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Price review makes buying Spanish property more taxing

SpainHouses.netNovember 18, 2013November 14, 2013Leave a comment

Approximately one million Britons live in Spain permanently or maintain holiday homes there.

The worst effects of the global recession have seen property prices plummet, representing a golden opportunity to pick up relative bargains. For those unable to sell, it provides a significant headache.

Fewer and cheaper sales not only spell bad news for owners and vendors - they have also caused concern on the part of Spain’s tax authorities, which have seen their take decrease due to the slowdown in the property market.

In order to reverse the situation, tax officials have taken more proactive steps, resulting in an increase in reviews of sale prices and the transfer taxes paid when properties are bought. It’s a step that can have consequences for buyers a number of years after ownership of the homes in question has changed hands.

This price review is a valid long-standing tax measure under Spanish property law. However, it is not necessarily apparent or brought to the attention of those eager to start life overseas.

When recession struck, the amount of transfer tax – called impuesto de transmisiones patrimoniales (ITP) – pouring into official coffers decreased significantly owing to the reduced number of sales and/or lower prices.

Under the terms of the Spanish law Ley del Impuesto sobre Transmisiones Patrimoniales y Actos Jurídicos Documentados, enacted in 1993, regional tax authorities have powers to examine all property purchases in order to ensure that the correct amount of ITP is paid by the buyer.
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Property Market: The Challenges Facing Spain’s Toxic Bank 1

SpainHouses.netNovember 11, 20131 Comment

Five years after Spain's property bubble burst, hundreds of thousands of new and unfinished properties remain unsold throughout the country. Meanwhile, some of the biggest companies in the world have had to eat humble pie, reduce their size, and in some cases have simply been swept away.

Slowly, and reluctantly, the property sector is facing up to one of the major reasons nobody is buying property: the huge numbers of homes that remain unsold, some of them unfinished. This is the case for the major financial institutions, as well as Sareb - the so-called "bad bank" set up to sell the vast portfolio of real estate accumulated by failed, and subsequently nationalized, banks after the property companies they had financed went belly up.

Estimates of the number of unsold houses range between the government's figure of 675,000 and the 815,000 calculated by savings bank CatalunyaCaixa. To this figure also needs to be added the close to half-a-million homes that are still under construction, according to both the government and the real estate sector. The areas with the largest number of unsold properties are, in order: Castellón, where one in four homes is empty according to CatalunyaCaixa; Toledo; Murcia; Almería; Tarragona; La Rioja; Alicante and Malaga.
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The Increase in Chinese Tourism

SpainHouses.netNovember 4, 2013Leave a comment

The World Tourism Organization says that last year, 83 million Chinese took their vacations abroad, an eight-fold increase on 2000. The Chinese overtook the Russians as the main consumers of tax-free goods in Europe, and in 2012, overtook the Germans on the amount they spend on travel. Last year they spent 78.4 billion euros, a 40-percent increase on 2011.

Spain has set itself the challenge of trying to attract more Chinese visitors, setting the target of one million by 2020. This year's January-July period saw 112,000 Chinese visit Spain, a 30-percent increase on 2012. In general, Spain, like the rest of Europe, is moving away from organized mass tourism: France comes 11th out of the top 25 destinations for Chinese vacationers. Spain is not on the list.

Rowdy or not, governments around the world are doing all they can to attract Chinese visitors, seeing them as a simple way to improve their ailing economies. But tempting the Chinese is no easy task, says Chanarong Mookjai of the Thai Association of Travel Agencies. "The absolutely essential thing is having enough people who can speak Chinese around so that visitors feel comfortable, and that also means that we have to adapt to their needs. ...continue reading "The Increase in Chinese Tourism"

Spanish bad bank reorders property sale as bids fall short: sources

SpainHouses.netOctober 28, 2013October 28, 2013Leave a comment

Spain’s bad bank failed to attract high enough bids in its first sale of commercial real estate and will cut the size of the portfolio being offered to make it easier to sell, Bloomberg quoted three people familiar with the matter as saying on Friday.

The bad bank, known as Sareb, received more than 30 offers for the portfolio that were lower than it expected, said one of the people, who declined to be named because the information isn’t public. It will reduce the number of buildings in the package known as Corona to four from seven, the person said. A spokeswoman for Madrid-based Sareb declined to comment.

Spain created Sareb last year to absorb 50 billion euros of real-estate assets from lenders including Bankia group that took aid as part of the nation’s European bailout. Its failure to attract high enough bids may undermine growing optimism in Spain as the stock market has surged 20 percent this year and foreign investors including Microsoft Corp. founder Bill Gates buy into Spanish companies.
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Spanish Home Sales Drop 15 Percent in August

SpainHouses.netOctober 21, 2013Leave a comment

Total home sales in Spain in August plunged 15.3 percent from a year earlier to 23,552 as rampant unemployment and downward pressure on wages more than offset the impact of ongoing falls in prices, according to figures released Monday by the National Statistics Institute (INE).

The fall was the biggest registered this year and the fourth of its kind in a row. The government announced in the summer of last year that tax relief on purchases of family homes would disappear at the start of this year, prompting households to buy in anticipation of the change. The administration also announced at the same time that the VAT rate on new homes would be raised from 4 percent to 10 percent.

The INE’s figures are based on transactions recorded by property registrars, meaning that the actual sales took place about two months prior to that.

Despite the sharp fall in August, sales for the first eight months of the year were up 1.2 percent from the same period a year earlier, in part spurred by growing interest by foreign purchasers. The number of transactions paid for without recourse to a mortgage accounted for 70 percent of the total.

According to figures released by the INE, house prices have fallen 37 percent from their peaks just before the bubble burst. The jobless rate at the end of June stood at 26.3 percent.
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