Thinking of emigrating overseas? Before you make your decision on whether to move abroad or not it’s a good idea to consider all the costs associated with doing so. Looking at all the costs helps you decide on where to move and whether you have enough income to live comfortably.
Understanding what you’ll need to pay for and what payment method you can use also allows you to reduce the overall cost of your move, meaning you can get more out of your new home.
We’ve put together this guide on some key costs you’ll need to pay, and how you can prevent yourself overpaying and how you can even reduce some of them.
The biggest financial cost of becoming an expat is of course the cost of buying or renting property. The cost of property varies massively from country to country and you should take this into account when choosing where to relocate.
If you still haven’t decided on where to relocate, check out the FairFX Property Abroad Cost Calculator to get your bearings on the property prices in over 30 popular expat destinations.
Another important factor to consider with property is whether you will be paying with cash or through a mortgage. Having enough cash is a great advantage as requiring a mortgage can reduce your chances in a bidding war and can be difficult to obtain if you aren’t a permanent resident.
UK banks with a global presence may be able to assist you but local providers will normally offer better rates. It’s a good idea to research your mortgage options before you leave the UK.
2. Money transfers
However you decide to buy your new home abroad, you’ll need to send money from your UK account to your new home, whether that’s to pay for your property, pay a local representative, or just for day-to-day spending once you’ve arrived.
Don’t just default to your bank for these transfers as they have some of the highest transaction fees and poorest rates for international money transfers. Shop around for a provider and compare the fees being charged as well as the rate you’re getting.
On the FairFX website we display the true rate that you’d get if you’d make your transfer there and then – no hidden fees or charges. Plus, with our new Buy & Hold feature you can buy currency and add it to your FairFX account every time the pound is having a good day and leave sending the money until a later date.
“How does that help me?” Here is a quick rundown on how it works.
Yes, sadly, there will be taxes to pay. If you’re selling a house in the UK it’s likely that you’ll have to pay tax on your capital gains, and the same can be said for any rental income if you decide to let out your home. Check the government website to understand the tax implications in more detail.
You’ll also need to pay local taxes on your new home, and if you are resident rather than a citizen your taxes could be higher. As well as this there will likely be local council taxes and various other levies.
To make sure you aren’t paying over the odds, consult local government websites or get professional advice on your obligations.
4. Running costs
Another cost to consider when you’re moving abroad is the money needed to maintain your new home, and your normal day to day utilities and essentials.
Annual maintenance and repairs typically represent between 1-4% of a home’s value, depending on whether you need to carry out any renovation projects and the local climate of course.
To help you get a better understanding on the cost of living in a new country, such as the cost of a car, utilities, and groceries, you can use our Property Abroad Cost Calculator for comparison. You can also get a little extra detail afterwards by heading to sites such as Numbeo.
Need currency to cover these essentials when you first arrive? Order a FairFX Currency Card and use it to pay retailers, contractors and suppliers with ease.
You will of course also want to keep your property and belongings secure in your new home.
Insurance is another cost that can vary widely from country to country and requirements are approached differently in each country too.
Countries more prone to earthquakes for example might require you to get home insurance which covers earthquake damage before you can even get your gas and electricity connected.
There are some UK firms that will enable you to sort your insurance before you travel but will inevitably charge you more than if you are to opt for a local provider. It’s a good idea to do your research before you buy a property so that you know the costs of insuring your home in that area of the world.
6. Visa costs
A small but important cost to remember when becoming an expat is the cost of applying for residency and citizenship. This will no doubt entail an administration fee along with any fees for background checks, passports or other official documents. Many people also consider the help of an agency when completing their applications, but this will of course add an extra cost to your move.
Still making a decision on where to move? The FairFX Property Abroad Cost Calculator is designed to make it easier for you to compare the costs associated with buying a new home abroad, to help you narrow down your search on where you would like to buy.
Looking to transfer money overseas fee-free with great exchange rates? Send money to and from your new home hassle-free with FairFX Money Transfers.