Tourism in Spain indicates property collapse may only be temporary

March 10, 2011 – 11:54 am

Tenerife and Spanish property slump may be temporary as tourism on the rise once more

Despite its economic woes, tourists are still flocking in their millions to Spain and Tenerife, indicating the current collapse in property values will more than likely only be temporary – last year the country recorded the highest number of hotel stays out of any country in Europe, according to EU statistics body Eurostat. It’s no surprise then that international hotel group Marriott has chosen Spain as the destination to launch its new Autograph brand onto the European market.

Launched successfully in the United States last year, Autograph represents the group’s entrance into the upscale boutique hotel market, following the success of the InterContinental Group’s similar boutique chain, Hotel Indigo. The four new hotels planned in the Spanish cities of Madrid, Granada and the ski resort of Baqueira in the Pyrenees will be constructed from refurbished heritage properties already owned by European hotel group AC Hotels.

Both the AC Santo Mauro and AC Palacio de Retiro hotels in Madrid have been converted from historic houses to 50-room boutique hotels, while the Granada property, AC Palacio de Santa Paula, was a former convent. If successful, Marriott will expand the quirky heritage-turned-modern hotel brand into Italy and Portugal over the next three years.

“We are thrilled to launch the Autograph Collection in Europe with such a dynamic and distinguished group of hotels”, said managing director of Marriott International Europe, Amy McPherson. “Each of these properties offers a truly unique guest experience and fits perfectly within the positioning of the Autograph Collection.”

As the first major hotel launch in Spain since the collapse of the property market plunged its economy into a national debt crisis, the presence of the new Autograph brand will boost both the country’s economy and its public image. With major hospitality brands like Marriott showing confidence in Spain again, the recovery of the property industry can’t be too far behind both on the mainland and in the Canary Islands.

By Angela | Posted in Economy, General, Health, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife | Tagged , , , , , , , , , , , , , , , , | Comments (0)

Brits and Romanians keen to live elsewhere.

December 20, 2010 – 3:17 pm

Brits and Romanians looking to live in Spain and Tenerife

You may wonder what Brits and Romanians have in common – according to new research, these two nationalities are the most likely to leave home behind and begin a new life elsewhere. Despite the UK being a popular end destination with migrants from all over the world, one in three of us would love to emigrate abroad permanently, new research has revealed.

Research firm Gallup has found that British people share the top slot with Romanians in terms of being the keenest to move away from their homeland and set up a new life elsewhere. The poll questioned people living in EU countries about their contentment with their home countries and their desire to try living somewhere else.

Despite beliefs to the contrary, the economic downturn has not had a big impact on people’s desire to move away from Blighty – the same level – 33 per cent – say that they were just as keen to begin a new life elsewhere before the credit crunch set in.

This trend is similar to what Gallup observes worldwide. With some exceptions, people’s expressed desire to migrate did not decrease meaningfully in the downturn. Instead, the main reasons people gave for wanting a new life away from their home turf were being dissatisfied with conditions in local communities. Many reported feeling discontent with the local infrastructure such as the quality of the local schools and their roads and highways. Disappointment in the government and police force were also named as factors.

The type of person looking to emigrate has not changed much over the last few years. The vast majority of people looking to emigrate were young professionals with relatively high levels of education, all of whom were dreaming of better career prospects and a better quality of life elsewhere.

Thirty-three per cent of those with secondary educations were keen to try life elsewhere, whilst 36 per cent of those with a degree say they would like to move if they had the chance. In terms of location, British people were most keen on Australia, the USA, Canada Spain and its islands.

But the research also found that us Brits appear to be all mouth and no trousers – despite the high levels of desire to want to move abroad, a tiny two per cent of us were actually considering doing so over the next year – a far lower proportion than in many other EU countries. If all of the people who expressed an interest in emigrating actually did so, the UK would be left with a severe skills shortage as its youngest, brightest and best educated hopes flew the nest to take their skills elsewhere.

