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Many property owners not resident in Tenerife, are unaware that they are required to present a tax return to the Hacienda. Normally the only tax payable will be based on the house or apartment, as the owner must declare a return in the country where they are resident, in respect of earned income from their business or occupation, from a state and/or private pension, or dividends gained on investments or money held on deposit in a local bank or in an off shore account.

All properties have a catastral value that is calculated from the size of the villa or house, the designation of the land on which it stands and the local area. It is clear that an apartment in the centre of Los Cristianos will have a higher value than the same size and type of property on the outskirts of Adeje.

Each year, property owners will be required to pay taxes, or rates, to their local Consorcio office. The amount due is for a calendar period from the 1st of January to the 31st of December and will be based on the catastral value on the computer.
This value may be amended, from time to time, by the valuation office of the town hall, in line with the upward movement of the house market: in the exploded view of the tax receipt above the property, built in the 1960’s, was last re valued in 1994.
A change of land classification will result in a higher value of any property in that area: for example, if green belt land is revised to town or city status. The new catastral value will be sent to the owners, and the Consorcio taxes will increase for the year following.

Higher taxes would also occur if an existing property had been improved, with a substantial increase in the square meterage of the completed building. The revised rates would be charged once the Escritura for Obras Nuevas had been presented to the authorities.
Some town halls send out preformatted receipts that can be taken to a local bank for payment: other ayuntamientos expect their owners to go to the Consorcio office to collect their receipts when the ‘voluntary period’ opens.

All ayuntamientos operate this payment window, but the period varies from one ‘borough’ to another. Once the close date has passed, any unpaid taxes are considered overdue and collect interest and Demora that are added to the basic value.

Many absent owners address this issue by arranging automatic payment through their bank account each year, but this means that the receipt has to be collected from the bank when they are in Tenerife, unless their correspondence is forwarded to their address in their home country.

The paid receipt for Consorcio taxes is critical for any tax return: a declaration for 2006 will require the receipt for 2005, in support of the tax calculated on the value of a property.

Any property owners who are resident will be required to submit a tax return that also includes their income. It is possible that tax will already have been paid, at source, and this will be taken into account.

However, certificates will be required confirming the paid tax, and these have to be prepared for the Spanish fiscal year, from the 1st of January to the 31st of December. This does not present a problem for interest earned in Spanish banks: they are familiar with the system and issue the documents to their clients in the early months of each year.

Full story from Tenerife News

Whilst killing time in a hotel bar in Spain some years ago, I got chatting to a very nice chap from Rotterdam. I say “nice”, he did admit to having one major problem with the British…

“My one major problem with the British,” he began, “is your ridiculous obsession with bricks and mortar.”
“The fact that you spend the best years of your lives with a financial noose around your neck is a great source of amusement to us Dutch.”

“Just rent!” He said, with a wide arm shrug. “Don’t be so hung up about owning… It’s still somewhere to live, after all… and you’re free to come and go as you choose.”

After my laid back Dutch chum laughed-off my desperately unoriginal “dead money” argument, I had to concede he had a point.

Maybe the Dutch, and while we’re at it, the Germans, French, Italians and Spanish have got it sorted. You see, by and large, they all rent the property they live in. My German neighbour says her parents back home are horrified that she’s about to buy a place in Chiswick. Nothing to do with the West London suburb, it’s just that the idea is considered lunacy in Germany. She daren’t tell them how much it’s going to cost her.

Likewise when a previously home owning friend of mine moved from the Midlands to Milan a couple of years back, buying was never an option out there. Incidentally, he’s back now and continues to rent in the UK. Why? He doesn’t believe in the property market here, at least not for the moment, anyway.

So where is this leading?

Well, lots been made about the fact that first time buyers are now all but totally squeezed out of the UK housing market. Housepricecrash.co.uk reports that in just 10 years the number of first time buyers has gone from 55% of the market to just 29%. Now it seems that the middle rung of the ladder is more elusive too. Many mid income families can no longer afford to upgrade to a bigger house in the same area.

Homeowners wishing to ‘buy up’ the chain face a stark choice: either stay put and chuck stuff out, or move to a less desirable neighbourhood to give yourself a bit of extra elbow room. Or, I suppose, like my friend, or me for that matter, if you want to stay where you’re happiest, you can just rent. After all, as they say in Rotterdam, what’s the big deal?

Advantages of renting over buying property: High gearing
Wholesale renting is still a weird concept to us Brits. But despite this, the UK is awash with landlords at the minute.

Now traditionally, these were wealthy people with large property portfolios.

Nowadays everyone’s doing it. Easy cash has made it a cinch for folk like you and I to play ‘Monopoly’ for real.

Advantages of renting over buying property

The figure for Granada is the highest in Andalucia: 40 per cent of the population come from other provinces in Spain or abroad

Malaguenos by adoption. It’s a phrase that is commonly heard to refer to people who have come from other provinces, and even from abroad, but are working here and bringing credit to the province of Malaga. Now population studies have revealed that these people constitute an important percentage of the population of the province, and their numbers are increasing.

Figures published by the Andalusian Institute of Statistics show that last year almost 35 per cent of the inhabitants of the city of Malaga, around 200,000 people, were born outside the province.

This trend has been growing in recent years, especially as far as the arrival of foreigners is concerned. It is a result of the vast amount of economic and urban development on the Costa del Sol, as well as successful appeals for foreigners to register with the local authorities. The figures were especially given a boost when the opportunity was given for many illegal immigrants to get legal papers in the country.

In five years the number of people living in the city of Malaga who were born outside Spain more than doubled. It went from 20,000 in 2000 to almost 45,000 in 2005. However in the same period the number of people from other provinces in Andalucia and other parts of Spain remained stable. Around 50,000 people living in the city of Malaga come from other municipalities in the province, 45,000 from other provinces in Andalucia and a slightly higher number, 45,700 from the rest of Spain.

The high percentage of the population from elsewhere is much more marked on the Costa del Sol. Because there are no hospitals in many towns the point of reference is not being born in the town where one lives, but in the same province, and this is considered as being “local”.

