A weaker Euro means less pounds for British vendors who repatriate their funds to the UK

January 25, 2012 – 1:25 pm

The weaker euro v the pound affecting property vendors in Tenerife and Spain

In the Euro zone , we continue to see the  single currency’s woes. For many investors and property owners in Spain it’s time to look at the bigger picture, which doesn’t paint a pretty scene as the hang-over continues into 2012.

The second half of last year revealed a number of detrimental factors that have hurt the Euro zone – a worrying decline in stocks, increase in unemployment, Governments finally pulling their heads out of the sand and recognising the problems within their own countries have all contributed to the crisis, which left people asking whether the single currency will even survive a year. It is a fair assumption that the Euro zone debt crisis will remain the central focus of markets going well into the New Year, so further weakening of the Euro is expected.

The outcome of the EU Summit last month did little to support the currency, with the outlining of plans to work towards greater fiscal integration in the euro zone failing to provide any comfort to the market as GBP-EUR pushed the €1.20 (0.833) level, and some forecasting €1.25 (0.8) by the end of February.

So the Euro could well continue to fall, in which case now might be a good time to sell it, or get a forward contract to do so if you are not yet ready (for example, if you are in the process of selling a property in Spain).

For example, if you wanted to change Euros into Pounds in June last year, when one Pound cost 1.11 Euros, but you didn’t have access to the Euros until December, a foward contract could have saved you £6,992.21. Firstly, you agree a rate of exchange for the amount of Euros that you are looking to sell and give a date that you know that the funds will be available before (bond maturity, or date of expected house completion for example).

A 10% deposit is needed within a few days of agreeing the rate and you can then relax and not be affected by any market movement, and can get your money at any stage at the fixed rate and all you need to do is send over the Euros when you have them before the end of forward contract.

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

Shop around for your foreign currency when buying property abroad

August 11, 2011 – 5:29 pm

Take care when exchanging currency to purchase property in Tenerife and overseas

Independent analysis on the European property market found that average foreign property buyer spending £125,000 on their overseas home would receive €131,547 from a high street bank. However using a specialist foreign currency provider could result in an improved rate of €139,033 – a massive €7,486 difference equivalent to around £6,600, according to GSA.

The highest return on a £125,000 transfer was €139,650 offered by Currencies.co.uk, while the lowest was €131,062.50 offered by HSBC.

Just 10% of foreign currency transactions are made using a foreign currency provider, who can offer around 5.6% more than the High Street as they use commercial exchange rates to determine the value.

Savills International Research on second homes found that around 130,000 overseas properties were purchased by Britons between 2005 and 2009, potentially wasting millions as a result of poor exchange rates.

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

How to avoid foreign exchange pitfalls.

August 7, 2010 – 10:08 am
Avoid fees when exchanging money in Tenerife, Spain or the Canary Islands

Avoid fees when exchanging money in Tenerife, Spain or the Canary Islands

Families going abroad this summer are being warned that they could lose hundreds of pounds exchanging their money at the airport bureau de change.

Currency prices can be up to 9% more expensive at Gatwick, Heathrow and Stansted compared with other foreign exchange outlets, a survey has revealed. This means a family changing £1000 for a European holiday are £104 worse off buying euros at the last minute, rather than ordering in advance from a specialist firm which can find the best available rate. The company surveyed exchange rates for euros and dollars at bureaux de change at Gatwick, Heathrow and Stansted airports and also checked high street deals on offer at the Post Office and Marks & Spencer.

Over 14 million Britons went on holiday abroad between July and September 2009. If half of these travellers exchanged just £500 spending money at an airport bureau de change before going on holiday to Europe, they could be saying goodbye to £493 million pounds.

Specialist providers apart, the best exchange rate for buying euros was at The Post Office Phil McHugh, senior foreign exchange dealer said: “Our survey highlights the big difference in currency exchange rates offered between the high street, airport bureaux de change and specialist providers.

“People often plan their foreign holidays well in advance, shop around for the best deals and book early to save money, yet they seem to leave their common sense at the airport drop off when it comes to changing holiday cash.

“Travellers should take a few minutes to check exchange rates online or over the phone in advance of their holiday and arrange with a foreign exchange specialist for their money to be delivered to their home or work, saving themselves time, hassle and cash in the process.”

Tips for those coming to Tenerife regarding currency exchange include,  think ahead about your currency needs and avoid changing your money at bureaux de change, particularly at airports. Shop around for the best rate – don’t just automatically go to your bank or post office. Specialist providers can offer much better deals. Beware of hidden charges and high commission rates. A good headline rate does not necessarly mean the best value for money.  Avoid poor exchange rates by taking travellers cheques or currency cards with you instead of using credit or debit cards for large purchases. Travellers cheques or currency cards can also help avoid the hefty fees banks and credit card companies charge for using ATMs overseas.