Gallup’s findings show that the government needs to do more to improve the communities within the UK in order to make them a more appealing place to live and work over the coming years.

By Angela | Posted in Economy, General, Health, Holiday, Inspirational, Property, Tenerife, Things to Do, Weather | Tagged , , , , , , , , , , , | Comments (1)

Eurozone growth forecast

November 22, 2010 – 10:09 am

Positive forecast for Euro zone may assist Tenerife's property market.

The eurozone economy has been forecasted to grow twice as fast in 2010 than previously predicted due to it being on a more solid footing, according to the European Commission.

In its twice-yearly interim economic forecasts for the 27-nation EU and the 16 countries using the single currency, the EU executive said it now expected the euro zone to grow by 1.7% this year, rather than the 0.9% it forecast in May and up from a 4.1% contraction in 2009.

Olli Rehn, Economic and Monetary Affairs Commissioner, said: “We now have solid ground under our feet. We have started scoring again, but there is no reason to shout for victory. We must remain alert and vigilant.”

The Commission’s forecast compares favourably with projections by the European Central Bank which stated on September 2nd that it expected euro zone growth to be between 1.4 and 1.7% this year.

Rehn said: “The European economy is clearly on a path of recovery, more strongly than forecast in the spring, and the rebound of domestic demand bodes well for the job market. However, uncertainties remain and safeguarding financial stability and continuing fiscal consolidation remain key priorities.”

The Commission said risks to its forecasts were broadly balanced. Among the negative risks, it saw high debt levels and lingering tensions in sovereign debt markets.

On the positive side, it listed the impact from fast German growth into other EU countries and stronger domestic demand.

Source: www.property-investor-news.com

By Angela | Posted in Economy, General, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do | Tagged , , , , | Comments (0)

Spain is Brits’ favourite

September 5, 2010 – 11:11 am
Spain and Canary Islands Brits favourite spots

Spain and Canary Islands. Brits favourite spots

If you are looking to up sticks and spend your golden years somewhere warmer, check out Standard Life’s new list of the world’s top five retirement hotspots – but before you jump on that plane, be warned that a life abroad may leave you less well off than staying in Blighty thanks to pension woes.

Spain is the country that most Brits would like to retire to, due to it’s warm climate, outdoors lifestyle and the proximity and ease of getting back to the UK.  There is a crucial point to consider before heading off for sunnier climes – namely money and whether you will actually be able to afford the retirement you are dreaming of.

Andrew Tully, Senior Pensions Policy Manager, Standard Life said, “Retiring abroad is a dream for many people but without careful planning and advice, things can potentially go wrong very quickly.”

If you move abroad permanently, any increases in your UK state pension will only apply if you are living in an EU country (including Gibraltar and Switzerland), or a country with a reciprocal social security agreement with the UK. So, while your friends back home in ol’ Blighty may be enjoying double the level of state pension that you are getting after 20 years.

If you choose to move outside these countries, the amount of UK state pension you will receive each year is frozen at the amount initially paid when first claimed – or if you emigrated more than one year after payment began, at the rate in force when emigrating). Popular retirement countries outside these reciprocal agreements include Australia, Canada, New Zealand and South Africa.

Mr Tully added, “One significant consideration before you move is to think about your state pension and what, if any, reciprocal agreement is in place.  If there isn’t a reciprocal agreement in place, then you need to be very careful your retirement income is sufficient to cover your living costs over a long period of time.  Over a 20 year retirement, your basic state UK pension could halve in real terms if a reciprocal arrangement is not in place.”

If you are considering retiring abroad in the future, but are wondering if your retirement savings will be sufficient, Standard Life has launched www.getarealitycheck.co.uk, where you can check if your plans are on track.

Top tips for retiring abroad

Seek independent financial advice before making plans about future pension provision or transferring your pension overseas.

Check what reciprocal basic state pension agreements are in place with the destination country, if any (check with the Department for Work and Pensions).