On this basis in Marbella, where the number of people on the census is 125,000, only 45 per cent were born in the province and almost 31,500 are foreign. In Fuengirola the figures are even more marked: forty per cent were born locally and 21,000 outside the province or abroad. The figures are similar in Benalmadena : 60 per cent of the population come from outside the province (14,000 of them from abroad).

Torremolinos is a special case; the residents who live in the town but work in the city of Malaga and the foreign residents form a large percentage of the total. Even so, 55 per cent are local.

Nonetheless, the fact that so many citizens of other EU countries fail to put their names down on the census means that real figures everywhere are even higher.

Full story from SUR in English

There’s a new way of instantly finding out about your ideal Spanish properties on Kyero.com - without receiving a single email. A little thing called RSS is responsible for this - but don’t let that put you off!

If you have a Hotmail, Yahoo, Gmail or AOL email address, it’s now incredibly easy to have Kyero.com update you automatically about new properties that you’re interested in - as soon as they become available. The property on the left appeared in my Yahoo home page as soon as it was added to the Kyero.com database.

I simply told Yahoo what kind of properties I was interested in and the magic of RSS took care of the rest. It will automatically update itself as properties are added or taken off the market - without me doing anything further, ever.

This is not restricted to Yahoo account holders either - AOL, MSN and Google accounts all have a similar way of keeping you up-to-date about things that you are interested in. All of this, without you receiving a mountain of email and without visiting lots of different web sites. It’s the equivalent of having someone clip all the best bits out of all your favourite magazines and newspapers and pasting them into a scrap book just for you - and then delivering it to your door.

It’s a brilliant fit-and-forget solution that really does make your life easier so, now is the time to bite the bullet and give it a whirl - here’s how ..

First, search Kyero.com as normal and refine your search until it’s as close as possible to what you’re looking for. Now, on the left-hand-side of the property results page, you will see a box that looks like this –>

It contains four buttons - one for each of the accounts that we’ve already mentioned. If you have a Yahoo account - click the Yahoo button - it’s that simple. If you don’t have one of these accounts yet - click any one of them and you’ll be able to set one up for free at the same time as telling them about your property requirements.

You can repeat this process as many times as you like - perhaps adding different searches for properties for sale or long term lets? Maybe you want to keep an eye on the latest properties in different regions or towns and compare prices? Possibly, you know exactly what you are looking for and just want an easy early notification of new properties?

RSS is the technology that makes all of this possible and it’s an industry standard. You’ll find the BBC using RSS to keep you updated about your favourite TV or radio programmes. We use it on this news page to update people with the latest Spanish property news. RSS is just the ‘plumbing’ behind these services - now that you know about it - just look for the little orange RSS logo and add your favourite content to your favourite home page.

British expats are increasingly opting to buy homes in Murcia and Almeria instead of the traditional areas of the Costa del Sol and the Costa Blanca, according to a new study published on Wednesday.

The report by Barclays Bank and the IESE business school said previously popular areas for the property, tourist and expat services were reducing in areas like Alicante and the Costa del Sol.

Instead, expats and tourists alike were more interested in areas like Murcia and Almeria, said Maria Pin, one of the investigators from IESE.

Currently, Murcia has the fourth highest number of British residents, after Alicante, Malaga and the Balearic Islands.

There are 8,562 Britons with residence cards in Murcia, 5.7 percent of the British residents in Spain. But the number of Britons paying social security in this area rose to 1,470 until 31 January. This shows a rising number of Britons are starting their own businesses in this area.

The Murcia chamber of commerce estimates that 83,686 new homes will be built in this area by 2007 and the population should rise by between 200,000 and 250,000. Murcia has become popular because of the lack of over development and the “benign” climate.

There are good transport links and it has 250 km of relatively unexploited coastline, said the report. Investors have spotted a good area to build golf courses, which do not cease to attract Britons.

In Almeria, the study said there was still space to develop more homes.

Now there are 183,328 homes, of which 32.3 percent are second homes owned by foreigners. In total, Britons form the biggest European expat population in Spain.

There were 270,000 registered with authorities until 2006, a rise of 19 percent from the year before. Of these, 90,000 own their own homes.

Story from Expatica.com

The essence of past legends and poems comes alive again by night. Admiration and amazement on each corner remind us of the Moorish past of Granada. There are lots of places to visit and stroll through, and an endless day makes it easier to dive into the cool night of “tunas” (musical groups made up of university students), bars and the hustle and bustle of the city. If you really want to get to know Granada, you must walk through the whole city, in pursuit of the shadow of the poet Garcia Lorca, listening to the universal music of Falla and discovering its history on every corner.

Located at the foot of the highest mountain range in Spain, Granada has one of the most outstanding Renaissance works in its cathedral. This monument, with its five naves, stands out on account of its Royal Chapel, which houses the graves of the Catholic Monarchs, Joanna the Mad, and Philip the Handsome. In the museum of the sacristy you can enjoy looking at paintings by Van der Weyden, Botticelli and Berruguete, as well as objects such as King Ferdinand’s sword and Queen Isabella’s crown and sceptre.

Another symbol of Granada is the historical quarters of Albaicin, on the hill facing the Alhambra. These quarters hosted the court of the Zirid dynasty in the 11th century. The remains of the walls of the Alcazaba (citadel), the Gate of Elvira and the Arco de las Pesas give evidence of this period. Other places of special interest include churches erected over mosques, with Moorish vestiges, such as the Church of San Salvador and the Church of San Juan de los Reyes, which preserves two unique minarets of the Nasrid period.

The Sacromonte Caves represent a picturesque feature of this Andalusian city. Any tourist route must include a stop in this place, which has given shelter to lots of gypsies for centuries. The flamenco shows with singing and dance offer a marvellous display of its unimaginable intense and colourful atmosphere in its purest state. On this very mountain, visitors will find the Sacromonte Abbey, built on the site where in 1594 Moorish treasure hunters found the well known lead plates with engravings by saints persecuted in Neron’s times.

As regards Granadas’s gastronomy, the weather and geographical variety of the province have given it wide diversity and richness. From the mountains comes the well known ham from Trevelez, which is cured in the snow, whereas in Las Alpujarras Chicken in Tomato Sauce and Migas Alpujarrenas (a dish made of fried bread crumbs) are the most famous dishes. Espetones (barbecued sardines) stand out on the coast, and in Granada visitors can taste the Tortilla Sacromonte and fried beans with cured ham.

