Should I Expat to Own a Home?

Housing costs are more expensive than ever, and forecasters don’t expect that to change anytime soon. Is an overseas move and life as an expatriate a more affordable option?

Just 38% of homes sold during the last three months of 2024 – including both new and existing homes – were affordable to families earning the national median income of $96,300, according to the National Association of Home Builders /Wells Fargo Housing Opportunity Index . That’s close to the lowest reading since NAHB began tracking affordability in 2012.

How can first-time homebuyers overcome the affordability challenge? Some of them are fleeing the country. According to American Express Travel’s 2023 Global Travel Trends Report , the majority of Gen Z and millennials (79%) consider leisure travel as an important budget priority.

Combine that zest for travel with despair about buying a house and it’s natural that an expatriate lifestyle–including owning property abroad–looks appealing. One big reason: home prices.

Should I Expat to Own a Home

“Typically, properties with similar quality construction, amenities, and setting in places like Panama City or Los Cabos are cheaper than their equivalents in New York, Miami, or San Diego,” says Ronan McMahon, editor and founder of Real Estate Trend Alert (RETA) and an expert on international living. 

“In Panama, you can buy two-bedroom beach condos for $300,000; a similar price would get you a two-bedroom condo in a central location in Playa del Carmen, Mexico. You can find affordable property in parts of Europe, especially if you look outside of capital cities. In Portugal, outside of Lisbon, Porto, and the Algarve, there are lots of smaller towns and villages where you can find affordable homes.”

But before you take off for your expat adventure, there are some financial and legal factors to consider.

Is It Really Cheaper to Buy Overseas?

As usual, the answer to whether it pays to expat to own a home is: It depends. First, you need to make comparisons across different currencies and property types to understand what you’re getting. What looks like a bargain may not be if it needs work or is too small.

“There are significant economic reasons why properties are cheaper in locations like Italy, Spain, and Portugal than in most major U.S. markets,” says Alex Ingrim, a financial advisor with global financial services firm Chase Buchanan based in Florence, Italy, who advises Americans about moving to Europe.

Most of all, salaries are lower, and fewer people can afford to become homeowners. For example, Ingrim says, the average salary in Portugal is less than €2,000 per month, and it’s less than €3,000 per month in Italy.

“An American looking to move abroad would need to have a U.S.-based job for these properties to remain cheap by comparison,” Ingrim says. “There are no jobs in most of these markets paying anywhere near what Americans are used to. Starting your career as an American abroad is extremely difficult—language barriers, different qualification systems, and much higher barriers to entry in good careers make it hard to have the same career path you would in the U.S.”

Just like in the U.S., you may face limited availability of homes to buy, especially in Europe, Ingrim says.

“Many Europeans buy a home once with a view to passing it on to their children—it’s not a matter of getting on the property ladder to then trade up,” he says. “As a result, there's very little volume in the market, meaning you can't expect to buy a starter home and then sell it for a profit later.”

Also, mortgages are far less common in most other countries.

“It’s very difficult to get a mortgage in most jurisdictions compared to the U.S., and when you can get a mortgage, the loan to value is more conservative than in the U.S.,” Ingrim says. “This means that young people need to save more to buy their first property than they would as a percent of the property value in the U.S.”

If you’re earning income in a foreign currency, many traditional banks won’t lend you money in your new country, he says.

“It took me almost a year to get a mortgage in Italy and it was just by the skin of my teeth,” Ingrim says. “I know very successful Americans in Florence who struggled to get a mortgage.”

Just like in the U.S., you may need to look outside your preferred area to find an affordable house, especially in countries trendy with expats such as Italy.

If you’re looking for an affordable place in Italy, you’ll likely need to stay away from popular destinations like Florence and Rome, says Marco Permunian, founder of Italian Citizenship Assistance, which specializes in Italian citizenship law and helping Americans purchase property in Italy.

“Piedmont in northwestern Italy, particularly in provinces like Biella and Alessandria, is gaining popularity for its affordable homes and accessibility to the northern cities,” Permunian says. “These areas are just an hour away from Turin and two hours from Milan and are also convenient for outdoor enthusiasts with the Alps nearby. For those preferring a more central location, the province of Viterbo in Lazio, about an hour from Rome, offers numerous affordable options and a growing expat community.”