Inform your social security office, HM Revenue and Customs, and the Department for Work and Pensions when you move and provide your contact details abroad.

You can get a forecast of your state pension by completing a BR19 form or go to www.thepensionservice.gov.uk.

If already overseas, complete form CA3638 or call The International Pensions Centre on 0191 218 7777.

Check your state pension age (SPA). For women, the SPA is rising from 60-65 between 2010 and 2020, with further rises to 68 currently expected to take place by 2048, although the coalition government may accelerate these changes.

Find out about welfare rights abroad.  Some UK benefits are not payable outside the UK, others apply only in the EU or in countries which have agreements with the UK.

Tell your bank, building society and any other financial institution that you have a policy or agreement with them and are moving abroad.

Contact your local council to let them know when you are leaving and leave a forwarding address.

Find out more about healthcare costs in the country you want to move to.

Inform your GP and dentist you are moving, and consider private healthcare.

By Angela | Posted in Economy, General, Health, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do | Tagged , , , , , , , , | Comments (0)

Tax rule changes to apply to overseas holiday homes

August 24, 2010 – 10:55 am
tax rules changes on second homes will have implications on rentals in Tenerife,the Canary Isles and Spain.

Proposed tax rules changes on second homes will have implications on rentals in Tenerife,the Canary Isles and Spain.

Proposals announced by the Government last week, on changes to the tax rules on furnished holiday lets (FHL) will also apply to the owners of properties in the European Economic Area if they are UK tax payers, warns accountants James Cowper

The changes proposed for April 2011 bring the taxation of FHL into line with EU law, whilst at the same time limiting the effect on the holiday industry, and include: An increase in the number of days a property needs to be let before it can qualify as a FHL. This will restrict the extent that owners will be able to use their second home and still retain the tax breaks.

Removing the ability to offset expenses against other income. For many this will increase the cost of running their second home. Stephen Barratt, private client director at James Cowper comments: “Currently a property only has to be let for 70 days and be available for 140 days to qualify for tax breaks under the FHL rules.  These had been due to be scrapped from April 2010 but were saved in the Emergency budget on 22 June.  If the current proposals are implemented, the tax breaks will be restricted or removed altogether as the letting requirements rise to 105 and 210 days respectively.

“Many in the industry think this is a way of penalising second home owners and it could force many to choose to sell their properties ahead of the April 2011 rule change.  If many people come to the same conclusion this could see a glut of properties on the market in holiday home hotspots both in the UK and overseas.”

Stephen continues: “Whilst the thrust of this consultation will cause concern for many, property investors who operate on a more commercial basis are unlikely to be affected by the proposals as they are clearly aimed at those who let their property for close to the minimum of 70 days per annum and also use it for their own holiday benefit at other times.”

“We must wait and see what is in the detailed rules, but even at this stage we can expect them to have an impact on both the industry and property prices. It will certainly impact the affordability for those who are thinking about purchasing a second home.”

The headline rate of capital gains tax is 28% for higher rate taxpayers and 18% for basic rate payers, but the profit on a sale of a FHL generally attracts a rate of just 10%. There might also be an element of main residence relief in the case of a second home where the necessary tax election has been made. Depending upon the scale of the business and the timing of the sale, it might be that a sale after 5 April 2011 will still qualify for the 10% tax rate. The rules are complex and so those looking to hold on to the property beyond that date but still benefit from this favourable rate should seek proper professional advice.

Stephen Barratt concludes: “As always the detail in the legislation is crucial and at this stage we only have proposals for consultation. That said, change is in the air and it seems clear that the coalition government is looking to raise the bar before the owners of these types of properties get the tax benefits of ownership. I would urge anyone with a holiday property, or looking to buy one, to keep a close eye on developments over the coming months and on the impact any changes will have on their individual circumstances and plans. The consultation period ends on 22 October 2010 so more detail should be available shortly after.”