The easiest way to reach this province in Andalusia is by plane, since the airport is only 10 kilometres away from Granada. The great weather conditions for winter sports and its closeness to the Mediterranean coast make this city a perfect destination to visit at any time of the year.

Full story from Spanishpromotions.com

THEY are known as the “Por Favors”, among their Spanish neighbours. They are the Britons who have bought a place in Spain but whose knowledge of the language extends only to a few words, like por favor, Spanish for please.

But help is at hand for those who suffer from our famous ineptitude with foreign languages. Calidona, a Spanish property company, is paying for local councillors in one part of Murcia, southeastern Spain, to have classes in English. The idea is to make living alongside their neighbours, from Britain or Germany, easier.

At the tiny village of Gea Truyols, near Calidona’s huge Corvera Golf and Country Club development, foreigners outnumber Spaniards, so the lingua franca is English. Communication is limited to waving hands, drawing unintelligible sketches or resorting to dictionaries.

Valeriano Perez, Mayor of Gea Truyols, admitted that it came as a shock to some of the older members of the town council. “For us it is hard to learn a new language, but it does make sense because we need to deal with planning applications and explain them to our neighbours,” he said.

The move is symptomatic of a growing move among developers and estate agents to provide property buyers with more than just the bricks and mortar. Increasingly, companies are realising that many Britons do not simply want a holiday home to visit for two weeks; they may want to up sticks and live there permanently, so providing ways to help buyers integrate with Spanish society can prove an attractive draw for potential investors.

The larger developers are providing after, sales guides to schools, health care, taxation, guides on how to start a business and the background to aspects of Spanish society like bullfighting. In southern Spain, Andalucian Dream Homes publishes a magazine to show prospective buyers what life is like for people who have settled in Spain, or how it could be for them.

Cary Johnston, editor of Dreamlife magazine, says: “The idea is to give a people a feel for life here and how some have made their lives here, with features on the type of businesses, how people make their money and get into Spanish life.”

In some parts of Spain, where regional languages are spoken, authorities even offer free lessons in an effort to help British buyers to settle in. In Catalonia, in northeast Spain for instance, Catalan classes are free.

Though most foreigners will speak Spanish as well as their own languages, if their children go to local schools, they will learn Catalan. So if their parents want to help their children with homework, they may benefit from knowing some basic Catalan. Analysts believe this is part of a new trend that could give developers a competitive edge in the near future. Perhaps, more importantly, for buyers, it might be just what they are looking for.

And there is already a new model of Spanish tourism to replace the traditional “sun, sand and sangria”. Now, many Spanish newspapers report how Britons and other foreigners enjoy sun, sand and salud (health). They buy their second homes near decent hospitals and come to Spain to avoid lengthy waiting lists at home.

Full story at the Times Online

Retiring to a place in the sun is a reality for an increasing number of people. More than 1m Britons have their pensions paid overseas, with 74,000 receiving their pension in Spain alone (compared with just 26,700 a decade ago), according to new figures from the Department for Work and Pensions (DWP).

But setting up your finances properly is as important as choosing the right villa. Get it wrong and you could be paying tax where you do not need to, forking out commission where it is not necessary and footing the bill for expenses you had not foreseen.

The situations can be very different depending on where you retire. Here are some factors to consider if you are heading for Europe’s most popular destination.

Taxation

Generally you will be taxed wherever you are resident. The taxation of expats is complicated, but as a rule of thumb you will continue to pay UK taxes as long as HM Revenue & Customs considers you to be a UK resident. You will remain liable for British taxes if you spend 183 days or more in the UK, or your visits to this country average 91 days or more a year over four years.

Double taxation agreements with Spain, Italy, France and Portugal mean you will not be taxed twice on the same income and that you can ask for UK income that is normally paid net of basic rate tax to be paid to you gross. Such payments include interest on bank and building society savings accounts, as well as income from bonds, pensions and annuities.

If you become non resident in the UK for tax purposes, income, wherever generated or paid, will be liable to tax in your new country. Tax rates range from 15 per cent to 45 per cent in Spain, from 0 per cent to 40 per cent in France and from 10 per cent to 42 per cent in Portugal.

Experts say that for people with a mid range retirement income there is little overall difference between the amount of tax you will pay in France, Italy, Spain or Portugal compared with the UK, but, depending on your personal circumstances, it may be beneficial to receive any UK income such as pension or interest on savings gross, without deduction of UK tax.

Full story from the Telegraph

Tell them it’s a windy dump, that everyone is uptight and you can’t find a property for love or money.” From Adrienne Gabriel’s smile, it’s obvious she is joking. “Actually, life here is so good that sometimes we fret about the impact of more newcomers, of word getting out,” she explains.

Gabriel, 42, originally from South Africa, moved to Tarifa from Malibu 18 months ago with her British husband, Nick, and children Grace, 3, Alexa, 7, and Sasha, 9. The family upped sticks when Nick, 42, was headhunted by an internet company based in nearby Gibraltar. “For the kids, it was total submersion. We put them in a local school and they were speaking fluent Spanish within four months,” says Gabriel.

Tarifa is the southernmost town in Spain, and the views of Morocco, just across the Straits of Gibraltar, are spectacular. For Gabriel, who has also lived in Wandsworth, south London, proximity to the continent of her birth is appealing: “We are just 35 minutes by boat from Africa, so we can go across to Morocco for lunch.”

The only problem, and it’s a big one, is an acute shortage of properties for sale in and around
Tarifa . “We’ve been househunting for a year now, but there is so little on the market and the prices are insane,” explains Gabriel.

Even with a €1m (£685,000) budget, the Gabriels have been unable to find a detached property in a semi-rural residential area that matches their requirements. “Five years ago, the three and four bed properties we are looking at might have cost a few hundred thousand euros; now they start at a million,” says Gabriel.

Frustrating as it is for would be buyers like the Gabriels, the reason is obvious: in recent years, there has been very little new construction in the town, pending the approval of a new urban plan. But while developers have held back, demand for property has exploded, driven by a radical transformation in the town’s fortunes.

