Selling property abroad: timeline and pitfalls

Selling is the part of property ownership that investors plan least. Our short guide on how to sell property abroad covers the basics. This article goes deeper into the sequence and the places where sales from a distance most often go wrong. The stages and the order differ by country, and the text is informational, not legal or tax advice.

Step 1: Decide the goal and the deadline

Before you contact anyone, decide what matters: the highest price, the fastest sale, or a clean exit with the tax position under control. A forced deadline (a loan, a visa, a tax date) weakens your negotiating position, so start early. Ask a local lawyer for the typical length of a sale in your market and plan for the worst case, not the average. We do not quote timelines for specific countries here because we could not verify them from official sources.

Step 2: Pricing and valuation

An asking price should come from comparable sales, not from what you paid or what you would like to receive.

• Ask two or three local agents for a written market opinion with the comparables they used. A very high estimate may be an attempt to win the listing.
• Compare asking prices with closed prices where the country publishes them (land registry or notary statistics); asking prices often exceed what is paid.
• Consider an independent valuation if a bank, a tax office or a co-owner will need one.
• Remember that the currency matters. If you bought in one currency and your bills are in another, the result of the sale is the net amount in your own currency, after fees and taxes.
• Keep a record of purchase costs and improvements with invoices, since many countries use them to compute the taxable gain. See taxes when selling property abroad as a non-resident.

Step 3: Choosing an agent abroad

• Check the licence. In many countries agents must be registered, and an unregistered agent may not be entitled to a commission.
• Ask whether the mandate is exclusive, how long it runs, what the commission is and who pays it (the seller, the buyer or both), and what happens if you find a buyer yourself. Commission levels vary and we do not quote them.
• Ask how they market a property to foreign buyers, in which languages, and with which photos.
• Ask for references you can call, and ask how deposits are held (see below).
• Do not hand an agent a general power of attorney. If you grant a power of attorney, make it narrow (sell this property, to be signed before a notary, up to a minimum price) and limited in time. See remote signing and closing.

Step 4: Preparing documents

A sale stalls most often over missing paperwork, so collect it before listing. Typical documents, with names and details varying by country:

• proof of ownership (title deed, land registry extract) and your identity documents,
• an energy performance certificate. Under the recast EU Energy Performance of Buildings Directive, a digital certificate is to be issued when a building is sold, and the rating must be shown in sales and rental advertisements, so expect to need one in EU countries; national deadlines and procedures differ. See the directive,
• proof that there are no debts on the property: no mortgage or registered charges, no unpaid property tax or utility arrears,
• a statement from the owners' association or building administration that the community fees are paid, and any decisions on future works or special levies,
• building permits, plans, completion certificates and, where relevant, a licence for rental use,
• a tax identification number, and the documents needed to explain how the property was bought and paid for.

Order these early, since certificates from authorities have an expiry date and some take weeks. Arrange a notary or lawyer to check the title, which is also something the buyer will do.

Step 5: What the buyer's due diligence will look for

Expect the buyer's lawyer to check title, charges, planning compliance, debts and, in some countries, rights of pre-emption of tenants or neighbours. Problems you know about should be disclosed and fixed before listing. An unregistered extension, a missing permit or an unresolved dispute with the owners' association can reduce the price or end the sale. If you are selling to a foreign buyer, expect additional identity and source-of-funds checks by the notary or lawyer; these are lawful compliance steps and should be answered fully.

Step 6: Reservation, deposit and contract stages

Many countries use two steps: a preliminary contract with a deposit, then the final deed signed before a notary (or registered with an authority) and a transfer of title. The names and legal effects differ, and in some countries a deposit or a failed sale has different consequences for each party. In general:

• Read the preliminary agreement before you sign it. Check the price, the date of the final deed, the penalties if either side withdraws and the conditions (for example, financing).
• Make sure the deposit is held by a notary, a lawyer's client account or an escrow, not by the agent's personal account.
• Appoint a local lawyer on your side. The cost is small compared with the property price.
• If you cannot attend, a notarised power of attorney or remote signing may be possible. Check what the local notary accepts.
• Plan the handover: keys, meter readings, utility contracts and the final inventory of any furniture included.

Step 7: Taxes and where to settle them

A sale can create tax duties in two places: the country where the property is, and the country where you are tax resident. Typical issues are capital gains tax on the difference between sale and purchase price (with country-specific rules for exemptions, holding periods and non-residents), local transfer or registration taxes, withholding by the notary in some countries, and reporting in your home country. Rules, rates and deadlines change; we do not state them in general. Check the country guides to capital gains for Spain, Portugal, France, Greece, Italy, Cyprus and Bulgaria, and for Polish residents tax on foreign rental income. Ask your tax adviser in the country where you live, and one in the country of the property, before you sign.

Step 8: Repatriating the proceeds

Plan how the money will reach you. Typical points: payment from the buyer to the notary's or lawyer's account or directly to yours, bank checks on large incoming transfers, the documents that prove the sale (the deed, the tax payment), the cost of currency conversion and any limits on moving money out of the country. Keep the papers that show the source of the funds, because your home bank may ask later. See bank questions when moving large sums and sending money abroad. If the proceeds have to be reported or taxed at home, put the tax amount aside before you spend the rest.

Common pitfalls

• Pricing from what you paid, not from the market.
• Signing an exclusive mandate with a long term and a penalty for ending it.
• Paying a deposit or letting an agent hold it in a personal account.
• Missing a certificate that has expired when the notary date arrives.
• Forgetting arrears of community fees or utility bills that become the buyer's problem and then yours.
• Ignoring tax in the country of residence.
• Relying on a general power of attorney without a time limit.

FAQ

How long does a sale take? It depends on the country, the property and how complete your documents are. Ask a local lawyer for a realistic range, and add time for tax and money transfer steps.

Do I need to travel to sell? Often not, if you grant a narrow notarised power of attorney or the notary accepts remote signing, but check what is allowed.

Who pays the agent? It depends on the country and on the mandate: the seller, the buyer or both. Agree it in writing before you list.

Can I lose the deposit? Depending on the preliminary contract and the country, a party that withdraws can lose or double a deposit. Read the clause carefully and get a local lawyer's view.

Where do I pay tax on the gain? Possibly in both the country of the property and the country where you are resident, with relief for tax already paid under a treaty. Ask advisers in both before signing.

How we help

D.H. Realting is a trilingual platform that finds properties and coordinates independent local lawyers and tax advisers. We can introduce you to local agents and lawyers for a sale and help organise the documents in your language. This article is informational and is not legal, tax or investment advice; rules change, so verify the current rules with a local professional before you act.