The study found 1.2 million people owned a property overseas, with the number of properties having risen from 102,000 in 1995 to an estimated 300,000 in 2006. It showed 40 per cent of respondents cited investment purposes as the main reason for their purchase.
The typical owner was identified as either a pensioner with their main residence abroad or an affluent person above the age of 45, owning a second home overseas as an investment or holiday home. It was estimated that by 2025, the number of Britons living in foreign countries could total around 1.3 million.
Despite indications of a buoyant overseas market, Mike Warburton, senior tax partner at Grant Thornton, warned: “Purchasing a property abroad has important tax implications. You are subject to tax on your offshore income and capital gains if you are a UK resident and domiciled. And, if the UK tax system is not complicated enough, the purchaser of a property abroad has to cope with a local tax system that may be culturally dissimilar to our own.”
The research also suggested that an increase in demand was dependent on the UK property market and the wealth it generated.
Simon Conn, managing director of Conti Financial Services, commented: “We’re finding a lot of increased interest, but I don’t think it’s just the market here that affects demand. Lower interest rates, cheaper flights, increased awareness and the potential of a better quality of life abroad are all factors.”