Clearly this will have an impact on those who own or are looking to buy with rental income in mind in Tenerife, the Canary Isles and Spain in the not too distant future.

By Angela | Posted in Economy, General, Health, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do, Uncategorized, Weather | Tagged , , , , , , , , , , , , , , , , , , , | Comments (0)

Economic woes drive overseas property interest

August 14, 2010 – 5:35 pm
Economic woes prompt property searches in Tenerife and Spain

Economic woes prompt property searches in Tenerife and Spain

The Capital Gains Tax hike and the start of the summer holiday season have had no real impact on interest in international property.

According to the latest Primelocation International Search Index, total searches for overseas property were down 7% in June but up by 138% on the same period last year.

The website therefore claims that financial pressures in the UK haven’t dampened interest, adding that other research indicates that one-third of international property searchers are looking to relocate abroad permanently.

The UK’s uncertain economic outlook could therefore be acting as spur for international househunters, particularly as many Britons are now facing more years in the workplace before retirement.

“The data, taken in conjunction with the results of the MyHomeLife panel research, indicates the increasing diversity of the international property market, encompassing investment buyers, relocators, semi-permanent movers as well as traditional second-home owners.While transactions have not yet recovered fully to return to their pre-crash levels, with finance and buyer caution remaining an issue in many cases, this broad range of different buyers is undoubtedly an important factor in explaining the current stability of the international property market.”

The Financial Times has reported that in June, Eurozone mortgage borrowing increased at it fastest pace in almost two years, indicating that confidence in property markets across the EU’s 16 member countries is returning.

By Angela | Posted in Economy, General, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do, Uncategorized | Tagged , , , , , , , , , , , , , , , , | Comments (0)

Spanish banks undergo stress tests

August 3, 2010 – 10:25 am
Spanish banks stress test

Spanish banks stress test

The EU Stress Tests were published recently and assessed whether banks will be able to survive future economic shocks.

A total of 27 Spanish banks have been subject to testing and several of the smaller banks are expected to fail. Spanish regional lenders in particular are a cause for concern, having racked up heavy losses following the collapse of the Spanish property market.

Gregory Butcher, chairman of Ocean Village Gibraltar, said: “Being based here in Gibraltar and operating daily in the property and financial markets we are aware of both the ‘real life’ situation and in sharp contrast, that shown in the Spanish financial institution’s quarterly results.

“The benchmarking used in valuations of property assets in the appraisal of bank lending in Spain is flawed and as a result overvalues the property assets and hence shows less impairment.

“Spain’s financial institutions subsidise the mortgages on sales of their own repossessions to then gain higher capital prices than buyers would normally pay and appraisals then take those sales as the basis of valuations across a bank’s entire property book.

Butcher stated that these overvaluations are then used by the bank appraisers and in the EU’s stress tests.

Spain has an overhang of 610,000 unsold new homes, together with 1,100,000 resale homes currently for sale in the private market represent some years supply (414,000 homes were sold in 2009). The number of repossessions expected this year is 180,000.

As such the overhang of unsold stock in Spain is proportionally more than in the USA, which itself is into the third year of a significant property price correction. Butcher said:”a substantial price correction is now required to sell on the overhang which will not have been reflected in the EU stress tests.

“The UK and USA have had their banking crisis and Spain faces proportionally a greater one, arguably with less resources but it appears it is also intent on attempting a postponement.”

By Angela | Posted in Economy, General, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do, Uncategorized | Tagged , , , , , , , , , , , | Comments (0)

Final month left to claim CGT charges or lose them.

July 17, 2010 – 10:47 am

Final month to get the extra CGT back for purchasers in TenerifeSpain is on cloud nine after winning two of the biggest sporting gongs in the world, but there is a rather more pressing matter for them to deal with – at least for the Brits who sold a property in Spain between 1997 and 2006 – who have just one month left to begin claiming back capital gains tax charged illegally on the sale of their home.