McMahon recommends Costa Rica for young people who can work from anywhere.

“Costa Rica is ideal because of its proximity and accessibility—the country has two international airports with direct flights across North America,” McMahon says. “The weather is good—you can find all kinds of climates from cool and fresh to tropical beaches. There are good residency options, including a digital nomad visa, and a fantastic quality of life. Expats say they are healthier and happier there.”

Visas, Work Permits, and Other Pesky Details

Before you pack your bags, you need to be aware of the legalities of buying property and long-term residency in different countries. Sites such as International Living have resources on specific countries. Generally, Americans can buy homes in most of Latin America and Europe, McMahon says. The rules in many Asian countries are a little trickier.

To buy property in Italy, Americans need a valid U.S. passport and an Italian Tax Code that links their identity to the property in the real estate registry, Permunian says.

The bigger issues are residency status and the ability to work in another country.

“Depending on the country, you can often get temporary residence initially followed by permanent residence,” McMahon says. “Some countries offer fast track procedures for permanent residence.”

For example, McMahon explains:

  • In Mexico, you can get temporary residence, which is valid for up to four years, when you can convert it to permanent residence.
  • Costa Rica offers a digital nomad visa if you have a minimum income ($3,000 to $4,000 a month for a family, for example).
  • Panama offers a range of residence visas, from digital nomad status to investment visas (you qualify by buying a property or investing in a local bank CD) to residency for those starting a business in the country.
  • In Italy, Americans can only stay 90 days without a long-term visa.

“One option is a work visa, requiring a job offer from an Italian employer,” Permunian says. “Once the employer secures a work permit on your behalf, you can apply for the work visa at your local Italian consulate. Upon entering Italy with a valid long-term visa, it's essential to convert it into a residency permit at the local immigration office within eight days.”

It’s pretty rare to be given the right to work in another country, although digital nomad visas are becoming more common, Ingrim says.

“You can't just pick up and move and expect to be given the right to work,” he says. “Usually, you need a new driving license and need health insurance or a plan for health care, too.”

Hidden Costs and Savings of Living Abroad

Typically, medical insurance in Latin America is significantly lower in cost than in the U.S., McMahon says.

“Medical insurance is also usually lower cost in Europe than in the U.S., and in many European countries long-term residents can join the public healthcare system,” he says.

One of the obvious costs of moving overseas is the transportation to return home to the U.S. for visits or work, but there are other expenses that may be more or less compared to living in the U.S.

For example, when you buy a home in Italy, you’ll pay closing costs that range from 3% to 5% of the property value, notary fees of 2,000 to 4,000 euros, and property registration taxes, Permunian says. You’ll also pay property taxes. Other countries have similar costs when buying a home.

“Property taxes are typically low in Latin America,” McMahon says. “For example, in Panama, on a primary home, there’s no tax payable on a property whose registered value is up to $120,000, and once it’s over that but under $700,000, the annual property tax is 0.5%.”

Homeowner’s insurance is also significantly lower in cost in Latin America compared to the U.S., McMahon says.

Another issue to consider is transportation, Permunian says. If you need a car, that can be a considerable expense in other countries.

“In larger towns and cities, public transport is available and low cost,” McMahon says. “In parts of Spain, Portugal, and France for example, the bus and train networks are excellent. Panama City has low taxi fares and a modern metro. Medellin’s public transport is very good, and Playa del Carmen is a very walkable city with taxis and buses available at low cost.”

Before committing to moving abroad, you may want to talk to a tax advisor or financial advisor about the tax implications of owning property overseas and look into basic financial transactions such as getting paid and paying bills. But for people who have lived overseas for years, such as McMahon, ditching the U.S. to relocate is a no-brainer.

“If I were a young American today, I’d 100% be looking to buy property overseas, whether that's a forever home or an investment, because house prices in the U.S. are at record highs and you can get ‘like for like’ for half price in many places overseas,” McMahon says.

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