Once part of the hippy trail, Tarifa spent decades in the doldrums, with little local industry and beach tourism driven away by the strong winds that blow through the straits. Consequently, there was no demand for new homes, while the ancient buildings and walls of its old quarter were left to crumble.

Over time a windsurfing community put down roots, attracted by the very winds that discouraged tourists. Fantastic windsurfing, and then kitesurfing, put the town on the map as a place where surfer dude meets hippy glam.

The result is that Tarifa is now achingly cool, full of beautiful people with athletic, tanned bodies. Dreadlocks and designer brands abound, and the place even has its own style of music, a rhythmic, exotic blend of Arab, ethnic and flamenco. The only other place in Spain that can compete with it for this kind of happening, young, affluent scene is Ibiza.

Tarifa’s youthful niche appeal has attracted property buyers who feel comfortable in this environment, and who don’t mind the wind. While other Spanish coasts attract fiftysomething British couples looking for a place in the sun to make their pensions go further, the area attracts younger couples.

Full story from Times Online

ONCE upon a time the only Britons heading for Spain were those who were planning to retire there. Not any more. Today, a growing number of younger people are moving to the country to set up their own businesses. Indeed, Spain is now one of the most popular places for people to launch their own start up.

“The number of people looking to set up business in Spain is increasing all the time,” said Jose Morillo, director of investment at the Spanish embassy. His department gets 1,500 enquiries a year.

While the image of Brits buying pubs or bars on the Spanish coast still holds true, Morillo said people are going into a whole range of sectors, including construction, hairdressing, retailing, information technology and leisure, with scuba diving being particularly popular at the moment.

Setting up a business in Spain is straightforward, but it can be time consuming making sure you have all the correct forms and licences. And there is the language barrier if you are not fluent in Spanish.

One person who knows the perils of setting up a business in Spain from both sides of the coin is David Fairweather. He and his wife, Lorena, moved out to Malaga two years ago.

Fairweather, 52, had built up and sold a computer systems integration firm. He had no experience in the property industry but decided to set up a business called Bars in Spain (Barsinspain.com), which caters for expats looking to buy bars and restaurants in Spain.

“There are many British people coming here hoping to run a bar or business who get ripped off or who don’t know what they are getting into. They come to live the dream but it can go badly wrong. It’s like the Wild West out here.”

A largely unregulated property market means it is easy to be lured into costly decisions by unscrupulous estate agents. A client of Fairweather’s once lost €30,000 (£20,600) by buying a property that did not include the freehold.

“Lots of people don’t do enough research,” he said. “They think they are going to be sipping cocktails with their friends all day, but the reality is 18-hour working days”.

“Some make a good living from it, but others last just six months before calling it a day.”

And you could also be in for a culture shock, warns Fairweather. “It’s the manana, manana syndrome. In Spain things get done tomorrow rather than today. It can take a bit of getting used to.”

Buying an existing business is one of the easiest ways of getting into the market.

Full story from the Times Online

Swapping a massage for an English class helps expats to integrate into Spanish society.

It started off in the United States as a way of exchanging skills for free.But now ‘time banks’, as they are called, are being used by expats as a way of integrating into Spanish society.

The idea has caught on in the town of San Javier, in Murcia, south-east Spain.

But it could soon spread beyond there as more and more expats appear to tire of remaining in their ghettoes watching satellite television and instead want to discover Spain.

Spaniards are also keen to join in the experiment in San Javier.

So, after three years, the town’s time bank has 300 members, who range from artists, doctors and engineers to architects.

Fifty of the ‘account holders’ are British expats. “Yo te doy masaje; tu de das ingles” (I give you a massage, you give me English) ran the headline in the Spanish daily El Pais, as it explained how people were exchanging their skills for whatever anyone else wanted to learn.

Jose Carlos Valsera, 36, a black belt in kung-fu, gives classes in Tai Chi.

In return, Maureen Bassett, a retired British expat, gives Jose classes of English. Maureen said: “This keeps me active, is a lot of fun and I get to meet people I would never know.”

The time bank in San Javier, is run by a volunteer from the local council, Querubina Merono. He says: “The World Health Organisation defines health by physical, psychological and social factors. But many people leave that last part out.

“The time banks fulfil that last role, generating social capital which would be impossible to pay for. They also produce an environment in which all are winners.”

Just like a normal bank
The way the system works is whenever someone uses the bank by exchanging a service, be it Tai Chi, English or even a massage, they register this with the bank, noting the amount of time ‘deposited’ and ‘withdrawn’.

The San Javier bank was formed by Ana Molina and Rafael Gonzalez, who started off by spreading the word door-to-door.

This keeps me active, is a lot of fun and I get to meet people I would never know - Maureen Bassett, retired British expat, San Javier, Murcia
The secret of its success lay in older people passing on their knowledge to the young who may have missed out on basic skills.

Naima Khlifi, a Moroccan pensioner, goes to the home of Adriana Martinez to gives classes of Arabic. In return, Adriana gives her jogging lessons, to keep her fit.

The first time bank to start in Spain was in Barcelona in the late 1980s.

Full story from Expatica

Maybe you have seen them on Spanish property websites; you certainly know them from travel documentaries and photographs of Spanish old towns,the traditional town or village property: very pretty, with little balconies and flower pots with trailing geraniums, and possibly some planted pots outside the wooden front door.

If you dream of owning one of those properties there is good news, as they are still affordable and usually quite a lot cheaper than your typical apartment in a beach resort. That is if you compare the price per square metre, as you do here in Spain. If you are prepared to do some renovation work yourself you might even be able to get a real bargain.

So what is it like inside these houses? Of course they are all quite individual, but some characteristics are widespread: A lot of them are very narrow, some only nine to ten feet. A lot of them are also deep; some even have entrances on two streets. Combine these two features and what you often get is quite a dark property (especially if you are after one of the mid terraced houses that also back onto another property). Corner houses are usually brighter. But then this is part of the charm of these Spanish houses and it is said that the lack of windows in combination with thick walls keeps the houses cool in summer.

