The Latest Spanish Property News from Kyero.com

The Spanish overseas property market has just been given a massive new impetus by VIVA Estates, who have taken the unprecedented initiative of slashing their resales commission to a mere 2%, while at the same time introducing an in-house conveyancing service for vendors, at the accepted market rate of 1%.

This ground-breaking move is in response to current and projected market conditions in a region where, due to overwhelming demand, property prices have more than doubled since 1997 and where vendors need to have more flexibility over the selling price of their property and buyers need the reassurance of knowing that they are paying the true market value and not a penny more.

Commenting on this radical step, VIVA Estates MD, Chris McCarthy said, “We have always concentrated exclusively on selling property in Mediterranean Spain, and with eight years of experience and literally thousands of clients, we know the market inside out. VIVA are innovators in delivering enhanced levels of service to vendors and buyers alike.”

”.. For some time now, it’s been apparent to us that commission rates have needed to fall in line with market conditions, but before we could make such a fundamental move we obviously considered the implications very seriously, both in close consultation with our own staff and by sounding out, as much as has been practical, our industry partners. We’ll be ruffling a few feathers, I imagine, but although it’s early days the initial response from clients has been very encouraging as you would expect.”

“A resales commission of 2% is fantastic news for vendors and buyers alike, and a shot in the arm for the entire market.”

More information from VIVA Estates

After VIVA’s recent announcement of a flat 2% commission rate on property sales and my comments yesterday, I received some pertinent feedback from David Novi of Novi Property Mallorca, he says:

“Many observers have for some time blamed such low commission levels in the UK for the poor quality of service offered by Estate Agents in that market. Rather than applauding the lowering of rates in Spain we should be encouraging higher rates back in the UK, along the line of other European markets like Spain.

This would encourage a more professional approach from Agents who should consider themselves more as ‘professional intermediaries’, taking a full and active role in the whole sale process - rather than simple brokers looking to make a quick buck.

The emphasis in Spain should be less on reducing commission levels and more on improving service quality, regulating the industry and ridding the market of the ‘cowboys’. Reducing commissions will only encourage the less reputable agents to take short cuts, push through sales without the appropriate due diligence, in order that they can get their hands on the commission as quickly as possible.

One of the attractions of the Spanish approach to residential property retailing is that agents can cooperate, on a split commission basis, to widen the ‘property offer’ for their purchaser clients. This allows buyers to access the widest possible choice of properties without the need to approach dozens of different competing agents.

This cooperation will become a thing of the past and, rather than moving further towards a true Multi Listing System, the Spanish market will drift towards the UK sole agency model dominated by a few large chains of Agents, offering an almost ‘self service’ approach to property buying and selling with little or no added value offered by the Agent.

When we are talking about the biggest purchase most people will make during their lifetime this is profoundly worrying and will only exacerbate the poor quality of service in an already unregulated industry.

Vendors will also lose out. Less income means less investment in the marketing and promotion of properties. However, if this multi agency approach could be adapted to one similar to the US Multi Listing System, both purchasers and vendors would benefit.

Property Finders, Relocation Specialists and Buyers Agents, all of whom have a very important and valid role to play in a market with so many foreigners entering the market for the first time, and who generally earn their income from split commission deals, will be squeezed out of the market. Since these Agents are the most likely to be offering bespoke services directed to the needs of buyers, their loss will significantly reduce the options available to prospective purchasers and the quality of service they can expect.

While I am the first to admit that there are some agents out there making quick and easy money while offering, at best, an indifferent service, I think we are at real risk of throwing the baby out with the bath water by tackling the problem through commission reduction rather than greater emphasis on service quality, regulation and training.”

That’s what David Novi of Novi Property Mallorca thinks - What do you think? Email me, Martin Dell - and let me know.

Many investors now have negative view of the Spanish market, which is largely unwarranted, one expert has said.

Mark Stucklin, spokesman for Spanishpropertyinsight.com, said that problems in the Spanish property market have been “exaggerated” and many investors have a distorted view of the country’s prospects.

For the first time in many years, there is now a buyers market and although investors have to accept more “realistic” prices in a more subdued market, demand for good-quality property remains high.

“It’s misleading to think quality property in Spain is available at giveaway prices because of the crash - that is simply not the case. Now is a good time to buy.

“But quality property in good areas costs money because it’s in demand. There’s still demand for that and there always will be.”

The chairman of the Federation of Overseas Property Developers, Agents and Consultants recently asserted that there are still a number of excellent opportunities in Spain for investors who have are focussed on long-term price rises.

Story from propertyshowrooms.com

The province of Valencia, located in eastern Spain, showcases a mixture of white sandy beaches, a rich interior and vibrant city - all within 23,255 sq.km. In many ways it represents the essence of Spain yet retains its own Catalan heritage attracting over 4 million visitors each year.

But as national average property prices soar to €241,000 (£162,300 according to the Kyero.com Spanish Property Index) where will the predicted 70,000 second homes bought by Brits this year be located? The province of Valencia takes up the challenge to be the number one choice in 2007.

Valencia province has suffered from some adverse press in recent years due to the LRAU (Ley Reguladora de la Actividad Urbanistica). This was revised last year by the LUV (Ley Urbanistica Valenciana) and taking the simple precautions of consulting with a lawyer and buying land designated as ‘urban’ will avoid future problems. It seems that buyers are taking this advice on board; of the 31,342 Spanish properties bought during the first quarter of 2006, Valencia was the most popular destination with 8870 being sold, accounting for 24% of all sales to foreigners.

The property market in Valencia is booming with average property prices of €212,000, 12% below the national average, attracting both second home owners and investors alike. The province displayed an average property price growth of 6.6% from 2005 to 2006 (€198,275 - €211,370) and shows no signs of slowing. The price of new build property in Valencia City is increasing too, by over 15% in 2006 and now stands at €2,211 per m2, still almost half the price of new builds in the capital Madrid and Barcelona.

Of course some parts of the province are more in demand than others and this is reflected in average property prices. Towns such as Bocairent located inland, offer average prices 25% below the province average, Casinos, north-west of Valencia City, 32% below and Oliva, on the southern coast at 14% below. In contrast Chiva, on the main highway west of Valencia City offers average prices 5% above the province average, Monserrat, located south-west of Valencia City, 7% above and Valencia City itself with prices 19% above. The most sought after properties in the province are 3 bedroom villas which average at €194,000, 24% below the national average of €241,000.

Valencia City, Spain’s third largest urban area, despite being one of the most expensive within the province still represents excellent value for money and great investment potential. 2007 will be an eventful time for the city as it will play host to the 32nd Americas Cup from April to July and enjoy an expected global TV audience of 300 million as well as 1 billion Euros worth of infrastructure development. This includes the new high speed rail link from Madrid, redevelopment of the Inner Harbour and the extension of the metro and main airport which already receives low cost flights from the UK and Ireland (Easyjet, Ryanair, Thomsonfly and Clickair). The positive impact of the 1992 Olympics Games on nearby Barcelona’s property market is expected to be mimicked by Valencia in 2007 and so there is no better time than to invest in this truly Spanish region.

In addition to the ‘sailing olympics’, Valencia is also gearing up for Formula 1. The McLaren Mercedes 2007 season car was launched recently in Valencia and the city has clearly signalled its intention to host a Grand Prix and even surpass Monaco as the world centre for the lucrative motor sport. The Valencian government is keen to utilise the newly regenerated harbour to stage the event and this increased global attention should please property owners.

Martin Dell, MD of leading Spanish property portal Kyero.com, comments, “We have seen property prices rise steadily in Valencia over the last couple of years. The province offers potential buyers such a variety from city to costal and inland properties and bargains are still to be had. The Kyero.com Spanish Property Index for Valencia suggests that there is an opportunity for capital gains in the area; it is no wonder that Valencia province attracts more and more foreign buyers each year.”

Illegal construction on the seafront is a “legacy from the past” that the Ministry of the Environment’s Coasts Authority is keen to lose sight of. A special programme to withdraw administrative concessions plus close collaboration with the Junta de Andalucía and local Town Halls is the formula the authority will be working with to put an end to a problem that affects the entire Spanish coastline to a certain extent.

José Fernández, director general of the Coasts Authority, recently paid a visit to Punta Candor beach in Rota (Cadiz) to supervise the the conservation work taking place in the area, classed as a natural monument. There he expressed his concern about illegal construction, which he explained collaboration between the different authorities was helping to “correct” or “redirect”. He stressed that the Junta de Andalucía, with its powers over supra-municipal planning, was able to “bring order to these somewhat wild settlements”.

