This week the government of Spain has announced the second phase of reform of the banking system in Spain that will make it possible to buy a property is still cheaper in Spain this year.
The provisions that must be applied in bank´s balances during 2012 have increased again (the first was set in February this year. Read our article: Property bargains in Spain 2012 - 2013) and has established a plan to isolate the “bad” real estate assets in new companies in liquidation.
The goal is to anticipate the consolidation of banks in Spain to advance out of the crisis.
The direct consequence is an expected lowering of property prices in Spain making it cheaper.
While tax incentives are set such as:
- Capital gains: 50% tax exemption on capital gains in the future sale of properties purchased during 2012.
- IBI tax (an annual tax for property owners): exemptions for non-residents in Spain to invest in a property. It will let saving more money.
In addition, the rents legislation has also been modified to enhance this market:
- Easier to come back to live in your rented property: owners may recover the property within 2 months if they decide to use live there, for family member or spouse.
- Reduced term of contract: the tacit renewals of contracts of the former law is reduced to 3 years, thus limiting the minimum duration of contracts (within 5 years according to the former regulation).
- Update lease payment: previously the reference to the annual review of income was based on the CPI. Under the new legislation should the new rent will have to be set by tenant and owner as they negotiate.
All of these are good news if you expect to invest or buy a property in Spain on the future.
Our 4 basic recommendations to do so:
Property prices: compare prices based on Euros per squared meter in different seasons of the year to find out if the offered price is according to the negative trend of the market.
Property inspection: always make a proper inspection of the property. Find out if you will need to make any improvement that could increase the cost.
Property location: it is a must if you want to have a good return on the future if you resell it or let it. You have to choose the good location, so take a walk around and see what is going on there. Spend some of your holidays there if necessary.
And take your time: investing or buying a property is a matter of time as it is a big amount of equity or loan that you will have to set up. Talk with independent expert so clarify all your doubts.
Because we care!