The Spanish Government illegally charged British people more than double the amount of Capital Gains Tax, (CGT) they owed on their properties between 1997 and 2006. The poor Brits who had chased the sun to Spain in search of sea and sangria were forking out a whopping 35 per cent under the ‘non-resident’s income tax’ bracket. Spanish nationals residing in similar homes were paying the proper rate – just 15 per cent of any capital gains. The overcharging is estimated to have raked in more than £350 million for the Spanish Government.

In 2009, following much outcry from British owners of Spanish properties and an expose by a group of Spanish lawyers and a UK based currency specialist, the European Court of Justice (ECJ) ruled that the tax contravened European Community Treaty rules against discrimination. They agreed that any UK or EU citizen who sold a property in Spain between 1 January 1997 and 31 December 2006 could claim back the excess charges.

Now, those affected by the illegal CGT charges have just a month left to make their claim or face losing out on the chance to get back what is rightfully theirs. All claims must be finalised and settled by the end of October this year – as August is considered to be a holiday month in Spain, sellers have just one month left to kick off their claims, which can take up to three months to be realised.

The average amount of money being recovered is around £15,000, so it is more than worth checking if you are eligible for a refund. More than 500 British families have already been successful with their claims.

Even if you have tried previously to recoup the money and not been successful, lawyers are saying that a second try is most definitely worthwhile as some of the rules governing eligibility have changed – indeed, the European Court of Justice have recently opened new legal actions allowing claimants to make a second attempt.  The industry  estimates that there are still thousands of Brits who sold Spanish properties during the eligible time period who haven’t come forward. So if you bought a property in Tenerife, the Canary Islands,  or mainland Spain, get that claim in pronto!

By Angela | Posted in Economy, General, Health, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do, Uncategorized, Weather | Tagged , , , , , , , , , , | Comments (0)

Less hefty mobile phone bills for travellers in Tenerife.

July 3, 2010 – 6:25 pm
Cheaper mobile phone costs when visiting Tenerife, the Canary Isles and Spain

Cheaper mobile phone costs when visiting Tenerife, the Canary Isles and Spain

Travellers to Europe, including Tenerife and Spain, are less likely to incur hefty bills for using their mobile phones abroad, under new regulations that have come into force. A new maximum charge of 32p per minute, down from 35p, will apply to all calls made while travelling within the European Union, while mobile phone operators are now obliged to place a €50 (£41.50) cap on all data roaming charges, unless specifically requested not to do so by the customer.

A mobile phone user’s network must now send a warning to the customer if they approach the data-roaming cap, and automatically cut the mobile phone’s internet connection if the cap is reached. While the cost of downloading data remains the same, the change should prevent travellers unwittingly running up huge bills for using the internet.

The charge for receiving calls while abroad has also been cut, to a maximum of 12.5p per minute, down from 15.5p.

The changes follow repeated calls by the European Commission for mobile phone networks to reduce their charges, and frequent reports of holidaymakers returning home to discover mobile phone bills totalling hundreds, or even thousands of pounds.

“Mobile phone companies were given ample opportunity to act on the cost of using phones in another EU country,” said Labour MEP Arlene McCarthy, who steered the law through the European Parliament. “In the end it has taken EU action on every issue – calling, texting and now data roaming – to bring prices down.”

However, about 60 per cent of Britons still believe the data-roaming cap should be lowered, according to a recent survey. “The EU roaming cap is a positive step to prevent enormous bills on returning from abroad,” said a Budgetplaces spokesperson. “But our research shows that UK travellers believe that the €50 cap is still too high.”

By Angela | Posted in Economy, General, Holiday, Inspirational, Miscellaneous Articles, Tenerife, Things to Do, Uncategorized | Tagged , , , , , , , | Comments (0)

Cost of maintaining property overseas increases

June 13, 2010 – 11:40 am

Maintaining property in Tenerife on the increase

Maintaining property in Tenerife on the increase

85% of overseas property owners say the cost of maintaining their property has gone up in the last 12 months, so check out this guide on how to reduce the cost of being an overseas property owner.