He did not rule out the possibility of this “correction” process involving the demolition of illegal buildings, although he explained that wherever possible this would be done with the “consent” of the property owners affected. He stressed that it would not be sensible to continue to use illegal constructions on the coastline “especially with the threat of climate change and rising sea levels”.

On a later visit to El Palmar beach in Vejer de a Frontera, also in Cadiz, Fernández found himself face to face with a protest staged by residents from one of the areas with the highest concentration of illegal construction in the province, Zahora, in the municipality of Barbate. Representatives received the director general with placards calling for greater attention to be paid to their area by the authorities, as, they claimed, the place has been “totally neglected”.

According to a representative of the protesters, José Antonio Mármol, the local people “demand help to bring our situation to order and ask the Coasts Authority to stop some of the work it is carrying out, such as building a concrete wall on the beach where a wooden one would be much better”.

As for the protests by the people of Caños de Meca about the neglect suffered by their area, Fernández explained: “We do not have any specific information about problems in Caños and the Coasts Authority has limited resources which cannot be focused on one area alone, however we do invest a lot on a provincial level”. He went on to say that it was a question of the Town Hall contacting the authority so that “solutions can be found through good relations”.

Fernández had gone to El Palmar to see the results of the work carried out by the Ministry of the Environment there, at a cost of 5.23 million euros. This has involved the conservation of the sand dunes, with the removal of alien plant life and the planting of native species.

Improvements to the local infrastructure have also been carried out, including better access to the beach and services for the physically disabled, as well as the imminent widening of the beach with 600,000 cubic metres of sand and the installation of silica particle collectors to encourage the growth of the sandy strip.

Story from SUR in English

The European Commission has decided to refer Spain to the European Court of Justice over its laws on land-and-town planning that apply to the Valencia Community (known as “LRAU” and “LUV”).

The Commission has already sent a letter of formal notice and reasoned opinion (IP/05/1598, 14 December 2005) to Spain regarding law 6/1994 on land-and-town planning (“LRAU”) of Valencia. In these, the Commission took the view that the award of integrated action programmes (Programas de Actuación Integrada – “PAI”) constitute public works and/or service contracts that should be awarded in accordance with Directives 93/37/EEC and 92/50/EEC (now consolidated and amended by Directive 2004/18/EC). PAI are contracts awarded by local authorities that include the provision of services and performance of public infrastructure works by property developers (“agentes urbanizadores”) selected by the local authority. The LRAU was revoked by law 16/2005 (“LUV”), which entered into force on 1 February 2006.

The Commission sent a second letter of formal notice on 4 April 2006 (IP/06/443, 4 April 2006) and a second reasoned opinion on 12 October 2006 (IP/06/1370, 12 October 2006), asking the Spanish authorities for their observations on several provisions of the LUV and on their compliance with previous warnings regarding the continued award of contracts and in breach of the EU procurement Directives.

The Commission considers that, although the LUV streamlines the procedure to select property developers, it still contravenes the EU procurement Directives in several respects. These include the position of bidders who request contracting authorities to open a procedure to award a PAI, the contents of contract notices and tender documents, some of the criteria for the award of the contract, and the possibility to make various amendments to the contract at the time of the award or during its performance. The Commission further considers that the Spanish authorities did not comply with their EU obligations, by failing to adopt measures to prevent the award of contracts and in violation of EU legislation. Finally, there is still a difference of opinion as regards the core issue of whether PAIs are public contracts subject to the EU procurement rules. The Spanish authorities maintain that PAIs are not public contracts, and therefore, that neither the LRAU nor the LUV contravene the EU Directives. The Commission holds the opposite view.

The latest information on infringement proceedings concerning all Member States can be found at: ec.europa.eu

For thousands of Britons Spain is an old friend, a hogar del hogar (home from home). Since 1994, the country has been our number one choice for holidays abroad, attracting 13,864,000 tourists in 2005 alone. Spain however is not only our favourite destination for sun, sea and sangría; new government figures have revealed that Spain is still dominant in the buy-to-let and investment property markets despite strong competition from emerging European markets such as Bulgaria, Hungary and Romania.

According to the Office of National Statistics, over £6 billion has been invested in Spanish property, accounting for 27% of British foreign investments. This mature property market has its advantages over relative newcomers offering low interest rates, a range of mortgage products and sustained growth. Some may say that Spain is “over the hill” when it comes to opportunities to profit through property, however recently released figures beg to differ.

According to the Kyero Price Guide,the average property price in Spain is currently €245,000 (£169,000) well below the UK’s average property price which currently sits at £185,000. The most popular regions for property searches are Malaga, Granada and Alicante where property prices average €312,000, €158,000 and €216,000 respectively. There are however pockets of Spain which offer properties well below the national average in price yet have a strong potential for capital growth and rental income - they are Almeria, Valencia and Seville.

Almeria, located on the south eastern tip of Spain, is a land of contrasts boasting unspoilt coastal fishing villages, picturesque towns such as Mojacar and access to the ski resorts located in the Sierra Nevada mountains in the province of Granada. The region had been one of Spain’s best kept secrets. However, over the past few years the area has opened up with a number of new hotel resorts and golf developments springing up west of Almeria town and Almeria’s airport being served directly from the UK by a number of budget airlines including Easyjet, Ryanair, Monarch and Flybe.

Property prices have reflected these advancements in communications and amenities; the last 12 months have seen a steady 12% increase in property prices from €171,000 in May 2005 to €191,000 today. Almeria properties still offer a good option for buy-to-let investors, the property prices are 22% below the national average and with increased tourism to the region the demand for rental accommodation is high.

The region of Valencia has also seen a steady rise in property values over the past year. The traditionally Spanish coastal town of Castellon, north of Valencia, in particular has seen a marked increase of 35% from €167,000 in May 2005 to €225,000. Located on the Iberian Peninsula, the Costa Azahar, or orange blossom coast, is a real hot spot for property investors. Boasting over 112 kilometres of unspoilt Mediterranean coastline, 320 days of sunshine annually and properties 8% cheaper than the national average, this stretch of Spanish coastline is a real alternative to the traditional Costa Blanca or Costa del Sol resorts.

Valencia is a vibrant, cosmopolitan city and offers all that one would expect from Spain’s third largest urban centre. The America’s Cup which will be held in the city in 2007 has led to millions of euros being spent on improvements to the infrastructure, for example the new high speed rail link from Madrid and the extension of the main airport which already receives low cost flights from the UK. The positive impact of the 1992 Olympic Games on nearby Barcelona’s property market is expected to be mimicked by Valencia in 2007 and so there is no better time than to invest in this truly Spanish region.

For the shrewdest of property investors, the traditional costa developments are no longer enough to tempt them; they are more interested in the increased capital growth and regular rental income to be obtained from inland locations. Seville, for example, is a good choice for property investors who are more interested in Spanish culture, history and traditional life.

The hosting of Expo 92 was a real turning point for Seville, the south side of the city was redeveloped and opened up to the rest of Europe. Since then Seville has seen an increase in both tourism, due to the new low cost flight routes, and domestic in-migration with many companies relocating to the Andalucian capital. This in turn has led to an increase in demand for rental accommodation. Seville saw a 33% growth in property values from May 2005 to today; this trend shows no signs of slowing and there are still property bargains to be had with average property prices being 41% below the national average at €144,000.

It seems therefore that our old friend Spain still has a number of hidden gems to explore and invest in. The potential to profit from property in this country is as good as any other within Europe and maybe we should think twice before ruling out our favourite holiday destination.

It is the third community in Spain with a bigger increase of entries of foreign visitors. Nearly 550,000 foreign tourists have visited the Autonomous Community of the Basque Country during the first seven months of 2006, an increase of 14.2% with regard to the same period of time the previous year.

According to data by the Ministry of Industry, Tourism and Trade, the A.C. of the Basque Country is the ninth community with most entries by foreign visitors.

The Basque Country only registered 1.7% of the total amount of foreign visitors in Spain, but the increase exceeds the Spanish average, 5.3%. This places the Basque Country in the third place with a biggest increase in foreign visits, only exceeded by Madrid and Castilla y León.

A total amount of 164,968 foreign visitors came to the Basque Country in July 2006, an increase of 12% compared to July 2005, according to data by the Basque Statistics Office Eustat. This places the Basque Country in the ninth place of the entries of foreign visitors, receiving 2.1% of the total amount of foreign visits.

