Spannish Properties
27 December 2007, 07:32 PM
#1
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Spannish Properties
Does anyone on here own a spannish holiday home, we are currently reviewing buying one some time in the new year and was wondering if anyone could offer us some experience based on what they know and done etc.
All advice welcomed as it all helps
All advice welcomed as it all helps
27 December 2007, 10:01 PM
#3
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I own a place in Spain.
I suggest some property owners forums, such as Eye on Spain and Lay my hat.com.
Lots of useful info on those. There are lots of scare stories out there too, so don't be put off, just do your research, use your head, try and go by recommendations, all the usual stuff when doing something new and risky - that involves lots of money.
Good luck!
Asif
I suggest some property owners forums, such as Eye on Spain and Lay my hat.com.
Lots of useful info on those. There are lots of scare stories out there too, so don't be put off, just do your research, use your head, try and go by recommendations, all the usual stuff when doing something new and risky - that involves lots of money.
Good luck!
Asif
27 December 2007, 10:28 PM
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Also bear in mind if you buy a place in Spain (or anywhere in europe) and rent it out during course of the year whilst you are not using it, it will have tax implications (sorry but I'm saying this with my accountant hat on!) i.e. classed as Rental Income which you will need to declare on your annual tax return. However, the good side is if you are smart enough then you could offset your loan interest and other allowable related expenses against your income to minimise tax payable 
As Euribor is still cheaper than LIBOR the cost of borrowing will tend to be cheaper in Spain.
I would agree with Asif's comment above - some good advice/recommendation from him.
As Euribor is still cheaper than LIBOR the cost of borrowing will tend to be cheaper in Spain.
I would agree with Asif's comment above - some good advice/recommendation from him.
Last edited by JP4; 27 December 2007 at 10:32 PM.
27 December 2007, 11:16 PM
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JP4,
Is it true that having a foreign property but as a holiday let exempts you from CGT?
My accountant suggested this to me, but to be honest we have not got to that level of detail yet.
Asif
Is it true that having a foreign property but as a holiday let exempts you from CGT?
My accountant suggested this to me, but to be honest we have not got to that level of detail yet.
Asif
27 December 2007, 11:31 PM
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Income Tax and CGT are two different animals so do not get confused on these. Generally, CGT arises upon a sale of an asset i.e. second house, shares where you sell something for more than the intital purchase price etc...whereas IT is attracted on income earned (whether these be in the UK or offshore i.e. rental income). There is relief available on on holiday lets on meeting certain criteria but 
I do not think it will totally exempt you from paying CGT in the end. Check out the below which will give you a good flavour......
HM Revenue & Customs: IR20 - Residents and non-residents
Tax on rental income - an overview : Directgov - Money, tax and benefits
Hope this helps?
I do not think it will totally exempt you from paying CGT in the end. Check out the below which will give you a good flavour...... HM Revenue & Customs: IR20 - Residents and non-residents
Tax on rental income - an overview : Directgov - Money, tax and benefits
Hope this helps?
28 December 2007, 12:05 AM
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Income Tax and CGT are two different animals so do not get confused on these. Generally, CGT arises upon a sale of an asset i.e. second house, shares where you sell something for more than the intital purchase price etc...whereas IT is attracted on income earned (whether these be in the UK or offshore i.e. rental income). There is relief available on on holiday lets on meeting certain criteria but I do not think it will totally exempt you from paying CGT in the end. Check out the below which will give you a good flavour......
HM Revenue & Customs: IR20 - Residents and non-residents
Tax on rental income - an overview : Directgov - Money, tax and benefits
Hope this helps?
I do not think it will totally exempt you from paying CGT in the end. Check out the below which will give you a good flavour...... HM Revenue & Customs: IR20 - Residents and non-residents
Tax on rental income - an overview : Directgov - Money, tax and benefits
Hope this helps?
I will have a read.
Cheers.
