resale – Tenerife Property

Developers ask government for mortgage interest tax relief on holiday homes

February 1, 2012 – 11:51 am

Developers ask for reduction of tax on properties in Spain and Tenerife

The G14 association of Spain’s leading developers says it will ask the Government to introduce mortgage interest tax relief on holiday homes to stimulate demand and deal with Spain’s empty new holiday homes on the coast.

The Government has just reintroduced mortgage interest tax relief on main homes, despite the fact that it favours owner-occupiers at the expense of those who rent, and makes it harder for Spain to reach its stated goal of increasing the rental market. Developers want a similar tax break for holiday homes.

Some industry voices like Antonio Carroza have wasted no time in describing the request as “irresponsible”. He believes it is wrong to use public money to subsidise “large developers so they can sell second homes that should never have been built,” he said, quoted in the Spanish press. In any event the tax relief would only apply to Spanish residents, not foreigners buying holiday homes in Spain and Tenerife.

The G14 has also called on the Government to reduce the ITP sales tax on resale properties.

By Angela | Posted in Economy, General, Health, Holiday, Inspirational, Property, Tenerife, Things to Do, Weather | Tagged coast, developers, foreigners, G14, government, Holiday, homes, interest, ITP, mortgage, properties, rent, resale, residents, sales tax, Spain, Spanish, tax relief, Tenerife| Comments (0)

VAt on new homes slashed

September 29, 2011 – 9:51 am

Vat slashed on Tenerife and Spanish homes

VAT on new homes will be slashed from 8pc to 4pc for the rest of the year, José Blanco, Minister of Public Works and Housing announced this week.

The VAT reduction will only apply to sales of new homes that take place before 1 January 2012. Someone buying a new home for 200,000 Euros before the end of the year from a bank or developer will pay 8,000 Euros less in VAT.

Resale properties will not benefit because they do not incur VAT. Anyone buying a resale from a private vendor will continue to pay a transfer tax of 8pc, rather than VAT at 4pc.

However, at least one savings bank – Catalunya Caixa – has announced that it will also offer a 4pc discount on all its resales (repossessed homes) between now and the end of the year. Others banks are expected to follow suit.

The Government’s stated objectives with this latest measure are to help reduce the stock of new homes for sale, giving the construction sector a boost and stimulating employment.

According to José Luis Rodríguez Zapatero – the Prime Minister said “if it wasn’t for the construction sector, the Spanish economy would be growing at 2pc. All the jobs lost today are in construction.”

Elena Salgado, Minister of Finance, said the reduction in VAT will be “sufficient to reduce the stock of homes.”

As recently as July last year, the Government increased VAT on new homes from 7pc to 8pc in an attempt to increase revenues and reduce the budget deficit. This is a U-turn that hardly covers the Government in glory.

If the fall in VAT does anything to stimulate the market it will only benefit those with new homes for sale, principally developers. As a result, private vendors will find themselves under further pressure to reduce their asking prices.

The opposition Popular Party has promised to extend the rebate for an extra year if it wins the general election in November.

By Angela | Posted in Economy, General, Health, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do | Tagged Caixa, Catalunya, discount, Economy, Euros, homes, properties, resale, savings bank, Spanish, Tenerife, VAT, vendors| Comments (0)

Average asking prices down for resale properties say Idealista

July 15, 2011 – 10:23 am

Resale property prices fall say Idealista

Average asking prices for resale properties in the Idealista database dropped 8.2pc over 12 months to 2,179€/m2, a quarterly fall of 1.8pc.

“The latest price index from Idealista confirms a worsening in the market situation,” explains Fernando Encinar, head of research at Idealista. “The price of resale flats is falling in ever more municipalities, and the discount is getting bigger.”

The Canaries index was down by 2.9% . If you are looking for a bargain and deal with a reputable estate agent, this could be the time to take the plunge in Tenerife.