Visitor entries increased in all three provinces in the A.C. of the Basque Country: Alava (17%), Bizkaia (16%) and Gipuzkoa (7%).

Among foreign visitors, the numbers coming from France, Belgium, United Kingdom, Portugal, USA-Canada and Latin America all rose, and there were fewer visitors registered coming from Finland, Ireland and Sweden among others.

Among Spanish visitors there was an increase from almost every Autonomous Community, particularly from Madrid, Castilla-León, Andalucía, Cantabria and Asturias.

Story from eitb24.com

Scottish Widows has introduced a new remortgage product aimed at UK citizens who are planning on purchasing property in Spain.

The Scottish Widows Own Overseas remortgage package enables customers to choose from a series of Spanish mortgages as well as taking advantage of services that will take them through the buying procedure.

Gordon Bowden, business development director at Scottish Widows Bank, stated: “Despite the significant size of the market, remortgaging isn’t common in Spain - largely due to a lack of attractive remortgaging packages from lenders.”

“Customers will also benefit from the familiarity of dealing with a UK based lender who will help to navigate them through every aspect of the process,” Mr Bowden went on to state.

Scottish Widows has formed part of the Lloyds TSB Marketing Group since 2000 and was established as the first mutual life office in 1815.

Story from moneynews.co.uk

Welcome to an updated format of kyero news. We decided to produce this page in response to subscribers of our property pulse newsletter saying they wanted more frequent updates in smaller packages and because of the ever increasing problems of newsletters being tagged as SPAM by Internet Service Providers and individuals trying to regain control of their in-boxes.

Hopefully this will be a good solution for all because it’s MUCH simpler to publish in this format than send out a newsletter and MUCH easier for us to rattle off a snippet or two compared to having to author a newsletter in various email formats. Now you can receive an XML feed of this letter - rather than have us ‘push’ news to you via email, you can ‘pull’ updated news from this page as and when there is ‘new’ news. Take a look at the links at the bottom of this page about news readers and dive in - go on, give it a try!

We’ll keep the property pulse newsletter running in tandem for the time being and will send out summaries of the news that appears here twice a month for those who prefer an email update. If you haven’t subscribed to the property pulse newsletter and prefer this format - you can do so here

We have a ton of things coming up that we’re just bursting to tell you about - developments on the kyero.com web site that will make finding your ideal Spanish property *SO* much easier - new agents in new areas of Spain and special offers from kyero’s 290 estate agents.

We’re always interested in your feedback about questions you may have, things you’d like to know about, stuff you like about kyero and stuff you just can’t live with - tell us, we want to know!

These days, it’s impossible to turn the pages of any magazine about Spain without reading about the virtues of ‘Real Spain’ - how different the inland locations are from the popular coastal developments. You know what? It’s true!

We have just returned from a two week holiday near Zahara de la Sierra, just north of Ronda, 100km inland from San Pedro de Alcantara on the Costa del Sol. The contrast between the two could hardly be greater.

Zahara is surrounded by national park land and it truly is an unspoiled wilderness. At night, in the villa we rented, when we switched off the lights there was complete darkness - there were no other signs of life for miles and miles. By day, golden eagles soared overhead, surveying the local hills - almost mountains at a height of 1500m.

I had imagined nearby Ronda to be a bustling busy city but, even at the height of the tourist season, it still retained a charming village atmosphere. This area is also famous for its ‘Pueblos Blancos’ - we lunched in Grazalema one day - simply enchanting!

So, for once, you can believe what you read. Spain is a country of immense contrasts and this part of inland Spain is as enchanting as it is different from anything I had ever experienced before.

Martin Dell

Insurer Hiscox has identified a new group of young buyers who are planning to invest in overseas property while renting in the UK.

According to a study commissioned by Hiscox, 27% of prospective first-time buyers say they would consider buying overseas to get onto the property ladder. Observing that the younger the buyer, the more likely they are to be deterred from purchasing in the UK, the study also found that 84% of 18-24 year olds believe buying abroad is a more affordable option than buying in the UK (compared with 74% across UK adults).

Based on these findings, Hiscox has labeled this emerging group of first-time buyers as ‘barbies’ (buying abroad, renting in Britain).

“More young people than ever before are finding their route into the UK property market blocked and are turning to overseas property investment as a more affordable and potentially lucrative investment option,” said Steve Langan, UK managing director at Hiscox. “In the 1980s, yuppies started to push UK property prices up and the signs are that twenty years later the barbies could do the same for property prices abroad.”

First time buyers in the south east were most likely to consider investing overseas, at 38%, while almost half of the 37% of under-35s worried about never owning their own property live in London and the East Midlands (21% and 24% respectively). Looking at the data more broadly, 33% of men would consider buying a foreign property compared to only 22% of women.

Story from OPP

Talk about golf in Europe and the conversation usually turns to Ireland or Scotland. Destinations on the continent have long received little attention. That has started to change. Spain, with a century of golf heritage, is starting to turn heads. The country found itself in the international golfing spotlight in 1997, when Sotogrande’s Valderrama course was selected to host the Ryder Cup Matches.

“Skeptics and believers alike watched in wonderment as a course called Valderrama unveiled its classic finesse and confounded the best players on the planet,” David Brice wrote in a story for GolfWeb. “Impressed golfers began speaking of Spain in the same breath as they did Scotland or Ireland - Spanish golf had arrived.”

Today Spain boasts some of the most luxurious golf resorts in Europe, and the warm, sunny climate makes it a pleasure to hit the links. Many of the most sought-after spots are in Costa del Sol - or Costa del Golf, as it has come to be called - and they are without a doubt world class.

La Manga Club: Located in Murcia, La Manga won World Travel Awards as Europe’s Leading Golf Resort in 2001, 2003 and 2005. Its three 18-hole courses have played host to many international events, including the Spanish Open and the Spanish PGA Championship. The club recently spent millions renovating its North, South and West courses. The North and South, lined by private villas, are dotted with palm trees and other features that make them picturesque as well as challenging to play.

“Lakes and large, sculpted bunkers add to the visual delight of both courses while the criss-crossing of deep barrancas - storm gullies which are dry for most of the year - adds a challenging aspect requiring careful play to avoid,” Peter Ellegard wrote in a 2004 review for WorldGolf.com. The resort also has premier accommodation in the Hyatt Regency La Manga, which offers a spa and a mammoth (28-court) tennis facility.

Marbella Club Hotel, Golf Resort and Spa: On the southern coast of Spain in the “Golden Mile” between Marbella and Puerto Banus, this resort was named one of the Best Hotels in the World in 2004 and 2005 by Travel & Leisure.

Each of the 121 rooms has a balcony or terrace with views of the coast. Marbella’s 18-hole golf course, designed by Dave Thomas and located about 20 minutes from the hotel and spa, has lush undulating fairways and many well-placed bunkers. The clubhouse is perched over the 18th green.

La Cala Resort: This Costa del Sol resort advertises itself as the largest golf complex in Spain. It has three 18-hole golf courses, Campo America, Campo Asia and Campo Europa, the last opened only last year.

Designed by Cabell Robinson, Campo Europa is well-bunkered, but the spacious fairways and large greens make it more accessible to a range of skill levels than the other two courses. The Ojen River runs through the 6,576 yard track, cutting over the wide fairways three times.

The resort has a five-star hotel with 107 rooms and also rents luxury apartments and villas. Sample a bit of Spanish cuisine at Restaurant La Terraza and get an Indian head massage at the Caracala Spa.

Story from worldgolf.com

Tarifa has long been a draw for hippies, but now that the smart set has put it on the map, demand for property is exploding - along with prices, says Mark Stucklin.

“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.

Georgie and Lawrence Bull moved three years ago from Rye, East Sussex. Both keen windsurfers, they met at Rye Watersports, a windsurfing centre. “Lawrence came to Tarifa years ago to windsurf, and fell in love with the place,” explains Georgie, 32.

The Bulls, who relocated with their children Sam, now 11, Oliver, 9, and Maisy, 5, and have just had a fourth baby, Lilia, started off by renting a finca, or country property. “But it was very basic, and too cold and wet in the winter, so we moved into rented accommodation in town,” says Georgie.

In 2004, they found a corner building in the attractive old quarter, which they bought for £340,000. “Fortunately, the building was already largely refurbished, so we didn’t have to undertake much building work,” explains Georgie.