Another feature, well known from the English cottage, is low ceilings. To be fair, quite a lot of these Spanish houses actually have quite high ceilings, especially if you go for the grander (and more expensive) ones. But if you enter a property of the quaint variety you should worry about your head if you are over, say 5’8. Especially stairwells can be a constant worry for the taller inhabitants.

If you add to this the fact that a lot of the Spanish village houses have three or four floors (plus roof terrace), you might want to consider buying a hard hat. And joining a gym of course, as you should be rather fit if you want to live in one of the taller properties.

So why would anyone in their right mind want to live in these houses? It probably boils down to character and atmosphere: A lot of these Spanish properties have lovely original features, like wooden beams or exposed stone walls. And even if they don’t, it is usually possible to re introduce at least some of them back into the property quite easily. Those roof terraces are simply fabulous, especially if you get one with a nice view. And you are part of the old town of a traditional Spanish city or village, which gives you surroundings and a feel of community you simply cannot get in a resort or a modern apartment block.

To sum it up: Life in a traditional town houseSpain might not be everybody’s cup of tea, but there seems to be a growing number of people who appreciate this way of life and put a lot of love and effort into the renovation of their Spanish dream home.

Story from britishexpats.com

As the European Central Bank’s policymakers gather in Madrid today to consider another rise in interest rates, they will also get a chance to experience first hand the enduring paradox that is Spain’s buoyant economy.

The bankers will fly over a sea of construction cranes before landing at the brand new, Richard Rogers designed terminal at Barajas airport. A waiting fleet of limousines will take them past new suburbs that have sprung up during Spain’s unprecedented building boom.

More than 400,000 homes have been built in and around Madrid in the past five years, in part to accommodate 1m immigrants who have settled in the capital.

The traffic above ground will be slow and ill-tempered. Thanks to plentiful consumer credit at negative real interest rates, there are 3m more cars on the road than five years ago.

“There are two factors sustaining Spain’s economic growth,” says Jose Luis Feito, a Spanish economist. “The first is low euro interest rates, which have been lower than Spanish inflation since 2002. The second is immigration, which has moderated wage growth while increasing demand for all kinds of goods and services including housing.”

The Spanish economy is in its 11th year of uninterrupted growth, making it a rare bright spot within an otherwise sluggish eurozone. Spain expanded by an annualised 3.5 per cent in the first quarter of 2006, compared with the eurozone average of 1.9 per cent.

Signs of overheating have been evident for some time. House prices have risen by 150 per cent since 1998, even though the housing stock has doubled over the same period. (Spain consumes half of all the cement in the European Union.) The country’s inflation rate of 4 per cent is the highest in the 12-nation eurozone, leading to a dramatic loss of competitiveness against its main trading partners. The €67bn ($86bn, £46bn) current account deficit is the second biggest in the world after the US in absolute terms, and the world’s largest in relative terms, at 7.4 per cent of gross domestic product.

For some time now, economists have warned that growth based on a property bubble and a consumer spending spree, both fuelled by cheap credit, cannot last. Concern deepened when family indebtedness reached a record 115 per cent of disposable income at the end of last year, according to the Bank of Spain.

Full story from the news.ft.com

Following reports last week that victims of the LRAU in Valencia may take their case to the European Court of Human Rights (ECHR), professionals in the Spanish property market have expressed concern over continued negative press.

Brenda Waddington, of Rusticasa Spain, called for more accurate reporting and researched claims to ensure that the general public is not frightened by “inaccurate and misleading sensationalist articles”.

“I know of cases where new development plans affected people who benefited financially from the deal they were offered,” she said. “It doesn’t take a lot of intelligence to deduce that if local government officials are being taken to court accused of corruption because they bought rustic land that was going to be declared urbanisable, that re-classification can be very good news and highly desirable for some people.

“I am also aware that many people involved in so called land grab situations actually have properties which were built illegally, which do not appear on official plans, and which could be subject to demolition in any case. These properties are invariably built on plots far smaller than the legal minimum requirement for rustic land of 10,000m2. An example is Catral, in the Vega Baja area, where 3,000 illegal houses have been built over the last three or four years. The Mayor is attempting to legalise them by re-classifying the land as urbanisable rather than demolish them. However, roads will need to be widened, sewage treatment plants built, and other infrastructure provided. This land contribution and cost will most likely have to be provided by the owners of the illegal properties - better than demolition, surely.”

Steve Hughes, of Spanish Choice, also pointed out that there were many satisfied clients in Spain but stressed that a more thorough approach is needed in this market to protect their interests. “The awareness has been raised because the Spanish government has at last got its act together and is certainly sorting out local area government offices with a fine tooth comb,” he says.

“We believe there should be some organisation here, not only for the protection of the buyer, but also the agent. Our company relies on our excellent firm of lawyers when dealing with developers and vendors; they will check with the local planning office and beyond to the architectural college of either Madrid or Seville to make sure before we sign collaboration agreements that everything is in place. If it is all in order we will advertise property on our website and press; if not, we will certainly not entertain the prospect.”

Making the point that thorough and independent due diligence should be a minimum service offering for clients, Highes concludes by saying: “By having a good firm of lawyers working for us, and with us, we can offer our clients the right development or resale with no nasty shocks along the way. I agree that some agents should be looked into by a governing body to checkout their practices, not only for the clients benefit but for the people who move here and wish to work.”

Martin Dell, of Kyero.com, believes that misuse of the LRAU is the “single biggest limiting factor on the growth of the Spanish property market” and highlights a recent report in the Financial Times that warns foreign buyers that it is legally possible throughout Spain. “It’s clear from the article that the initial Land Grab legislation (LRAU) has been replaced by an equally unjust law (LUV) and that neither take into account the basic expectations of property ownership that the rest of Europe take for granted,” he says.

“The fact that the regional government in Valencia are doing nothing to stop this mountain of bad press is indication enough that they are not the right people to solve the problem. Action groups within the region have already collected 17,000 signatures protesting the abuses, apparently falling on deaf ears locally. In my opinion, this needs to be solved at a national level and that pressure needs to be brought to bear by influential parties within the business community on their respective governments. This short-sightedness on the part of Spain will not only damage their own economy but will tarnish the image of overseas property in general, particularly within Europe.”

