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Spain to encourage expat property investing in rural areas
| Published: | 5 Oct at 6 PM |
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Tagged: Spain, Property Abroad
In an attempt to kick-start the country’s struggling economy, the Spanish government has announced it will encourage sales of empty properties to buy-to-let investors.
As well as its massive bank and government debts and its soaring unemployment and cost-of-living levels, Spain also has a property industry on its knees with house prices dropping like stones to all-time lows. Mortgage finance through Spanish banks has almost dried up, with the government desperate to encourage landlords to bag property bargains and let them out.
Until now, rental laws in the country have been heavily in favour of tenants’ rights, leading to a long-term decline in investors willing to take the risk. The government is working on a set of new laws which will return power to landlords in the hope that the measure will spark a buying spree.
Under the new regulations, tenants in rent arrears will be given just 10 days to pay up or get out, with eviction notices far easier to obtain. Property owners will be able to repossess the property after two months’ notice and tenants will now only have the right of abode for three years with an optional one year extension.
A boost to foreign ownership will be given in the form of tax relief on rental incomes, set from 60 to 100 per cent, provided the property is let to working people under the age of 30. Inflation-linked rent increases will be thrown out and replaced with term agreements between the tenant and landlord.
For expats already resident in Spain, the new laws may signal an investment opportunity, as prices for homes have dropped dramatically. Buying to let in a familiar area could prove to be a productive use of capital which is at present yielding little or no interest.
As well as its massive bank and government debts and its soaring unemployment and cost-of-living levels, Spain also has a property industry on its knees with house prices dropping like stones to all-time lows. Mortgage finance through Spanish banks has almost dried up, with the government desperate to encourage landlords to bag property bargains and let them out.
Until now, rental laws in the country have been heavily in favour of tenants’ rights, leading to a long-term decline in investors willing to take the risk. The government is working on a set of new laws which will return power to landlords in the hope that the measure will spark a buying spree.
Under the new regulations, tenants in rent arrears will be given just 10 days to pay up or get out, with eviction notices far easier to obtain. Property owners will be able to repossess the property after two months’ notice and tenants will now only have the right of abode for three years with an optional one year extension.
A boost to foreign ownership will be given in the form of tax relief on rental incomes, set from 60 to 100 per cent, provided the property is let to working people under the age of 30. Inflation-linked rent increases will be thrown out and replaced with term agreements between the tenant and landlord.
For expats already resident in Spain, the new laws may signal an investment opportunity, as prices for homes have dropped dramatically. Buying to let in a familiar area could prove to be a productive use of capital which is at present yielding little or no interest.
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