Buying A Second Home AbroadWith the current real estate market, it might seem too difficult to own a home, let alone two. Yet, this hasnt stopped many adventurous homeowners from doing just that. The benefits of being able to live abroad for a weekend, a month, or even a few months to a year, plus a potential cash flow from renters are major draws for homeowners across the country. At the same time, taxes for ownership and maintenance of this second property might serve as deterrents for the vacation home of your dreams. So, which countries are the best for vacation homes in this economy? Here are our top five:
1. The CaribbeanThough it is composed of many individual countries, the Caribbean as a whole is a great place to buy a vacation home. On top of the amazing weather for a majority of the year, many of these islands do not have income taxes. Property taxes for the islands are also reasonable. In the Bahamas, for example, theproperty tax is one to two percent of the assessed value of the property. In addition, some of the countries in the Caribbean are US territories, making filing taxes much easier. Puerto Rico and the U.S. Virgin Islands are both US territories, and filing taxes for these countries is made all the easier because of their position as a territory.
2. IndiaWith vibrant cultures panning across the country, this warm vacation getaway is also the perfect place to buy a second home. India has a Total Tax Index (TTI) of 49.7, meaning that the total tax cost is half of the United States'. Though the property tax is somewhat unpredictableit varies not only by state, but also by municipalitythe housing market is very affordable, costing only 17 percent the amount it costs to live in New York City. Even better, India is developing at an alarming rate, so a real estate investment in India is a good choice. With one of the fastest growing economies in the world, India is becoming a leading competitor in the technology industry. Though it was once the center of outsourcing IT phone calls, the tech hub is now churning out smartphone apps, computer applications, scientific discoveries, and much more. Its no surprise, then, that the overall cost of living is going up. If youre interested in a second home in India, now is the time to buy.
3. SwitzerlandThough the price of housing is high and continues to go up in this popular European destination, the property tax is still a low .3 to .5 percent, making a Swiss home a very good purchase. On top of the low taxes, Switzerlands economy offers additional benefits, like a laissez-faire (let it be) foreign investment policy, which allows foreign investors to put money into Swiss companies for larger returns than areas with greater taxes. Because Swiss homes are in such high demand, another advantage to buying a home there is being able to rent it out for tourism. With the tourism balance of payments going up incrementally, the likelihood of you renting out your future abode is increasing by the year. This is especially true of Switzerlands big cities, like Zurich and Geneva.
4. New ZealandThere is really only one thing that needs to be said about New Zealands tax system: no real estate taxes. The only taxes you will be paying on your vacation property in New Zealand are taxes to local authorities, which use the money to improve the infrastructure and quality of life. Better yet, the cost of living in New Zealand is over 25 percent less than the cost of living in New York City. But the advantages of living in New Zealand dont end there. On top of being breathtakingly beautiful (if you need any convincing, just watch Lord of the Rings), New Zealand has an inflation rate comparable to the United States. This means that the New Zealand economy is relatively stable. In fact, New Zealand was number one on Forbes Best Countries for Business 2012 because of its economic stability and transparency.
SEE ALSO: 5 Best States to Own a Home