (or you’ve purchased property in a conservation area). Check this out and apply for the relevant permissions as soon as possible.

5. Get quotes from builders and contractors

As with building a property, it’s a good idea to start searching for builders and contractors at accredited trade bodies - just like the Federation of Master Builders (FMB) in the UK.

Get several quotes for the work, and be extra cautious about super cheap quotes - they could be too good to be true.

What to consider when renovating property overseas

Here are a few crucial things to bear in mind when renovating a house abroad.

Protected or listed buildings

Just like in the UK, some properties overseas have a protected or ‘listed’ status. You need to know about this before purchase, as it could mean restrictions or conditions on what you can change about the property.

Planning permission

Some renovation works may require planning permission, such as changes to balconies, exterior works and extensions. Find out and apply as soon as possible to prevent any delays to your project.

Renovation schedule

A detailed and realistic schedule for renovation works can help everything run smoothly, and prevent any delays.

A typical schedule may include the following stages:

• Stripping out the interiors
• Structural work
• Plumbing, heating and electrical wiring work
• Flooring and plastering
• Bathroom and kitchen fit outs
• Decoration, interior design and final touches.

Hiring the right contractors

Cowboy builders aren’t just a concern in the UK. Unfortunately, you’ll find them in other countries too.

To avoid sub-standard work, miscommunication and potentially getting ripped off, bear the following tips in mind:

• Hire a project manager you can trust to oversee the works
• Consider hiring a translator if you don’t speak the local language
• Be wary of tradespeople quoting super cheap prices, or asking for large payments upfront. It’s worth finding out what local customs are around commissioning and paying for building work, so you know what to expect.
• Use reliable word of mouth recommendations to find trusted contractors.

Property evaluations

Whatever else you do when researching a fixer-upper to buy, it’s essential to get some sort of building survey or inspection carried out. A property that you may think only needs a lick of paint could have serious structural issues or an insect infestation.

Insurance options

A key thing to check out before starting work is whether you may need indemnity or liability insurance for the works. Speak to a local solicitor or professional to find out how it works and what your obligations are.

Prepare for things to change

No renovation project runs exactly to plan, and amendments are completely normal. Schedules and prices can fluctuate, and your contractors may find something unexpected when they start stripping out the interior.

So, be prepared for change order fees (where you pay more to upgrade specifications or overcome a problem) or amendments to the original contract.

Fees and tax considerations

Just like with building a home, you may have to pay a number of fees and taxes when renovating a home abroad. These include:

• Overseas mortgage fees, such as arrangement/product fees and broker fees
• Stamp duty and property transfer taxes
• Real estate agent fees
• Application fees for planning permission and permits to renovate.

It’s worth researching whether you qualify for any exemptions. For example, when buying property in Ireland, you can write off the cost of renovations of your rental property over several years against your rental income, but only if the work is done by a builder who is registered for VAT (sales tax).

You’ll also need to work out the best way to make payments to another country from the UK, using solutions such as Wise to get the best exchange rates.

Should you carry out overseas renovation yourself?

If the renovations are relatively minor (i.e. painting and decorating) and you have the right DIY skills, there’s no reason you can’t carry out renovations on overseas property yourself. But for more significant improvements, it’s usually best to call in the experts.

What to do if something goes wrong

Unfortunately, sometimes things do go wrong when building or renovating property abroad.

If you’re involved in a dispute with a contractor or think you’ve been a victim of fraud, the first thing to do is consult a solicitor. They can advise you of your rights, and what action you can take.

You might also want to have a look at UK Government guidance for buying property abroad.

The UK’s Foreign, Commonwealth & Development Office (FCDO) can't get involved in private legal issues abroad, but has lots of resources including English-speaking lawyers, interpreters and translators.

How to pay for renovations and building property abroad

You’ll have lots of bills to pay when building or renovating property abroad, from planning permission application fees to contractor invoices.

Open a Wise account at the start of your project and you’ll be able to quickly and easily send money between the UK and your chosen country. This is a good way to keep currency exchange costs down, and make sure everyone gets paid on time.

There’s even dedicated support for large amount transfers, essential when you’re buying land or property, or paying large bills.

Your Wise account awaits 🌍

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Sources used:

1. Charles Stanley - A case study: buying a property abroad

Sources last checked on date: 16-Aug-2024