Asif
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28 December 2007, 11:50 AM
#8
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Absolutely not true. Prices have at worst stabilised and not moved much for the last 6 months or so and new developments have taken a bit of a hit as they tend to sell offplan and the investors just aren't there (so the developers are starting to offer quite large cash back schemes instead). My tip is to buy in the next 6 months. Come June/July prices will start to move upwards again but there may be a bit of panic selling before next summers tourists arrive, and as others have pointed out, the cost of borrowing in mainland Europe is cheaper than the UK (and banks WILL negotiate with costs and interest rates - NEVER take what you are given at face value in Spain).
A few things: allow at least 10% of the cost of the property in costs and taxes, don't buy if you expect to sell within 2 or 3 years, know the area well - go visit at least half a dozen times beforehand at different times and hire your own appointed Solitor - note NOT a Gestor, which is the general trend in Spain. We hired a solitor recently on what looked like a routine purchase and thanks to his extra efforts which a Gestor would never have done, we found the property we were buying was missing an original licence from 20 years ago.
Note: we bought our first place in Andalucia 2.5 years ago and sold this winter for a 55% profit, albeit with a bit of hardwork. Prices in many areas are still rising but if buying in the south avoid the West of Malaga (Marbella, Estepona, Benalmadena etc) unless purchasing as a holiday let income generator. Best bargains are (IMHO) Tarifa way at Costa De La Luz and Costa Tropical - La Herradura and Almunecar. We are looking to buy again at Torrox Costa near to where a new marina and golf course are being built and in an area which is still very unspoilt yet right on the sea. Investigating an area before an investment is a tip which I can't iterate enough...I've seen so many Brits go back home or sold up because they bought badly...
R
A few things: allow at least 10% of the cost of the property in costs and taxes, don't buy if you expect to sell within 2 or 3 years, know the area well - go visit at least half a dozen times beforehand at different times and hire your own appointed Solitor - note NOT a Gestor, which is the general trend in Spain. We hired a solitor recently on what looked like a routine purchase and thanks to his extra efforts which a Gestor would never have done, we found the property we were buying was missing an original licence from 20 years ago.
Note: we bought our first place in Andalucia 2.5 years ago and sold this winter for a 55% profit, albeit with a bit of hardwork. Prices in many areas are still rising but if buying in the south avoid the West of Malaga (Marbella, Estepona, Benalmadena etc) unless purchasing as a holiday let income generator. Best bargains are (IMHO) Tarifa way at Costa De La Luz and Costa Tropical - La Herradura and Almunecar. We are looking to buy again at Torrox Costa near to where a new marina and golf course are being built and in an area which is still very unspoilt yet right on the sea. Investigating an area before an investment is a tip which I can't iterate enough...I've seen so many Brits go back home or sold up because they bought badly...
R
28 December 2007, 02:03 PM
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Great pieces of advice, many thanks for all your inputs, we are still researching our options, I do think we will be looking inland as not too fused about rental incomes as the property will form part of future plans
29 December 2007, 04:41 PM
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Absolutely not true. Prices have at worst stabilised and not moved much for the last 6 months or so and new developments have taken a bit of a hit as they tend to sell offplan and the investors just aren't there (so the developers are starting to offer quite large cash back schemes instead). My tip is to buy in the next 6 months. Come June/July prices will start to move upwards again but there may be a bit of panic selling before next summers tourists arrive, and as others have pointed out, the cost of borrowing in mainland Europe is cheaper than the UK (and banks WILL negotiate with costs and interest rates - NEVER take what you are given at face value in Spain).
A few things: allow at least 10% of the cost of the property in costs and taxes, don't buy if you expect to sell within 2 or 3 years, know the area well - go visit at least half a dozen times beforehand at different times and hire your own appointed Solitor - note NOT a Gestor, which is the general trend in Spain. We hired a solitor recently on what looked like a routine purchase and thanks to his extra efforts which a Gestor would never have done, we found the property we were buying was missing an original licence from 20 years ago.
Note: we bought our first place in Andalucia 2.5 years ago and sold this winter for a 55% profit, albeit with a bit of hardwork. Prices in many areas are still rising but if buying in the south avoid the West of Malaga (Marbella, Estepona, Benalmadena etc) unless purchasing as a holiday let income generator. Best bargains are (IMHO) Tarifa way at Costa De La Luz and Costa Tropical - La Herradura and Almunecar. We are looking to buy again at Torrox Costa near to where a new marina and golf course are being built and in an area which is still very unspoilt yet right on the sea. Investigating an area before an investment is a tip which I can't iterate enough...I've seen so many Brits go back home or sold up because they bought badly...