Located just inside the city walls, on a street leading directly down from the beautiful old Moorish gate known as the Puerta de Jerez, the building has three floors plus a roof terrace, with views of the old town and the sea. On the ground floor, Georgie has opened Tarifa’s first organic shop, selling her own brand of natural and organic skincare products called Tarifa Green.

“It’s a great place to live,” she says. “The downside of living in the old quarter is the noise and the problems with parking, but you get used to it.”

Beth Harrison, 34, and her French-Norwegian husband, Arvid Bergvall, 36, moved to Tarifa from London three years ago. The couple have since had two children, Amélie, two, and Léa, five months.

After making several local real-estate investments, Harrison and Bergvall set up Vision Tarifa, a property consultancy specialising in well built, design-led properties. They provide an advisory service to investors, and they also rent out some unique properties around the area. Their business gives them an understanding of the forces driving the local market.

“You can’t go wrong with the old town,” says Bergvall, who trained as a solicitor in London. “There’s no solution to the shortage of attractive, historic properties within the city walls. Tarifa is now so popular, and so unique, that demand for this type of property will always be greater than supply.”

According to Cristina Aldana, an estate agent with Inmotarifa, property prices in the old town are three to four times higher than they were just five years ago, and demand from British buyers is partly responsible. A typical two-bedroom, 80sq m flat costs about £165,000, up from £90,000 two years ago.

Outside the old town there are some drab, modern districts spreading a couple of miles west down the beach. Many of the properties here are holiday flats, and prices are high. According to Aldana, a one-bed flat on the last remaining new development by the beach, La Reserva de Los Lances, costs £245,000; a two-bed is £275,000. “Despite the prices, it’s almost all sold out,” she says.

For those, like the Gabriels, who prefer to live out of town, the options are limited. Agricultural land and the park of Los Alcornocales surround the town, so there are few residential areas. Beautiful natural surroundings - wind farms notwithstanding - are a great attraction, but the lack of new residential development causes problems.

For detached properties out of town, the most desirable area is La Peña, a five-minute drive west of Tarifa, halfway down the magnificent Los Lances beach. “It’s slightly elevated here, with great views over the beach towards Morocco,” says Bergvall. “Yes, prices are high, but they compare favourably with places such as Ibiza.” Detached properties in La Peña range from about £545,000 to £1.025m.

The problem is that many of the properties around La Peña don’t have planning permission. Until a few years ago, it was quite normal to build properties here without permission, but there has been an Andalusia-wide clampdown on illegal building. The clampdown has increased the risks of buying illegal properties.

Fortunately for future buyers, the new urban plan is expected to reclassify as residential some land around La Peña, and along the beach towards the town. Plans even include a golf-course development, though golf is not what Tarifa is about.

“Everything is on standby until the new urban plan is approved,” explains Bergvall. “The plan is expected to legalise many of the properties in La Peña, and make more land available for development, to address pent-up demand.”

In the meantime, househunters like the Gabriels will have to pay the high prices and accept the risks, or sit tight until more properties are built. But hoping that Tarifa might return to obscurity is unlikely to do the trick. The word is out.

Story from Timseonline

According to the latest economic study by one of Spain’s leading banks, the Caixa Catalunya, buying a new flat in Madrid would cost just over 40% of household income. This comes at a time when 60% of families can’t even afford mortgages totalling 40% of their income.

Madrid is the most expensive place to buy a property in Spain followed by the Basque Country in second place and the Balearic Islands in third place.

In Catalonia it is estimated that families need to dedicate around 30% of their household net income in order to be able to pay the mortgage, a similar figure in Asturias and Valencia.

Other places in Spain where buying a property requires less than 30% of total net income are Extremadura, Galicia, Castilla-La Mancha, Castilla-León, Murcia, Navarra, La Rioja, Aragón, Cantabria and the Canary Islands.

A relatively strong economy, low interest rates and demand outstripping supply are just some of the explanations for the recent property price boom. However this has led to a situation where over the past few years property prices have risen disproportionately in relation to average salary levels, something which automatically excludes a high percentage of households throughout the country from getting onto the property ladder.

Story from euroresidentes.com

There was good news for non-residents of Spain who own property in Spain at the start of this year – the rate for capital gains tax was slashed from 35% to 18%.

The bad news for Spanish residents was that it was increased from 15% to 18%. The new regulations also reduced the withholding provision that non-residents pay when selling property in Spain from 5% to 3%.

The new law came about because the European Commission viewed the disparity as discriminatory because it meant a higher tax burden on non-Spanish nationals who are less likely to be Spanish residents. Consequently the European Commission sent Spain a formal request to amend this legislation.

When you come to sell your property in Spain you may be liable to Spanish capital gains tax. If you move to Spain and become a Spanish tax resident, you will be liable to Spanish capital gains tax on your worldwide gains. As a non-UK resident, you become completely UK capital gains tax exempt - even on UK property.

Once you are resident in Spain, there is possible relief for the main home in Spain, but not for the sale of UK property even if it was a former home unless you can possibly satisfy the re-investment rules which are quite restrictive.

For property acquisitions on or before 31st December 1994, the time-apportioned gain up to 20th January is reduced by 11.11% for every year (or part year) of ownership prior to 31st December 1994. It therefore reduces that part of the gain to nil for property acquired on or before 31st December 1986.

The gain from 20th January 2006 is taxed in full, though. So, as time progresses, the longer an older property is retained before sale, the higher will be the taxable fraction of the gain. The new 18% tax rate applies to all types of asset, not just property.

Principal Private Residence Exemption

In Spain you are exempt from capital gains tax on the sale of your main residence if you are 65 years or over and you have lived in the property for three years or more.

If you are under 65, and you have lived in the house for at least three years, then you can relieve the gain via the acquisition of a new home as long as you are Spanish tax resident. You must re-invest the net sale proceeds (after repaying any mortgage) into a new main residence within a period of two years either side of the sale.

The tax relief is based on the proportion of the total sale proceeds reinvested into the new home. If the new home costs more than the sale price of the old home, then all of the tax is deferred. If only half of the sale proceeds are reinvested, then only half of the gain is deferred. The main residence does not need to be in Spain to qualify for the relief, nor does the new home. Expenditure on improving or enhancing the property is allowable as a deduction when calculating the net gain.

Main Exemptions

Assets divided on divorce or the dissolution of a community marriage regime are exempt from capital gains tax, as are gifts to certain charities and non-profit making entities. For family companies (and the definitions are very tight), it is possible to pass the asset to the next generation without paying capital gains tax, but it is simply deferred (or rolled-over) into the cost base of the next generations. Thus tax will eventually be payable on the gain.

Plusvalia

In addition to any mainstream capital gains tax on the sale of property there is also a local tax in urban areas commonly known as the Plusvalia (which translates as “gain”), on the growth in the value of urban land excluding the buildings. Any Plusvalia tax paid is allowed as a cost of disposal in calculating the mainstream capital gains tax.

Gifts

If you gift an asset which has a disposal market value in excess of your original cost, then you will be liable to Spanish capital gains tax. The recipient might also be liable to Spanish gifts tax depending on the circumstances.

Double Tax Treaty

Under the UK/Spain Double Tax Treaty, if you are a UK taxpayer you can claim the Spanish tax paid against any UK capital gains tax liability on the same gain, but if the UK tax is less than the Spanish tax you will not get any refund from Spain.

Bill Blevins - Managing Director of Blevins Franks

Analysts foresee a much-needed stop to rising property costs in Spain. The rising prices of property in Spain finally appear to be levelling out after experts predicted a moderate increase in housing costs of 9 per cent for 2006.

Unfortunately, for young people and immigrants with low incomes, this figure is only applicable to homes with a cost between 500,000 and 600,000 euros.

Although a corresponding levelling-out of housing costs is also expected to occur for lower-priced homes, it remains unclear when exactly it might take place; this will depend heavily on interest rates and the overall development of the economy.

According to Tasamadrid, a property company in Spain, the controversial Ley de Suelo won’t have a short-term effect on property values.

This newly-drafted land legislation requires a 25 per cent reduction in regular developments in favor of government-protected homes, a requirement that has created widespread expectation of rising market prices.

Tasamadrid asserts that such an increase will not take place. Instead, agents will seek out cheaper property to compensate for the construction of fewer developments, thus causing a drop in gross prices per square meter. Housing costs would not then be affected by the regulatory changes required by the new land legislation.

These predictions suggest that a market where VPO’s (cost-regulated homes offered by the government to people of limited incomes) play an increased role may in fact be viable, as long as their final prices allow for profits on the side of contractors.