This point is echoed by an agent based in Murcia who blames a ‘political’ planning system. “The general mentality of the Spanish (if you can say that) is not very used to consistent government, whether on national, regional or local level. Today’s national government cancelled an already started project of a water canal from the river Ebro to the regions of Murcia, Alicante and Almeria like it never existed. Proper government should honour decisions made by the previous governments and not just stop them because they have obligations to regional votes in order to maintain their parliamentary majority.”

Dell does see some hope in the recent efforts made by the government to clean up corruption in Marbella, however. “The recent indictment of leading politicians in Marbella and the subsequent witch-hunt for illegal construction projects is at least an indication that Spain wants to behave like a grown-up. Today, however, there are real homeowners suffering real turmoil and having their homes ‘stolen’ from them in Valencia and Alicante. Action therefore must be swift and effective if the Spanish property industry is to survive and recover from this infantile relationship with its constructors.”

He goes on to say that the Spanish and British governments should call a “cease-fire” while new planning laws are thoroughly investigated and a workable alternative to the LRAU agreed upon. “During this period, land repossession must stop completely and the principle of retrospective compensation must be unconditionally agreed upon,” he says.

Urging the property industry to get behind a solution that would protect UK buyers in Spain, Dell concludes by saying: “I believe the AIPP is in a great position to kick-start this process with our own government as the voice of international property professionals in the UK. Such interaction with the UK government would benefit those affected in Spain, the AIPP and its members.”

Having raised this issue at a recent AIPP meeting, the association has now decided to launch a campaign to address LRAU abuses in Spain.

Full story at The OPP

According to the latest quarterly survey by the Barcelona Chamber of Urban Property, rental rates for properties in the most sought after districts of the city have risen in the past year by almost 40%, and estate agents say that this rise is being reflected in property prices.

The district that attracts the most interest from foreign buyers and tenants is the Ciutat Vella, including the Gothic Quarter to the east of the emblematic Ramblas, where monthly rentals have gone up by 39.3%. The average rental for an apartment here now averages 14.8 euros per square metre, higher even than in the fashionable area of Eixample, where most of the famous Art Nouveau buildings, are located. Properties in the old city tend to be quite small, with a median area of only 68 square metres, and these have now broken through the 1,000 euros per month level for the first time. But the rise is not being seen throughout the city, especially in less historic areas, where properties are larger. Indeed in the most expensive residential areas, such as Les Corts, Sarria and Pedralbes, where the average apartment goes for around 1,600 euros a month, rentals are stagnating or have actually fallen.

Although there is no recent survey of sale prices, estate agents are reporting that properties in the old town are continuing to increase more sharply than elsewhere in Catalunya. One major agent told Kyero that these increases in rentals and property prices are mainly due to the interest shown by foreigners. This includes those needing accommodation while they work or study in the Mediterranean’s most vibrant city, as well as purchasers of second homes or buy-to-let properties in what is one of the top two or three city-break destinations in Europe.

In 2004 municipal authorities announced a crack-down on owners of unregistered rental properties, starting in the Ciutat Vella, and introducing harsh new standards, including a 24 hour concierge service for each property. But these rules are being seen as unenforceable and even illegal, as indicated by the large number of privately owned apartments in the heart of the old city currently on offer through the Internet.

By Roger Cooper

Waiting lists for solar panels due to the rising demand for sustainable energy

The law demands that all new buildings after 2007 must have solar panels installed

Distributors say that demand has doubled and that most new clients are young people.

The sunshine most of us have come to the Costa del Sol to enjoy is fast becoming a major source of energy. Black solar panels can already be seen on rooftops all over the province of Malaga, in large towns and cities and in small villages, and as a result of a new solar energy law soon to come into force, many more of them will be seen in the future. They can be installed on open terraces or any other part of a house, and will function to perfection as long as they are facing south.

Solar energy has a great future in Spain. The Council of Ministers approved a new Technical Building Code last March, making the installation of solar panels on new buildings after 2007 obligatory. The aim is to conserve energy, mainly by heating domestic water supplies, although in many municipalities in the province of Malaga, such measures have already been taken.

The reason for such interest in solar energy these days is largely due to the rising price of traditional energy sources such as electricity, oil and gas, given that the heating of water is one of the principal costs in any household, especially in a region where showers are frequently taken more than once a day. Demand for the installation of solar panels is such that there is now a waiting list, with new requests for installations taking an average of a month to comply with.

Ramon Alvarez, an industrial engineer in Novasol, one of the companies approved by the Junta de Andalucia, confims that the number of solar panel units it has installed over the past year has doubled. The company is currently installing 1.000 units in the year, but is expected to install 2,000 a year after 2007. “We have had a huge increase in requests for information on solar energy, especially from building companies and architects’ studios. There is also a great deal of interchange of information, techniques, budgets and systems,” he says. But most of the company’s clients are still individual home owners, he adds.

Among the biggest incentives to save energy are the grants offered by the Junta, through its Prosol programme, which cover 35 per cent of the total costs involved. The only problem is that the installation companies have to discount this amount from their costs, and then have to wait for up to three years to get their money back from the regional government. “The paperwork can take forever, and the government is always late in paying. The companies themselves have to bear the cost of these delays,” says Jesus Valenzuela.

Full story from SUR in English

IN a swoop on what police are describing as a ‘massive’ timeshare scam, eight people have been arrested in various parts of Andalucia, four South Africans and four British men. Belgian and Norwegian nationals are also believed to have been detained.

The early estimates are that as many as 15,000 members of the public may have been defrauded. Spanish police say they ‘beheaded’ the multi-million-euro criminal organisation by swooping on the ringleaders.

According to police sources, the fraudsters set up in business on the Costa del Sol in the year 2000, since when they have netted more than 18,000,000 euros in profit, using 300 different businesses and 1,000 employees in the process.

‘Operation Trafalgar’, as police have named their crackdown, has resulted in eight arrests so far, with all of the individuals being granted bail with strict conditions when they appeared before a judge. It seems that, after setting up their organisation in the Canary Islands, the con men transferred the entire operation to the Costa del Sol, where they had offices in Fuengirola and Mijas.