R
A few things: allow at least 10% of the cost of the property in costs and taxes, don't buy if you expect to sell within 2 or 3 years, know the area well - go visit at least half a dozen times beforehand at different times and hire your own appointed Solitor - note NOT a Gestor, which is the general trend in Spain. We hired a solitor recently on what looked like a routine purchase and thanks to his extra efforts which a Gestor would never have done, we found the property we were buying was missing an original licence from 20 years ago.
Note: we bought our first place in Andalucia 2.5 years ago and sold this winter for a 55% profit, albeit with a bit of hardwork. Prices in many areas are still rising but if buying in the south avoid the West of Malaga (Marbella, Estepona, Benalmadena etc) unless purchasing as a holiday let income generator. Best bargains are (IMHO) Tarifa way at Costa De La Luz and Costa Tropical - La Herradura and Almunecar. We are looking to buy again at Torrox Costa near to where a new marina and golf course are being built and in an area which is still very unspoilt yet right on the sea. Investigating an area before an investment is a tip which I can't iterate enough...I've seen so many Brits go back home or sold up because they bought badly...
R
29 December 2007, 04:41 PM
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Absolutely not true. Prices have at worst stabilised and not moved much for the last 6 months or so and new developments have taken a bit of a hit as they tend to sell offplan and the investors just aren't there (so the developers are starting to offer quite large cash back schemes instead). My tip is to buy in the next 6 months. Come June/July prices will start to move upwards again but there may be a bit of panic selling before next summers tourists arrive, and as others have pointed out, the cost of borrowing in mainland Europe is cheaper than the UK (and banks WILL negotiate with costs and interest rates - NEVER take what you are given at face value in Spain).
A few things: allow at least 10% of the cost of the property in costs and taxes, don't buy if you expect to sell within 2 or 3 years, know the area well - go visit at least half a dozen times beforehand at different times and hire your own appointed Solitor - note NOT a Gestor, which is the general trend in Spain. We hired a solitor recently on what looked like a routine purchase and thanks to his extra efforts which a Gestor would never have done, we found the property we were buying was missing an original licence from 20 years ago.
Note: we bought our first place in Andalucia 2.5 years ago and sold this winter for a 55% profit, albeit with a bit of hardwork. Prices in many areas are still rising but if buying in the south avoid the West of Malaga (Marbella, Estepona, Benalmadena etc) unless purchasing as a holiday let income generator. Best bargains are (IMHO) Tarifa way at Costa De La Luz and Costa Tropical - La Herradura and Almunecar. We are looking to buy again at Torrox Costa near to where a new marina and golf course are being built and in an area which is still very unspoilt yet right on the sea. Investigating an area before an investment is a tip which I can't iterate enough...I've seen so many Brits go back home or sold up because they bought badly...
R
A few things: allow at least 10% of the cost of the property in costs and taxes, don't buy if you expect to sell within 2 or 3 years, know the area well - go visit at least half a dozen times beforehand at different times and hire your own appointed Solitor - note NOT a Gestor, which is the general trend in Spain. We hired a solitor recently on what looked like a routine purchase and thanks to his extra efforts which a Gestor would never have done, we found the property we were buying was missing an original licence from 20 years ago.
Note: we bought our first place in Andalucia 2.5 years ago and sold this winter for a 55% profit, albeit with a bit of hardwork. Prices in many areas are still rising but if buying in the south avoid the West of Malaga (Marbella, Estepona, Benalmadena etc) unless purchasing as a holiday let income generator. Best bargains are (IMHO) Tarifa way at Costa De La Luz and Costa Tropical - La Herradura and Almunecar. We are looking to buy again at Torrox Costa near to where a new marina and golf course are being built and in an area which is still very unspoilt yet right on the sea. Investigating an area before an investment is a tip which I can't iterate enough...I've seen so many Brits go back home or sold up because they bought badly...
R
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