Investing in Spanish Property – Spain’s financial difficulties have been numerous, with house prices falling by up to 40%, mortgage finance deficits and banks wading through a very deep ford. The economy has taken a hard hit since 2008 and the unemployment rate is extremely high. Furthermore, Moody’s is deliberating whether to downgrade Spain’s credit rating which was already downgraded earlier this year to BBB.
Good for landlords
All this may well spell bad news for Spain, but it may be good for British citizens looking to invest. Spain is starting to encourage investors to buy up property and rent these properties out. The Spanish government is changing tenant-biased rental laws so as to benefit landlords.
Landlord-biased legislation
This includes giving tenants a 10 day period to pay rent before being evicted. Landlords will also be able to get their properties back with just two month’s notice. At the moment tenants have a five year right to live in a home with a three year extension. This will be reduced to a three year right to reside and one year extension.
There is also a proposal for a tax relief for foreign landlords with up to 100% tax relief suggested. For this tax relief to happen however, the properties must be rented to working professionals under thirty years of age. There will also be more flexibility with regards to rent increases, instead of basing them on inflation.
Start investing
The promise of such legislation has should provide an optimistic climate for investors looking to buy-to-let. There has already been a 12% increase in Spanish overseas property acquisitions, compared with last year, prompted by the potential to buy cheap houses. Spain remains by far the most popular country for Brits to buy houses and with the increased strength of the Pound compared with the Euro and the new landlord-friendly legislation, things are unlikely to change for the foreseeable future. Just make sure when you do invest though, that you have purchased your property insurance.