Using an overseas mortgage to buy overseas property

Many people are looking further afield to generate good long term capital growth on property investments. Eastern Europe, Dubai, and Cyprus have seen a significant influx of UK investors looking to cash in on the forecast growth in property values. Many of these investors will be purchasing these properties with some form of debt, and usually a long term mortgage. It was traditional advice to match debt with the asset, so long term debt for an asset likely to be held for a number of years generally makes sense. In tax terms it can also be advantegous as a UK tax deduction can be obtained for interest on the debt. In addition, given the flexible financing packages available, obtaining a mortgage from an overseas lender is becoming more common. When considering using an overseas mortgage, there are certainly tax advantages available (not least the tax deduction for the interest) but there are a number of pitfalls that should be considered. This article Using an Overseas mortgage to acquire property overseas goes through the tax disadvantages to watch out for.