They targeted victims in Britain, the USA and central Europe. The complex deception had various elements to it, but the main thrust of the criminal operation was to ‘skim’ money off from members of the public who already own timeshare property. Telesales staff would cold-call timeshare owners, offering to market the apartment on the owners’ behalf. Then a bill would be presented, supposedly for legal and tax costs. Because the criminal organisation was fully registered as a Spanish company, many ordinary timeshare owners paid up, without realising that they were being duped.

The next phase of the scam was to ‘sell’ the same timeshare to several victims at once. Because the fraudsters had no direct connection with the properties, it mattered little to them that apartments were double-booked and families’ holidays ruined. They even had the cheek to ask for money from their victims, claiming they would take legal action against the ‘con men’.

It was not long before complaints reached the ears of the Spanish police, and the crooked timeshare operation began to feel the heat in 2001. At this point the ringleaders restructured their fraudulent business, interposing middle-men between themselves and the public, but retaining total control of the bank accounts.

The euro weekly news on-line

70 per cent of Homes on the Costa foreign owned

Abc reported that 70 per cent of the demand for tourist homes on the Costa del Sol stems from foreigners and the remaining 30 per cent is made up from national demand, according to the latest study conducted by Aguirre Newman on the tourist home buyer market of the Costa del Sol. The tourist market has even started to grow in Murcia and Almeria, recognised as emerging areas with competitive prices. The survey also shows that the rate of growth in the supply of new housing has dropped compared to the past five years; the Costa del Sol registered a slow down in the sale of homes, particularly once summer started. The lowest number of sales was most significant in Marbella and its surrounds, caused by the demand for homes already satisfied, the high price levels reached and the uncertainty over the political and legal environment.

Older generation have a House, but little Money

El Pais ran a story about Spain being ranked within the European Union as the fifth highest in terms of population age; that is, 17 per cent of the population is 65 and older. By 2050, this figure will rise to 30.8 per cent, at which point it’s estimated that it will rank as number one. For 80 per cent of this older group, their principal source of income is their public pension through Social Security payments, at roughly €700 per month. Poor in capital perhaps, but rich in heritage, most own their homes outright, homes which have increased dramatically in value as property prices have risen so much since they were purchased. There has been a push for recently created financial products such as reverse mortgages (giving people over 70 the opportunity as home owners to use the equity in their homes to receive an income for life without sacrificing their home). However, there are other alternatives for this older generation, including retirement complexes, generally located along the Mediterranean coast and in city centres. In both cases these come equipped with 24 hour medical back up and domestic help.

Protected housing levels not containing house prices

El Mundo reported that there are many sources which have said that the prices of normal housing in Spain would stabilise if more protected housing was built. Javier Buron, Director of Planning and Financial Management within the Department of Housing of the Basque Government said, “Normal housing in Spain has nothing to do with protected housing because its prices are set independently of the number of houses which are protected.” According to Buron, the financial system and the big market operators are the ones which determine the prices for normal housing. “At the moment in which a person with a salary asks for a loan and the financial institution provides that up to a set level, this sets the price of the house” he stated. For Buron “the true method for containing house prices is to establish a system of control over mortgage lending as they have in France, where loans worth more than 30 per cent of deposits made by the borrower are just not permitted.” The reality is that in the last few years, the construction of protected housing within the Basque Country has been four or five times the national average, but normal housing continues to be amongst the most expensive in Spain.

An estimated 5.3 million Spaniards have short term contracts. That represents about a third of all Spain’s salaried workers, more than double the rate for the EU as a whole.

Unions say Spain has more workers on temporary contracts than Britain, Italy and Belgium put together.

The new employment law offers companies various incentives for creating permanent contracts. For every temporary contract that a company changes into a permanent contract by the end of 2006, the firm will get 800 euros reduction in the annual social security contributions it pays, for a maximum of three years.

Spain brought in short-term contracts over 10 years ago to curb an unemployment rate of more than 20 per cent. But employers’ organisations admit the measure has been abused, and the Zapatero government regards fixed-term contracts as a handicap to productivity.

To qualify automatically for a permanent contract, workers must have had at least two temporary contracts with the same company in the same job for more than 24 months within any 30-month period.

The latest survey carried out by the INE (National Institute of Statistics) regarding the Salary Structure interviewed over 215,000 salary earners and 22,000 work centres. This study provides us with reliable data concerning how salaries are distributed in Spain. As in all job markets, age, education and training, gender, type of company, length of service, different types of contracts and working days are the main variables.

According to the survey, the average annual gross salary in Spain is €19,802 per worker. However, we must also take into account that the most common average salary works out at roughly: 12,000 euros, more than 7,000 euros under the average figure.

A fact worth highlighting is that in most cases, the men in our country are still earning a higher salary than women. Women’s salaries stand at 71% of male salaries. Something else to come out of the study is that the Spanish are the workers with the best salary, and this is only exceeded by foreign workers coming from the United States or the European Union. The rest of the nationalities earn a salary that stands at least 25% below the average salary.

Length of service in a company and the level of responsibility of the job go hand-in-hand with higher salaries. Academic studies are also important when it comes to determining salary rankings. Workers without studies or without Primary Education end up earning a salary that is 35% below average. With a higher level of studies, the average salary gradually increases.

Types of contracts, very much in the news nowadays owing to their transient nature, are a determining factor regarding salaries. Contracts for specific services mean that the annual salary for workers is 40% lower than those with an indefinite contract. As for apprentices, mainly in the commercial and catering sectors, salaries usually reach the minimum Inter professional salary, regardless of the sector they belong to. In figures this amounts to 64.4% lower than the average salary.

A final fact to be taken into account regarding the working life of workers in Spain is that they only have 22 days of holiday per year. A few days less than the average worker in other EU countries.

Full story at Spanishpromotions.com

THERE are two main reasons we head for southern Europe - climate and lifestyle. On a relaxing holiday, however, the idea of doing business there would never cross our minds.

Obviously business does get done, it’s just that the cultures of countries like Spain and Italy tend to hide it better, making work part of a larger picture, rather than allowing it to dominate the day. However, perhaps it’s the influence of the British, but some cities are becoming increasingly like the UK in their working hours, instead of taking their famous long lunches and finishing mid-evening.

