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Overseas Property Investors Being Fined Under New Spanish Legislation

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Property investors in Spain who are not registered within their relevant local tourism authority and let holiday properties to tourists could face fines of up to €30,000 under new legislation.

The Spanish authorities are carrying out thoroughly inspections, inspecting paperwork and even examining websites in an attempt to eradicate what they regard as unregistered letting.

Some cases were even reported by Spanish neighbours, namely holiday properties in the Balearic Islands and on the Andalucía coast.

A large number of overseas property investors declared they bought their second homes for personal use, though, after advertising their Spanish properties on the internet for holiday rental were fully booked for most of the year, generating an average of €1,400 per week extra income.

The law clearly underlines that if a property is let primarily to tourists, should be registered for holiday rentals.

A property consultant based in Ibiza, Gary Davidson, said:

Given the fact that buy-to-let mortgages are more readily available nowadays, many expatriates have been seduced into investing in property in Spain with rental income from holidaymakers paying their mortgage and providing them with an additional income.

Despite this, most overseas property investors in Spain don’t know that they require licensing from the local tourist authorities to rent their property to tourists until they’re hit with legal action.

Popularity: 100%

Overseas Property: Cyprus

Travel experts say that attracts a considerable number of British holidaymakers every year. According to the travel agent Thomas Cook Cyprus is proving to be as popular as ever.

Cyprus is continuing to attract a considerable number of people from the UK each year, Thomas Cook revealed.
The average property prices in Europe have risen around 20% per year. For anyone considering investing in overseas property, Cyprus would be a good option. By investing in buy to let oversea property in Cyprus you’ll almost certainly watch your investment grow.

The relatively low cost of living in Cyprus is without doubt a positive advantage which continues attracting British tourists every year, securing your potential rental income.

Recent statistics pointed to Cyprus as being one of the most inexpensive countries in Europe, fuelling a better quality of life and marking the Mediterranean hot spot as an all year round holiday favourite.

New property developments are being built in northern Cyprus with two bedroom properties the most advisable for the rental market.

Look out for well appointed apartments close to amenities and with pool and parking to maximise short and long term let potential.

Popularity: 33%

Bulgaria Reported Top Property Market

Bulgaria was reported as the best performing property market; in the spite of concerns over the level of oversupply of Bulgaria holiday properties, and the skepticism of many property investors. Bulgaria’s property prices rocketed 30.6 percent last year outperforming the rest of Europe.

On the whole, property prices growth is slowing down globally. An 8.2 per cent increase in 2007 compared to 9.6 per cent in 2006.

With the property market in the UK sliding so dramatically over the last few years to what it has become today, many developers, investors and indeed those looking for a first time buy are heading into Europe, where there are areas that are still seeing a rise in property values. Property in Bulgaria is increasing in value all of the time, meaning that it’s much better for investors to look at as a viable means. You can literally pick up properties in Bulgaria for just a few thousand pounds, and be sure that their value will increase. This is in stark contrast to property in the UK, where values are predicted to fall further at least until the end of the year.

If you’re looking for a property investment opportunity, you’re likely to find it in Bulgaria.

Popularity: 38%

Overseas Property Investment in Portugal

Being Portuguese myself, it’s obvious that my heart still lies there even after living in the UK for almost 10 years. Portugal has a lot offer for property investors, the Algarve may have been the pioneer region which attracted many European property buyers but investors are now looking everywhere, from Lisbon (perhaps the most underrated capital in Europe) to Porto, going though to the beautiful inland areas in the hot plains of the Alentejo or the North Western green valleys of the win

e-producing Minho region.

The Portuguese vast Atlantic coastline attracts thousands of holidaymakers every year since the 1960s. Presently, about 50,000 British live there all year round and almost 150,000 own a Portuguese holiday home.
The best of all is that is only a couple of hours flying from London.

The property buying process

A fiscal number from the local tax office is needed as well as a Portuguese postal address.

You should also ensure that the seller has no outstanding debts on the property as well as carrying out full checks on title deeds. We also advise you to ensure that the property has a certificate of habitation and it’s not property owned by an offshore company. In the past was a lucrative way for foreign owners avoiding some taxes, but some laws have been put in place in 2004 which made this detrimental financially. You should find an experienced Portuguese speaking lawyer to get these tasks done for you.

You are required to pay a non-refundable deposit of approximately 10 per cent after signing a preliminary contract - “Contrato Promesa de Compra e Venda” – which is verified by a government notary. The escritura or final deed must be signed in the presence of the notary, and all involved costs and taxes must be cleared at this point, concluding the buying process.

Property buying costs

The costs involved to buy a property in Portugal are typically 10 per cent higher than in the UK, which includes:

• 2 per cent notary fees.
• Lawyer fees will set you back between 1.5 to 2 per cent.
• IMT or property transfer tax is between 0 for properties under €80,000 and goes up to 6 per cent depending on the property’s price.
• If you need to take a mortgage from a Portuguese bank or building society, expect arrangement and registration fees of approximately 2 per cent.

Property running costs and taxes in Portugal

In Portugal the annual property tax for owners is about 0.7 per cent, based on the actual property value determined by the government as well as an additional yearly fee of 0.7 per cent rate for the local authorities.
The VAT rate in Portugal is 19 per cent. Property transferred to directly family is free of inheritance tax. Nevertheless if you are a UK taxpayer you will still have to pay inheritance tax in the UK. Regular transfers are taxed at 10 per cent in Portugal.

The Portuguese legal system considers residents those who spend more than 183 days in a year in Portugal. Portuguese resident are taxed based on their worldwide income, whereas non-residents only pay tax from income generated in Portugal. Capital gains tax is taxed at 25 per cent for non-residents.

Popularity: 26%

Investing in Spanish Overseas Property

For the serious property investor, any property is a potential money making opportunity. With the current world stock’s instability and fluctuating interest rates, the property market still remains an excellent option for investment. The UK property market is great for those who can afford to invest and allow it to mature before seeing any dividends. But for those of you who possibly have extra funds in the bank, overseas property investments are potentially better than UK property investment.

Spain is indeed a great option for serious property investors. There’s a lot of potential, great holiday destinations, stunning scenery and attractions.

On top of the great investment buying a property in Spain is, it is also a enjoyable opportunity for the overseas property investor to enjoy their holdings. Many Spanish locations make spectacular holiday locations, and when you’re not using it, you can rent out to other holiday makers which will help you pay for the investment.

Popularity: 33%

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