Besides benefitting young people and immigrants in search of affordable housing, this market model might even increase the profit margins of contractors, since building larger numbers of government-assisted homes would entail focusing on an essentially risk-free market.

Story from 999today.com

The harbourside circuit will draw comparisons with Monaco as Valencia will host a Grand Prix from 2008 after agreeing a deal with Formula One supremo Bernie Ecclestone. The race, to be called the European Grand Prix, is scheduled for late in the season on a newly-designed circuit around the Spanish port’s streets.

The seven-year agreement is conditional on the People’s Party holding power in local elections to be held this month. The new deal means Spain will have two Grands Prix next year, with Barcelona staging the other. Ecclestone has previously said that no European country should have more than one race.

The Valencia circuit will be between 4.1-4.3km (2.5-2.7 miles) long and its harbourside location is bound to draw comparisons with the Monaco Grand Prix.

According to Spanish media, Ecclestone insisted the race must be on a street circuit rather than the nearby Ricardo Tormo track in Cheste which hosts a round of the MotoGP and is also used for F1 testing.

Valencia’s willingness to pay an estimated 26m euros (£17.5m) to stage each race as well as the boom in popularity of F1 in Spain, sparked by the emergence of double world champion Fernando Alonso, are seen as major factors behind the decision.

Barcelona’s Circuit de Catalunya, where the Spanish Grand Prix will be held this Sunday, has an agreement to stage a race until 2011.

Story from BBC.co.uk

Are the days of the traditional, lavishly spacious three bedroom, three bathroom Spanish apartments numbered? According to property experts the answer is very much a “yes”.

A dramatic change in society and public expectation has forced the hands of promoters who are now happily offering small scale one and two bedroom apartments, and they’re going like hot cakes.

First time buyers in the shape of young couples and singletons or empty nesters, now have a much wider range of properties to choose from, particularly in the south of Tenerife and more especially in San Isidro where such flats are being snapped up fast, at a price of between €90,000 and €120,000. Purchasers, more often than not, are people who work in the south and prefer not to make the increasingly stressful commute from the capital or the north.

One well-known Tenerife estate agent chain said that non-EU foreign immigrants are now beginning to step onto the property ladder and for them small flats such as those in San Isidro, where there is, in addition, a large immigrant community, are ideal. But they often encounter problems getting credit from a bank, explained one property consultant attached to the agency. “These people work every hour God sends them,” he said, “but their contracts or other documents are not enough to get them credit with a bank. Banks here in this respect are prejudiced. They will concede a mortgage to a native born islander with a permanent contract although he or she earns less, rather than to an immigrant who might at best only possess a residencia and no contract, even though the latter shows he or she is willing to work from dawn to dusk to pay off their flat.”

Story from Tenerife News

Spain has a long tradition of overseas property buyers. The Spanish market caters for many different needs and desires - from clear waters and long stretches of beach, to the bustling city life, to a country getaway. The older generation also favour Spain as a place to retire to. However, just because it has had a long history of foreign property investors, it doesn’t mean to say that it has been without it’s problems.

The mortgage market in Spain is highly active. Over two hundred local banks offer some sort of home loan product directly aimed at overseas investors. Mortgage options vary greatly from deal to deal and bank to bank, however Spanish property law dictates the maximum you can borrow is 70% of the property value. Most lenders will also not lend you beyond three times your income, although some international banks may be able to increase this limit slightly. As is the case in most countries, lenders prefer people with solid, continuous employment.

To buy a property in Spain, you must first get an NIE number (a taxation identification number). This number is important because you will need it for most steps in the buying process. Any local solicitor should be able to help you get one, if you give the lawyer the power of attorney. If you do do this, it is important to find a solicitor that you trust, and one that has your best interests in mind to ensure that you get a good deal and you do not get ripped off.

After you have found a property you wish to buy, you will need to sign a ‘reservation agreement’. When you have signed this agreement, you must pay a small fee - generally 1 or 2% of the property value. The vendor will then withdraw the property from the market officially, and your solicitor can start all the formalities including land registry checks. Once the solicitor has confirmed that the property has a clear title and there are no outstanding debts on the property, both parties will sign a contract of sale. After you have signed this, you will be required to pay a deposit of about 10%.

If you are buying off plan, your builder should give you a copy of the insurance cover or bank bond at this stage to ensure that your investment is safeguarded in case the builder does not complete the project.

Once all the formalities have been completed, both the vendor and the buyer along with their solicitors and bank representatives (if you are buying via a mortgage) must go to the public notary’s office to sign the finalised contract. At this point, the title deed is transferred into the buyer’s name.

The costs associated with the property will vary, depending on a great number of factors. Generally, new properties have a 7% VAT duty added along with 1% stamp duty. Older properties do not have stamp duty paid on them. If you are buying the land, there will be a 16% VAT charge plus 1% stamp duty. Some other costs you will need to factor in are land registry fees, lawyer’s fees, notary charges and mortgage charges.

Story from foreignpropertybuyer.com

The province of Málaga will have a population of more than three million people in 10 years’ time, a recent study has suggested.

Experts predict that if the new PGOU town plans for the various towns are carried out, by the year 2017 the population will be double the current figure, and this will lead to a 147 per cent increase in water consumption.

Two new reservoirs the size of La Concepción will be needed and three new water treatment plants will have to be built to satisfy the demand for potable and irrigation water. The statistics are part of a report presented by the regional environment department delegate, Ignacio Trillo in a study of current infrastructure. The revised town plans are creating a stir in environmentalist circles as they seek to cash in on the growing trend towards expat housing for those seeking a higher quality of life.

In Antequera alone the figure rises to 50,000 homes in the next 25 years while the capital is also seeing massive expansion.

Story from Euroweeklynews.com

Spanish succession tax applies to inheritances and gifts reports Bill Blevins, Financial correspondent of Blevins Franks. It is payable if the recipient is a Spanish resident or the assets in question are located in Spain. The residency of the donor does not matter except to indicate whether it is State (national) or Regional rules that apply.

There is no blanket exemption for assets passing between spouses as there is in the UK. Only the Spanish assets of non-residents are liable for tax, but if the beneficiary is a Spanish resident, they will be liable for succession tax on any worldwide assets they inherit. Beneficiaries are graded into four groups and the more distant the relationship the higher the tax rate and the lower the tax free allowance:

Group I: natural and adopted children under 21 Group II: natural and adopted children aged 21 and over; grandchildren etc; parents; grandparents etc; spouses; unmarried partners registered as a pareja de hecho in Andalucía or Catalunya. Group III: in-laws and their ascendants or descendants; stepchildren; cousins; nieces and nephews; aunts and uncles; sisters and brothers. Group IV: All others including unmarried partners unless registered under pareja de hecho.

The tax rates for 2007 range from 7.65% for assets of €7,993 or less, to 34% for assets over €797,555. Once you have worked out the tax due it has to be multiplied by factor of between 1 and 2.4 depending on the relationship and existing Spanish wealth of the beneficiary.

There is a reduction of 15,956 euros per beneficiary in Groups I and II. Any direct line descendant under the age of 21, including adopted children, has an additional allowance of 3,990 euros for every year they are under 21. The total deduction is limited to 47,858.59 euros per child etc. Those who are not so closely related such as cousins, nephews, nieces and stepchildren have an exemption of 7,993 euros each.

Where the recipient is disabled, further reductions are available depending on the degree of registered disability. Between 33% and 65% disability it is 47,858 euros, and for over 65% disability it is 150,253 euros. There is no exemption for distant relatives and unrelated people. There are also no exempt limits for lifetime gifts.

Under the State rules, a 95% reduction is allowed against the value of the deceased’s main home provided that the beneficiaries are either the spouse, parents or children and the inheritors continue to own the property for ten years from the date of death. The property does not have to be the main home of the beneficiary. The maximum reduction is 122,606 euros for each inheritor. The 95% exemption can also apply where the beneficiary is a more distant relative over the age of 65, and they have lived with the deceased for at least two years before the death.

Spanish succession tax is ultimately governed by the various Autonomous Communities which are individually controlled politically. The Autonomous Communities have power to improve upon the State rules. There is a gathering trend towards relief or abolition of succession tax between spouses and the direct line in the Autonomous Communities.