The informality of Spain, for example, does not always translate into business, foreign visitors are expected to be punctual, even though they may be kept waiting. Making appointments can be something of a task too, enquire well in advance and get written confirmation. For those who choose to live and work in Spain, or anywhere in southern Europe, there can be UK-bred frustration at the length of time it takes to get action, or even a decision.

However, the reality is that an increasing number of British people are being attracted to the life in Spain, particularly if their business lends itself to remote working anywhere. With an increased choice of air routes, the distance to friends and family is lessened and the opportunities for working within Europe and beyond are even greater.

Musician and composer Ged Grimes moved from Dundee with his wife Tricia and sons Jack, 9, and Sam, 2, to Coin, a small town in Andalucia last year. It was a lifestyle choice, but the global reach of technology has eased the transition. Grimes had to move a full studio to Spain, and communications with existing clients was paramount. ‘The internet has made it possible to work remotely, but the infrastructure is not as developed inland as on the coast.’ Another aspect which is set to help communications long term is that at the moment, their closest airport is being expanded, and in 2007 the high-speed train will connect Malaga to Madrid in a little more than three hours.

Find a property for sale in Coin

In fact, many British people commute from Spain back to London on a weekly basis. The cost of living is lower there (two-thirds of the UK) but house prices are rising on a par with the UK if you are within reach of the coast. Many typical Spanish villages near the coast are now 50 per cent mixed nationality, so the invasion is coming inland.

Many people who work in Spain have previously holidayed there, but as a resident, the goalposts change. It’s rare that any meetings will get straight down to business - at first there may be a chat about you, your family and background before any business matters are discussed. There is a mix of informality and expectation of politeness. Basic titles should be used, and try to separate business from pleasure. Eating is a sociable thing in southern Europe, so refrain from bringing up business over a meal unless your contact does so first.


Story from the Scotsman.com

We’ve expanded and updated the Kyero.com Spanish Property Price Guides. There’s now more of them (24 in total) and they’re even easier to get hold of and keep updated. Check out the Price Guide download page now.

Every price guide is updated on the first business day of each month so that you can see how prices are trending over time and how different areas compare to each other. Now that we’ve added more provinces and islands, they’re even more useful when comparing property prices in different parts of Spain.

Every guide now contains an ‘update link’. To get the latest version of any particular guide, simply click the link to download it and update your current copy. Alternatively, register for the Property Pulse newsletter (using the form at the top of this page) and we’ll send you an email as soon as there’s an update available.

The guides we’ve added today cover Albacete, Asturias, Fuerteventura, Gran Canaria, Ibiza, Lanzarote, Mallorca and Tenerife.

Now that we have been able to ‘break apart’ the Balearics and Canaries into their individual islands, it’s interesting to see how each one performs in terms of the relative cost of property and how prices have trended over the past year or so.

Mallorca seems to be a strong performer but not an ideal location if your budget is limited! With average property prices almost double the national average, Mallorca has also experienced a 10% annual rise in prices overall. Properties at the low end of the market have increased in value by as much as 30% over the past 12 months!

Compare this performance to Tenerife - another desirable island destination but one that has seen minimal growth in prices and average property prices below that of the national average.

Spain is a mixture of many different markets and trends and no single figure can accurately represent the various investment possibilities throughout Spain - that’s why there are now 24 different price guides to give you that live, statistical edge in choosing where to invest.

The price guides give you all the information you need to compare prices, find a bargain and pay a fair price - download your free copies now.

From Bordeaux to Barcelona and Budapest to Bulgaria, British holidaymakers in their thousands are falling for foreign second homes.

Buying abroad has gained momentum in recent years, as homeowners dream of retiring in the sun or investing in countries with profit potential. Some 250,000 Britons own a property outside the UK.

But while finding the right property at the right price might be relatively easy, how should you pay for it? Many people simply tap into savings or remortgage their first home and pay cash up front. This is by far the cheapest and simplest method if you have equity in your current home in Britain, as long as you bear in mind currency conversion costs. Since large deposits are often required on purchases - sometimes up to 40 per cent - buyers could remortgage to pay this and then take out a loan for the balance.

But if you want to take out a mortgage in the country where you are buying, how do you go about it? Several UK lenders provide loans on overseas properties through their international divisions. Some of these lend only in sterling, while others will lend in the currency of the country if you prefer. Most specialise in key eurozone countries such as France and Spain.

Simon Conn, managing director of Conti Financial Services, says: ‘Most clients should borrow in the currency they are earning, but those who buy properties in popular countries like Spain and Portugal and then rent them out tend to arrange their mortgage in euros. This is so they can offset their euro rental income against the loan repayments.’ A further attraction of euro loans especially is that they are significantly cheaper than sterling deals. Conn says: ‘Interest rates are typically 2.5 percentage points less at the moment.’

However, borrowers who take a foreign currency mortgage need to consider how currency fluctuations can affect their repayments. Exchange rate movements may increase the sterling equivalent of your liability under a foreign currency mortgage.

Other details to ponder include the minimum purchase amounts, €100,000 in Spain, for example - and how lenders determine how much you can borrow. Most lenders in popular destinations consider affordability based on a set calculation. In Spain they will take your net income, calculate 35 per cent of this, deduct other liabilities such as your UK mortgage repayments, then use what is left to calculate what you can borrow. The self-employed are likely to face more stringent calculations.

Ray Boulger of London-based mortgage broker Charcol, which deals with clients who want to buy abroad, warns of other pitfalls. ‘The legal arrangements are very different and then there is the language issue. Never sign a contract that you do not understand. Buyers who are in the position to buy with cash should also take care not to rush in and save on legal costs simply because they are not using a mortgage. They should get a local solicitor and arrange a survey. It may cost money but it will be worth it. They need to be sure they have legal ownership of the property and that the properties have been built legally. Another issue in Spain is that you can buy a property with someone else’s debt on it - check this carefully.’

For unbeatable exchange rates and expert guidance, see Moneycorp dedicated to saving you money, on your property in Spain.

Story from the Observer