From a beachfront villa in the Caribbean, to modern pied-à-terres in European capitals, a diversified real estate portfolio can offer unparalleled lifestyle flexibility and strategic investment opportunities. But the reality of international property ownership is often far more complex. Each property is subject to a unique regulatory environment, tax exposure and compliance requirements. Left unmanaged, these factors can drain your capital, lower returns, and lead to costly legal or tax issues.
The true cost of owning global property is more than just the purchase price. It’s the ongoing responsibility of managing risk, tax efficiency, compliance, and governance across multiple, different legal systems. Not sure where to start? Discover all the hidden costs that can come with owning global property, and the practical steps you can take to protect and preserve your wealth.
When luxury meets complexity
Owning homes around the world offers more than just comfort or convenience – it promises access, lifestyle diversification, and asset stability. A villa in rural Tuscany, a ski chalet in the Swiss Alps, or an upbeat Manhattan apartment can give you the flexibility and mobility to live where and how you choose, while preserving wealth in tangible, appreciating assets.
However, it’s important to recognise that each jurisdiction brings its own complexities, from tax codes and ownership laws, to maintenance standards and reporting obligations. What begins as a portfolio of lifestyle investments can turn into a tangled network of legal and financial risks.
The true challenge lies not in acquiring these properties, but in managing them with the same care as any other investment. But with smart, centralised management, you can stay ahead of these challenges and keep them under control.
Common hidden costs and risks
Owning properties around the world exposes you to numerous often overlooked costs and risks. Understanding these is essential to preserve your wealth and ensure simple, stress-free management.
Local taxation and regulatory differences
Each country has its own rules on property ownership, taxation, and reporting. Property taxes vary widely, while some jurisdictions impose wealth or inheritance taxes that can catch you out if you’re not prepared. For example, France’s real estate tax Impôt sur la Fortune Immobilière (IFI) applies to real estate assets valued at €1.3m, while US estate tax still applies to non-residents. Without expert guidance, you may risk overpaying taxes or facing costly penalties.
Maintenance, staffing, and security
The upkeep costs of your properties can not only be substantial, but also unpredictable. Remote or seasonal properties require regular maintenance, landscaping, and repairs, often at premium rates. Let’s say you own property in the States. You could use the square footage rule, which involves setting aside $1 per square foot of the property towards annual maintenance costs. For example, a 2,500-square-foot home would need about $2,500 set aside for maintenance using this approach.
You’ll also need to factor in the costs of employing local staff, whether housekeeping, groundskeeping, or security, which introduces additional legal compliance, payroll and management obligations.
If you own property in politically unstable or disaster-prone regions, you’ll likely require enhanced security measures and specialised insurance – both of which can significantly increase your outgoings.
Currency and banking complexities
Owning international property means you’ll be exposed to currency fluctuations that can impact both your expenses and income. Rental revenue, loan repayments, and maintenance costs denominated in foreign currencies can vary significantly with exchange rates, affecting overall returns. Also, moving money across borders and dealing with different banking systems can add administrative burdens and potential compliance risks.
Legal and inheritance challenges
Inheritance laws can differ significantly by country. Some jurisdictions apply ‘forced heirship’ laws, which restrict how you can allocate your assets after death. Without careful planning, this can lead to legal disputes and costly, inefficient estate transfers. Structuring ownership through trusts, foundations, or corporate entities requires expert legal advice specific to each country’s laws.
By recognising and addressing these hidden costs early, you can safeguard your investments, avoid surprises, and maintain the true value of your global property portfolio.
Philip White, president and CEO of Sotheby’s International Realty, says: “When clients own multiple properties internationally, we see three main financial considerations come up consistently: currency fluctuations can significantly impact your carrying costs and returns, tax obligations become quite complex when you’re dealing with different jurisdictions, and the practical challenge of managing properties across time zones and legal systems. Our real estate advisors help clients understand the local property markets, but we always emphasise the importance of working with specialised local professionals (tax advisors, attorneys, and property managers) who understand the regulatory nuances that, if overlooked, can erode returns.”
Strategic management tips to stay ahead
Build an advisory network: Reach out to legal, tax, and property professionals in each jurisdiction who understand local ownership, reporting, and compliance rules. Use a central advisor, like a family office, to make sure all decisions are aligned.
Use the right ownership structures: Whether personal, corporate, trust-based, or foundation-held, make sure your ownership structures align with the property’s jurisdiction, intended use, and long-term succession plans. The right structure can mitigate tax exposure and legal risk.
Centralise oversight and reporting: Use centralised platforms to track costs, income, tax filings, occupancy, and performance. A digital dashboard can bring clarity and agility, especially in changing regulatory environments.
Stay ahead of regulation: Global tax and property laws can often change. Schedule regular reviews with your advisors to monitor shifts in regulation, cross-border reporting and treaty changes that may affect your holdings.
Treat your properties like a business unit: Apply the same financial discipline to lifestyle properties as you would to any other investment. Set clear budgets, evaluate ROI, monitor risk, and align with your personal and financial goals.
To protect your wealth and avoid unnecessary risk, try to think of your properties as a single global portfolio, rather than separate assets. With the right strategy, structure, and expert support, your homes can enhance your lifestyle and secure your legacy – without compromising your finances.
Read more: The most lucrative tech sectors for private investors