In Tenerife the personal reductions are the same as the State except for relief on the main home which is 99%. There is an additional deduction of 72,000 euros for recipients with a disability of between 33% and 65%. For a recipient with a disability of 65% or more it is 225,000 euros. A 99% reduction is in place for life assurance policies provided that the recipient is a descendant under 21 years. An 85% deduction is allowed for cash gifts to descendants under 30 years old to buy their main home up to a maximum of 24,040 euros. For recipients with a disability of 33% there is a reduction of 90% up to 25,242 euros. If the disability is 65% the reduction is 95% up to 26,444 euros. The gift must be registered as such and the property must be bought within six months of the gift (or the first gift if a series of gifts is made). The property must be situated in the Canaries and the recipient must live in the property as his or her main home for at least five years.

Even though you are a resident of Spain you may still be UK domiciled and will be liable for UK inheritance tax (IHT) on your worldwide estate, which will include your Spanish assets, as well as being liable for Spanish succession tax. IHT is at the rate of 40% above the tax free band of £285,000 rising to £300,000 from April this year, although any tax paid in Spain can be deducted against the UK tax due.

There are structures available, such as offshore trusts, which can protect against the liability to Spanish succession tax, as well as wealth, income and capital gains taxes. Spanish succession laws cannot apply either to assets in an offshore trust. Once you have lived in Spain for at least three years and if you succeed in becoming a UK non-domicile you can set up a ‘Golden Trust’. This is an offshore discretionary trust with permanent exemption from UK IHT even if, unplanned, you eventually return to the UK to live.

Story from tenerifenews.com

Prohibitive housing costs and inflexible financing opportunities make it increasingly difficult for young people in Spain to move out of their parents’ homes. Spanish institutions are considering unusually aggressive techniques to address the situation.

It’s getting harder and harder for young people in Spain to leave their parents behind and purchase a first home; a financial move that requires over 50 per cent of their income, according to a recent study.

This percentage peaks in Madrid, where over 70 per cent of a young person’s salary is needed to buy a home, and meets its lowest point in Extremadura at just over 30 per cent.

These dismal figures, along with an increase in housing costs of 130 per cent between 1995 and 2005, have led to proposed legislative changes that aim to facilitate the access of youth and other disempowered groups to the housing market.

Growing sales of residential and vacation homes (spurred by the continuing expansion of the Spanish market and increases in employment) along with a large influx of foreign immigrants, has led to a situation where inadequate financing conditions make it difficult for young people to purchase a home without entering into almost life-long debt. A considerable number of empty homes that cannot be re-introduced into the market also present an obstacle to those wishing to buy a first home.

The Bank of Spain has announced that more aggressive measures will have to be taken in order to solve the current situation. Giving impetus to the rental market and increasing the number of government-sponsored homes for people of limited financial means are a few of the suggested solutions.

On a larger scale, the Bank proposes implementing changes in the legal system that will allow for more speedy real estate related trials, and plans on revising aspects of Spanish law that block the entrance of empty homes into the rental market.

The Consejo de Juventud de España, a youth advocacy group with support at local and national levels, has demanded the creation of a series of public housing complexes that would require no more than 20 per cent of a person’s total income, enabling people with modest salaries to move out of their parents’ homes at an earlier age than is currently achievable.

Ultimately, organisations like the Bank of Spain and the CJE aim to make it possible for the youth in Spain to participate in the same level of financial independence enjoyed by young people in countries such as the US, where the expense of renting or buying a home and owning a vehicle is not as prohibitive.

Story from 999today.com

Spain’s schools, hospitals and public transport score higher than their UK equivalents, according to a new survey.

La Zenia, Spain (PRWEB) December 15, 2006 - Spain offers much more than sunshine and cheap sangria to its UK expat population. Its education and health services, and its public transport system, leave the UK in the shade.

These are the findings emerging from a new survey of UK expats. The survey is being conducted by Home Espana, a leading Spanish estate agent with a busy and expanding Spanish property website, homeespana.co.uk. The survey was conducted online and individuals from a cross-section of the UK expat community - retired, self employed, and those working for Spanish or non-Spanish companies - logged on to answer a range of questions about their life in Spain.

Spain’s obvious attractions like its sunnier climate and lower cost of living scored highly as expected, but people also gave top marks to Spain’s public services compared to those in the UK. These findings reflect the general feedback given to the Home Espana team. The company has built up long term relationships with many customers who leave the UK to live in Spain and go on to buy more properties with the company or recommend their friends and family. According to Kieran Bryan, Home Espana’s Managing Director, “So many of our buyers tell us how impressed they are by the high standard of the local public services in their area of Spain. As new expats, this really helps make them feel welcome and settle in quickly.”

Nearly 50 percent of replies stated Spain’s public healthcare was better or much better, with a further 26 percent stating it was equivalent to the UK. These high percentages are especially reassuring for older, retired people and parents with young families - or indeed anyone who is concerned about health service standards.

In education, over 50 percent of people said Spanish schools were the same or better than their UK equivalent - and remember, that’s despite the language difference. Spain has heavily invested its transport infrastructure in recent years and. this is reflected in the survey results with again, over 50 percent of people stating public transport is the same or better than in the UK.

The survey also covered the main reasons why people had moved to Spain. Interestingly, while 70 percent of people stated that they found the cost of living was lower in Spain than in the UK, under 3 percent put this as the best thing about living in Spain. The most popular reason why people had moved to Spain, getting over 35 percent of votes, was the general quality of Spanish life.

These results seem to be showing that the high quality of Spain’s public services really add to people’s quality of life. For many UK expats, Spain is not just for holidays - it is also real place to call home.

Story from prweb.com

British holidaymakers may know Spain’s southernmost province best for the Costa del Sol, but a string of sophisticated cities, timeless white-walled villages and stunning mountains await the more adventurous. When Franco needed to drive foreign currency into Spain during the 1960s he created a stretch of coastal holiday resorts we now know as the Costa del Sol. Its heart runs between Málaga and Marbella and encompasses the infamous Torremolinos and a swathe of tourist towns, which to this day remain heavily populated by north European holidaymakers and ex-pats.

Derided in more recent times for their gauche over-development, many of these resorts have been given a fresh face to rejuvenate their appeal. At the eastern tip remains the anomaly Gibraltar, a little piece of Britain clinging incongruously to the southern Spanish coast.

However, the Andalucían region offers extraordinary diversity. Picasso’s birthplace Málaga is remarkably untouched by tourism. To the north Seville and Córdoba contain stunning architectural landmarks, as does Granada in the east, along with winter skiing in the imperious Sierra Nevada.

To the west is a windsurfing Mecca around Cádiz, there is sherry capital Jerez and eco-destination Huelva - all emerging as alternative attractions, while the dramatic Pueblos Blancos pander to those with a taste for white-walled towns hugging precipitous mountains.

For sun lovers the region has always held strong appeal, although in the interior during high summer it can be hellishly hot and most city residents decamp to their nearest coastal resort every weekend and for most of August.

An efficient motorway network links the major towns and cities although the deficiencies of public transport make a car essential for those planning something more ambitious than a one-stop beach holiday or city break.

However, major capital expenditure on the railways is promising dramatically shortened journey times between Málaga, Seville and Madrid in 2007 and with it real estate agents predict that Madrileños will flock southwards.

Andalucía’s climate has made it famous for olives and 20% per cent of global olive oil production comes from this region alone, with Jaén at its centre.

Not surprisingly seafood plays a big part in the cuisine and no beach is complete without sardines being grilled over open coals. Fresh fruit and vegetables are grown throughout and the Moorish influence of neighbouring Africa stands out in the citrus fruits, nuts and spices available.

Andalucía arguably serves up the broadest range of Spanish bar snack tapas and the region is also famous for the delicious cold soup gazpacho.

The warm climate means that Andalucíans love a cold beer as much as a glass of wine but the quintessential drink is sherry, produced in Jerez where the majority of the world’s biggest labels are based.

The huge injection of northern Europeans attracted to the region comes at a price to those wishing to invest. While there are still bargains to be had in the mountains, a short drive inland from the coast, costs have skyrocketed over the past decade and along the coast villa and apartment prices compare expensively with other European resorts.

Spaniards are by tradition apartment dwellers in the cities, so for those seeking an urban experience these types of homes are most likely to be available.

The coast offers both apartments and villas although location dictates price. Villa homes in the interior are more reasonable and partial to complete remoteness is easily achievable. Meanwhile, to the east next year’s opening of the extended coastal motorway will dramatically improve the links to Almería and Murcia, boosting property prices in the region.

However, the building boom has also spawned badly planned urbanizations and seemingly no villa with unspoilt views is entirely safe from the prospect of 30 new homes being built on its doorstep.

It is also worth remembering that increased competition in the holiday let market makes choosing a good location essential - so if you spot a bargain buy make sure that it really is good value.