Over a million Brits currently own a home overseas, with France and Spain being the most popular destinations. However the global economic slowdown has hit homeowners not only at home, but also abroad as the cost of maintaining a property has increased -over a fifth of owners (21%) are struggling to meet the increased costs, according to latest research.

Whilst mortgage rates may have gone down for many owners, the overall cost of owning a property overseas (including local taxes, utility bills, maintenance costs etc) has continued to grow and the rising costs of ownership have been magnified by sterling’s depreciation.  Many homeowners are also seeing their rental income from a holiday home hit, as the number of potential tenants decreases with more people opting for ‘stay-cations’ in their home country.

To help the million plus Brits who currently own a home overseas, HiFX has complied a guide to reducing the cost of ownership, including cutting the costs of international money transfers, how to ensure the property is as tax efficient as possible and how to maximise rental opportunities.

1. Protect yourself from currency fluctuation:

Two years ago the average overseas home owner transferred £10,000 a year to meet maintenance costs (including overseas mortgage payments) and provide spending money when they visit their second home. However as the pound has taken a beating against all the world’s major currencies, they now have to convert significantly more in order to meet the costs associated with their international property such as maintenance costs, mortgage payments, utility bills and local taxes.

For example, in October 2008, £10,000 would have bought you €12,900.  To receive the same amount of Euros today, a Brit has to transfer £11,896, almost £2,000 more.

Advice for Brits who are feeling the pinch:

People making regular currency transfers should set up a Regular Payment Abroad plan with a currency broker that allows you to lock into an exchange rate for up to 12 months ahead so you know know exactly how much is being transferred every month. A Regular Payments Abroad plan also saves you forking out on commission and transfer fees. Banks typically charge up to £30 as a transfer fee on each and every transaction, up to 2% commission on the amount being transferred and, depending on the destination bank account, you may also be charged a further 0.5% receiving fee by the overseas bank.

Those who are uneasy about fixing the exchange rate and are more bullish about Sterling’s future or those who are making international transfers on an ad-hoc basis should at the very least shop around for better exchange rates and compare the rates offered by their high street bank with a currency specialist, particularly one which offers an online service for smaller amounts of money

2. Cash in on rental opportunities

According to the research, almost 70% of holiday home owners are missing out on vital income by not renting out their overseas property. Almost half of those that do rent it out only do so to friends and family who traditionally pay less than other tenants.   Talk to neighbours, the local economic development office and estate agents about rental rates, which websites work for advertising their holiday home and the seasonality for tourists.  If you decide to use a website to advertise your holiday home, put some effort into putting great pictures up and writing an attractive description.

3.  Ensure your property is tax efficient

Overseas home owners have to pay ongoing taxes on ownership, such as local taxes or even tax on rental income.  This is usually payable in the country where the property is located, but if you are a UK resident, such income also needs to be recalculated into Sterling and is taxable in the UK, regardless of where it is paid, with any appropriate relief given in the UK for taxes paid abroad. Each country will tax the income according to its own rules, so sometimes more allowances are available abroad than in the UK or the tax rates abroad may be lower, but the higher tax liability will be due.  However, there may be ways of reducing your tax bill, but whatever you do, you only pay tax when you make money. Spending money unnecessarily to save tax can often be a false economy; after all, why spend £100 to save £40? It is important to make sure that you claim whatever allowances you are entitled to. Make sure you know the rules or employ someone to prepare the returns for you.  Trying to do it yourself, if you don’t understand the rules, can be a false economy.

People who take advice before buying their property abroad often manage to make their purchase more cost-effective than those who buy without taking advice.

By Angela | Posted in Economy, General, Health, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do, Uncategorized, Weather | Tagged , , , , , , , , , , , , | Comments (0)