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

Clock ticking on Expats’ tax refunds

May 21, 2010 – 4:35 pm
Owners in Tenerife need to hurry to reclaim tax

Owners in Tenerife need to hurry to reclaim tax

Expats who paid out too much tax on their Spanish property sale may be entitled to a rebate amounting to thousands of euros.

The potential capital gains windfall for British expats who sold property in Spain before 2007 comes after the scrapping of a discriminatory Spanish tax law.

The  pound   is now  weak against the euro, and the clock ticking on  refunds, all claims must be filed by 21st November this year. With a weakening pound and a steady euro, this welcome tax refund can be maximised by British expats who can make a claim and exchange their money as soon as possible. When yearly interest is taken into consideration on property sold as long ago as 1997,  considerable sums of money can be returned and saved.

It will be great for expats to get their cash back, but even better if they can use the current exchange rate to their advantage and get the most from their unexpected windfall.

Capital gains tax paid by British expats who sold Spanish property before 31st December 2006 was charged at a ‘non-residents’ rate of 35 per cent, compared to just 15 per cent for Spanish residents.

The Spanish government changed the law in 2007, after the EU declared it discriminatory, but an estimated ten thousand British expats had already overpaid. Now they are entitled to a refund.

The claims deadline for those who sold property between 1st Jan 1997 and 31st December 2006 has been set for 21st November 2010, under a one year statute of limitation.

Dimas Cuesta from Lexland, a law firm that has already secured rebates for British expats, added: “The legal process requires expert advice, which is fundamentally important to the chances of a successful claim. British expats looking to be reimbursed should act now, before the claims deadline.” Expats who think they have paid too much tax on their Spanish property sale should  see how much they may be owed as soon as possible.

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

Tips when buying property overseas

November 1, 2009 – 12:22 pm

When buying property You should  spend time researching the companies in the market place – using the right professionals  and estate agents will save you time, money and stress.  is not a process to be rushed.  Time is required to research the market as a whole and your particular destination of choice.

Good tips for buying property whether in Spain or Tenerife can save money

Good tips for buying property whether in Spain or Tenerife can save money

See below five tips for buying property overseas safely, just published by the Association of International Property Professionals. The AIPP is the independent industry body for international property.

1. Independent lawyer

However good your estate agent seems, not all countries are like Spain and Tenerife and an independent lawyer should be  representing  you throughout the purchase of your property overseas in emerging countries. It is the lawyer’s job to protect you and inform you.

2. Do the numbers

Make sure you know your budget before you start looking at properties – this should include at least a provisional mortgage offer if you’re borrowing money. Don’t then be tempted to buy more properties than you can afford (particularly on off-plan properties) hoping to sell the extra properties before completion unless you fully understand the risks as well as the rewards (see point 5). If borrowing money, your repayments will stretch over several years, years in which lending criteria and borrowing costs may change. Discuss the long term repayment with a financial specialist before proceeding.

3. Beware exchange rate movement

The rates do not need to move substantially to affect the value of your purchase. When you start looking, £100,000 may buy you a certain property – a 10% drop in the value of the £ against the Euro, for example, may then put that property out of your budget. If you’ve already signed contracts to buy, this could cause you a problem. Speak to specialists in this area and secure your rate of exchange early. The rate fluctuations will also affect the costs of mortgages (if you raise the mortgage overseas and earn your income at home). Again, speak to a foreign exchange specialist to highlight the risks and to take appropriate action.

4. Use professional agents and developers

There are few, if any, guarantees when buying property, at home or overseas. Employing a professional agent or buying from a professional developer will also help you.

Ask lots of questions. 3 year old children are known for asking lots of questions (why? why? why?) and you should follow their lead when talking to agents about a purchase. Initially, focus questions on the company itself, not the properties for sale. Dig around for details on the founders of the company and the track record of the company.

Ask for client testimonials (real ones) and make sure you find out in detail exactly what service they offer. Don’t just take their word for it – ask for details on their service in writing, preferably in the form of some type of ‘Terms of Business’.

5. Remember the reward: risk ratio

If you are buying property overseas as an investment (as many people have done in recent years), you need to bear in mind that big returns may come with significant risks. Be careful to assess the possible downsides to an investment property as well as the enticing investment numbers that could be achieved if all goes to plan.

Take your time and follow these tips and there is no reason why you’ll be taking any more risk buying overseas than you do at home.

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