Story from timesonline.co.uk

Recent tourist board figures are showing that this year could be the best in the last decade for the tourism industry on the Costa del Sol.

Following a promising start to the year, the Tourist Board’s provisional figures for July show a 3 per cent growth in hotel occupancy while forecasts for August predict better results than last year, despite the fact that this year there are 3,000 extra beds for the industry to fill.

According to the Tourist Board, the supply of hotel accommodation in the area has increased by 4.36 per cent since last summer and between the beginning of the decade and the end of 2005 the number of beds on offer on the Costa del Sol has gone from 61,000 to 80,000.

Spanish newspaper SUR recently reported that hotels expect to fill 85 per cent of their beds over the following weeks, an indication that the area is not only capable of absorbing the new supply, but it is also able to continue to move forward.

The figures have already exceeded those reached during the same period in 2000 and with the peak tourist season around the corner and the expected influx of last minute bookings, 2006 could be the best year in over a decade.

The Spanish tourist office in the UK is stepping up its promotional activity in London with a planned beach party on Regent Street with sand, flamenco dancers and typical Tapas imported all the way from Benidorm.

This renewed enthusiasm is likely to be a wise response to British press speculation over a predicted slump in the Spanish property market. Property analysts have claimed that the surge of building on the Costa del Sol has tipped the old supply and demand quota unfavourably towards Spain.

The recent figures prove these predictions to be unfounded in terms of tourism on the Costa del Sol, and investment in Real Estate remains a lucrative proposition, provided buyers spend wisely.

Story from www.999today.com

Personal security is not a luxury, it is a must. Social build should have pre-installed wiring to provide homes with security. It would avoid expensive repairs in the case of water leaks, unnecessary deaths by gas leaks, warn of fire and intrusion, and could provide the infirm or elderly with medical alarms. Having smart house technology installed in social build would bring communities closer, make them safer for those inside, and close the gap between the haves and have-nots, even if only slightly.

As in much of the rest of Europe, home automation, in terms of a complex control system with user-friendly interfaces, is still a relatively new concept in Spain. Here, home entertainment systems are considered as home automation, full stop - a misconception which those in the industry are trying to put right. As we keep saying, home automation includes every system in the house which is controllable via touch screens, PCs, the Internet or mobiles.

Legislation may be playing a small role in promoting the market here; the Código Técnico de Edificación (CTE or Technical Building Code) stipulates that new social build must have solar panels as part of the government’s strive to implement energy-saving resources. However, although the idea of pre-installed wiring has been around since 1999, we are still waiting for that to be included in the CTE. Nonetheless, the government does help to promote the sector by investigating new technologies and providing a primary outline of what the basic needs are for these products.

In Spain, the demand for security systems is high. Also, the Spanish are very house-proud, and take a lot of care over the decoration of their homes; hence, the lighting and blinds control systems have been quite a success too. Higher up the market, people are discovering the wider range of smart home technology, such as full colour screens that can act as video entry-phones that can detect movement on screen, and create presence simulation scenes when the occupiers are absent.

While custom install companies and some manufacturers tend to focus on the higher end of the market, there is still much to do in terms of education. In many cases, the technology is only discovered by accident, and unfortunately, those with a lower budget are often overlooked. The public has yet to realise that the technology is not just for the wealthy, and that a smart house system with basic features can be affordable.

Regarding education, this year in Spain, three master’s degrees in smart housing are being launched in universities. Optional credits have also recently been made available in the Ciclo Formativo Medio (technical college education) where students can choose modules in smart house systems. In Madrid, the UPM (Universidad Politécnica de Madrid), a Hogar Digital (Digital Home) has been built in the campus, so that students can go from theory to seeing devices in practice. Sponsors are, amongst others, Telefónica, Roca (bathroom), Siemens white goods and Ingenium system control devices.

Full Story from Hiddenwires.co.uk

British homeowners who purchased illegally built property on the Spanish costas have been told they have a chance of saving their homes from demolition if they can prove they bought in good faith.

Around 100,000 homes, many owned by Britons, were declared illegal after it emerged they were built with licenses wrongly handed out by corrupt or inefficient planning officials. Last month, Antonio Vercher, the special prosecutor appointed to tackle building fraud and corruption, declared that all such buildings would have to be knocked down and that the only recourse for owners was to seek compensation through the courts.

But legal experts have said the authorities will only be able to demolish a development if they have evidence that each individual owner bought in the knowledge that the property breached building regulations.

Manuel Martin, the Dean of the College of Registrars for Property in Western Andalusia, said yesterday that homeowners are protected in Spanish law by “the principle of public faith in the registry”.

“This ensures that those who purchased homes in the belief that the information supplied to them by officials was correct must be allowed to keep ownership,” he said.

The Andalusian Supreme Court of Justice confirmed that while it was determined to pursue the demolition of those buildings that had had their licenses annulled it would not send the bulldozers in before taking statements from the owners of the threatened buildings.

The news of a line of defence has brought a glimmer of hope to the thousands of Britons who inadvertently found themselves the victims of alleged property frauds.

Gwilym Rhys-Jones, an adviser and investigator at the Costa del Sol Action Group, which helps expatriates in the region to fight fraud, said it was the first piece of good news property owners in Spain had heard for a long time. “It is a straw for the desperate to clasp at,” he said.

“In effect it means that if one homeowner in a development can prove that they bought the property innocently the whole block can be saved. They can hardly knock down a residential block and leave one apartment standing.”

One elderly British couple spoke yesterday of their relief at finally hearing something positive. “Only last week we heard that the government had issued a demolition order on our building and we felt totally helpless,” said Yvonne Burditt, 83, who lives with her husband Jack, 86, in an apartment at Banana Beach on the outskirts of Marbella.

“But now at least we have something to go on. We have been trying to find out our legal position but it just hasn’t been clear, until now.”

Before paying £170,000 for their beachfront apartment three years ago, the Burditts consulted a local lawyer who assured them in writing that everything was above board.

“If it’s simply a case of proving our innocence I think we have a chance at saving our home,” said Mrs Burditt.

Story from telegraph.co.uk

Iain Macdonald and Gayle Hartley, along with their 2 year old son Joshua arrived in North East Andalucia in August 2004. Living the dream had always been top of the list of priorities and for them, arriving at the cave house one early August morning made the dream a reality. Iain (30) and Gayle (27) had sold their house in the UK, including most of their possessions, and invested in a caravan and various equipment to aid them in taking on quite a unique task to say the least.

Caves in the Granada region of Andalucia have been having a revival over recent years. Once stigmatised with gypsy culture and poverty, these dwellings are now becoming increasingly popular with northern Europeans due to their awe inspiring locations and unique sense of security and tranquility. Iain first discovered caves on the internet. “They were certainly unique and within our budget, which at the time was a major factor. We approached the idea with an open mind and decided to view some caves to discover what potential the properties and the areas around them had.”

Gayle was just as enthused about the idea, and after a brief trip to Spain their minds were made up, an offer was put in and accepted a few days later and their dream began. Gayle says “living on site in a caravan was tough but we saw it as a challenge, the project was huge and had to be implemented stage by stage, sometimes we thought that friends and family were right thinking we were crazy to take it on but now we realise its been the best thing we could have done.” Gayle went on to say “for our son Joshua it has been one big adventure, he is now bi-lingual and couldn’t be happier, we remember him playing in huge piles of sand and helping mix plaster - for him it was a fantastic experience and he loved every minute.”

Two years on and with most of the renovations complete, Joshua is in school and Iain and Gayle are relaxing on the new patio - well not exactly, Iain says “Spain is cheaper but its not free” and with the reserves all but gone it was time to start another plan of action. One product famous in Spain is the Serrano Ham. It is served in restaurants/tapas bars and you will probably find one in every Spanish kitchen. So with broadband internet installed Iain and Gayle have set about exporting Serrano hams and other traditional cured meats throughout Europe. Iain says “The dream became a reality, but then it was time to make a living, we thought of so many ideas, Gayle teaches English in the village but it was evident we needed something more.”

With the help of the local Mayor and obtaining a grant from the Andalucian government “Orce Serrano Hams” has been realised. However Iain and Gayle have not forgotten what made their venture possible and are now actively promoting their local village of Orce in brochures and media publications. Gayle says “It’s been slow progress but now we feel that things are coming together, our new life is here in Spain and we have no option but to succeed.” So, would they do it all again? Iain’s thoughts are that caves will become increasingly popular over the next few years and as a result will expose some real investment opportunities so perhaps that is a yes? Gayle is more reserved although agrees with the philosophy that “renovating a cave is hard, starting a business is harder - but would I do it again? Never say never.”