By Angela | Posted in Economy, General, Health, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do, Weather | Tagged Canaries, discount, estate agent, Idealista, properties, resale, Tenerife, €| Comments (0)

Spanish banks undergo stress tests

August 3, 2010 – 10:25 am

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 assets, banks, EU, homes, market, new, Property, repossessions, resale, Spanish, UK, USA| Comments (0)

Optimism for Spanish and Canarian property market.

May 30, 2010 – 10:41 am

Optimism returns to Tenerife and Spain's property market

The price of re-sale property in Spain and the Canary Islands increased in January for the first time in 24 months, according to figures and other reports suggest there are tentative signs that part of the country’s battered real estate market is coming back to life.

Prices rose by 0.6% on average, with the regions of Cataluña, and La Rioja seeing the greatest recovery in price at 4.6% and 4.5%, according to figures from the real estate portal fotocasa.es.

Property prices also rose in the regions of Comunidad Valenciana, up 2,2%, Asturias up2%, Baleares with a 1,9% increase, Aragón up 1,4%, Galicia up 0,9% and Madrid up 0,7%.

While another index shows that overall Spanish property prices fell by 5.5% over the 12 months to the end of January. However, these figures from appraisal company Tinsa are based on their valuations, not on actual selling prices. Activity in the real estate market is still very depressed.

The latest figures from the National Institute of Statistics shows that year on year the market shrank by 27% in volume terms to 372,000 transactions in 2009. They have fallen 48% since 2007 when there were 715,000 sales.

December 2009 had just 28,669 home sales, the second lowest level of monthly sales on record. But compared to December last year, sales were down just 1%. ‘That’s because by December last year, the market was already deep in crisis.

From now on, annualised comparisons won’t look so bad, and won’t give any indication how far the market has fallen,’ explained Spanish Property Insight.

‘When the market hit the skids, resale transactions collapsed much quicker than new builds, which outnumbered re-sales throughout 2009. In normal market conditions, it’s the other way around. As 2009 went by the two started to converge, and in 2010 re-sales may once again overtake new builds, though it does depends on whether banks are prepared to lend to resale buyers,’ he added.

Whilst there’s little doubt that life is returning to the Spanish property market, it still remains utterly price sensitive, according to Chris Mercer, director of Mercers real estate agents. ‘We are making it our business to find realistically priced property from motivated sellers for serious buyers who are in a genuine position to make a purchase. The reality is that decent investment properties are out there, whatever the market, it just takes some expertise and effort to find them.’

If your property is overpriced you won’t sell and you’re wasting your own time and our time, whilst also giving the buyer an unrealistic view of the market. If you’re a motivated seller able to accept a realistic price for your home, we’ll find a buyer.

He also believes that for investors renting to local people can prove fruitful. ‘If you’ve got a 20% deposit then the rent will comfortably pay the mortgage and as you’re truly buying at the bottom of the market, you have an asset that will certainly appreciate in years to come.

By Angela | Posted in Economy, General, Health, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do, Uncategorized | Tagged buyers, Canary Islands, Cataluña, home, Investment, Madrid, market, mortgage, prices, Property, real estate, resale, Spain, TINSA, Valenciana, valuations| Comments (0)

Still pain in Spain

October 23, 2009 – 9:42 am

The pain in Spain's property market continues, although some areas including Tenerife are fairing better.

Data shows that resale Spain property values dropped at a slower pace of decline in Q2, compared to the preceding quarter.
Resale Spanish home values fell by 12.5% in the first quarter of 2009, but slowed to a decline of 11.2% in the second quarter.

The index also claim that Spanish areas traditionally popular with foreign investors, such as Tenerife, Andalucia and Murcia, are holding up well. But areas such as Madrid, Catalonia, and the Basque Country, where values appreciated the most during the boom years, experienced that largest price declines.

Despite the government data, some people are dubious of the figures and advise caution stating that new-build Spain property prices have fallen by far more than the report suggests.

By Angela | Posted in Economy, General, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do, Uncategorized | Tagged Andalucia, Basque, Catalonia, Madrid, Murcia, new build, prices, Property, resale, Spain, Tenerife, value| Comments (0)

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