Full Story from Eyeonspain.com

The EP petitions committee adopted a recent fact finding report on Land irregularities in Spain by an overwhelming majority.

Michael Cashman, member of the recent European Parliament Petitions committee delegation to Spain and co-author of the fact finding report was “delighted” by the overwhelming endorsement of the report at a meeting of the Petitions committee today in Brussels.

After giving a long and detailed exposé on the substantial facts of the visit as outlined in the report, Michael said:

“Ultimately, it is for the Valencian authorities to solve this problem. Despite the many personal attacks and attacks on the integrity of the European Parliament and its delegation to Spain, I remain fully committed to providing a voice to those who feel they have none”.

“EU citizens who have bought property in good faith have had their dreams turn to nightmares and their land confiscated. I’m delighted that the committee adopted the fact finding mission’s report, including its recommendations. It’s now up to the Valencian politicians to act and defend the basic fundamental rights of all citizens affected by land irregularities”.

Concluding, Michael stated “I am saddened that the 3 EPP members present, all Spaniards, forced a vote on this issue. Their on-going tactics does a disservice to the European Parliament, the interests of the Valencian region and all those citizens affected. The fact that they are so isolated on this issue - being were the only members present to vote against the report - speaks volumes for their attitude to this difficult issue and their unwillingness to seek a satisfactory resolution to the problems.

EPP members, Mr Iturgaiz, Mr Herrero-Tejedor, Mrs Gutierrez-Cortines, objected to the report and recommendations being adopted by consent. In the vote which was requested, all other political groups which were present voted in favour of the report, the EPP members present were the only ones to vote against them.

Story from Abusos Urbanisticos NO

Improved airport access, promised by a new preliminary deal between Spain and the UK on the future of Gibraltar, will boost the property market in Costa de la Luz, experts announced this week.

The recent consensus reached by Spain, Britain and Gibraltar over the political status of The Rock will provide “the biggest single boost” to the emerging property market of Costa de a Luz and the western end of the Costa del Sol.

The three governments have announced that they have come to an understanding over Gibraltar’s airport, pensions for Spaniards living in the British colony, telephones and the transit zone of The Rock.

The result of the negotiations will see Spain and the UK share use of Gibraltar airport, allowing second home owners and tourists easier access to their Costa de la Luz properties.

The recent move combined with plans for a new Disney resort close to Gibraltar are clear signals that now is the time for property investment.

In 2002, almost 99 per cent of Gibraltarians voted against Britain giving Spain a share of sovereignty of The Rock, despite the fact that many traders live across the border in Spain and commute daily to their shops and offices.

Telecommunications and the transit zone between Spain and Gibraltar are to be improved under the new deal which will undoubtedly boost the economy of Gibraltar.

Gibraltar’s Chief Minister Peter Caruana will attend a three-way meeting with Spanish Foreign Minister Miguel Angel Moratinos and Europe Minister Geoff Hoon in Spain on September 18.

It will be the first time Gibraltar’s top official has represented The Rock at such a high-level meeting with Spain.

The Costa de la Luz, or the Coast of Light, is the 300km coastline on the Atlantic side of southern Spain.

Running from Ayamonte to the Straits of Gibraltar, the coast is geographically divided into two sections: the Huelva Province, which takes in the western half including the Coto Doñana national park, and the Cadiz Province, which stretches from the River Guadalquivir to the mouth of the Mediterranean sea.

It may be neighbours with the Costa del Sol, but the Costa de la Luz couldn’t be more different. Its golden beaches are long, wide, wild, often deserted - and more likely to be backed by sand dunes or pine trees than high-rise apartment blocks.

Because 30 per cent of the region is a protected area, it has remained quiet and undeveloped, with most visitors tending to spend short breaks in the beautiful cities of Seville or Jerez rather than explore lesser known towns of equal beauty such as Vejer de la Frontera or Medina Sidonia.

Now, however, the coast and nearby inland areas, particularly near the Portuguese border, are seeing increasing development as tourists and house-hunters realise the potential of this beautiful nature lovers’ region.

The Costa de la Luz has been emerging as a favourite amongst property experts over the last year and has recently been tipped as a property hotspot by British Broadsheets The Telegraph and The Independent.

The region has been overshadowed in terms of investment, development and tourism by its neighbour, the Costa del Sol, but in recent years the Costa de la Luz has started to generate interest for many investors and holiday home owners.

The area offers greater value for money than the Costa del Sol and a higher possibility of good capital returns on investments, as little known areas among foreign audiences start to generate big interest.

Prices are increasing at a faster rate than in other regions of Spain, assisted by the arrival of Ryanair at Jerez airport, which is due for expansion.

Faro and Seville airports also have regular flights to and from the UK and the new agreement will further increase the capacity of the airport on Gibraltar which mainly serves the Cadiz province.

While property prices in established resorts such as Conil de la Frontera, and sought-after historic towns such as Vejer de la Frontera, have risen considerably over the past few years, new, growing areas such as Islantilla near Ayamonte or Chiclana near Cadiz offer first-time investors good value for money.

With apartments available from around 100,000 euros and beautiful beaches, golf and unspoilt countryside on the doorstep, there has never been a better time to buy on the Costa de la Luz.

Story from www.999today.com

PARIS (AFX) - Spain is becoming increasingly vulnerable to a correction in house prices, which have risen sharply in recent years, the OECD said in a report on the Spanish economy.

‘It is becoming increasingly uncertain whether this upswing in house prices can be sustained for much longer,’ the OECD said.

An adjustment in house prices is likely at some stage, it said.

‘Such an adjustment could occur in an orderly manner, during which price increases would gradually moderate and stabilise at a more prudent level. However, a more abrupt adjustment in which prices would plunge cannot be ruled out,’ it said.

It said there is ample evidence that Spanish house prices are overvalued. If prices were to reflect only fundamentals, they would have to fall from current levels, the OECD said.

It said a ‘soft landing’ in Spain’s housing market remains the most likely scenario, but even an orderly adjustment would have an impact on the rest of the economy, by reducing consumer spending and hitting the residential construction sector.

The OECD said house prices in Spain have increased almost 130 pct in real terms since 1996, with only Ireland and the UK recording faster house price growth in the OECD area.

And although the rate of increase has moderated in the past year, it is still running at close to 10 pct a year.

Household indebtedness reached more than 115 pct of disposable income last year, up from around 45 pct in 1996, increasing the vulnerability of households to further increases in interest rates, the organisation said.

This also poses risks to macroeconomic stability and the government should therefore take steps to stabilise the housing market. It should phase out the various forms of assistance to home ownership to reduce distortions in the property market, the OECD said.

Reducing Spain’s inflation differential with the rest of the euro zone would also help stabilise the property market because it would lead to a rise in the currently very low level of real interest rates.

Narrowing the inflation gap should be one of the key priorities for Spain, the OECD said.

‘Reducing the consumer price inflation differential with the euro area, which has reached a cumulative 10 percentage points since 1997, is a priority objective. The erosion of competitiveness that is implicit in this trend is worrying,’ it said.

And it said the problem could become more serious if growth slows.

‘The losses in competitiveness induced by this inflation problem would be particularly damaging in case of a weakening of domestic demand and if the recovery in the euro area proves to be weaker than expected,’ it said.

Story from forbes.com

The latest figures from the National Institute of Statistics show that 3,880,000 of Spain’s official population of 44,390,000 million are foreigners. This is 8.7% of Spain’s population.

Statistics from the 1st January 2006 show that in fact the population has risen to 44,395,300 - an increase of 132,000 since the same date last year. The number of officially registered foreign residents has also risen over the same period.

Within the automomous regions the Baleares is the place where the largest numbers of foreigners live making up 15.6% of this region’s official population. Valencia, Murcia, Cataluña and Madrid follow. The regions with the smallest numbers of foreigners are Extremadura, Galicia y Asturias with only 2.5% of their official population made up of foreign residents.

Morrocans followed by Equatorians and Rumanians are the largest foreign groups living in Spain. There are roughly the same number of male and female offically registered foreign residents.

Story from euroresidentes.com

While the price of second homes rose 8.2% in Barcelona, 5.2% in Madrid and 9.8% in Valencia last year, idealista.com believes this could be the last year of strong increases.

Based on an analysis sample of 32,539 second-hand homes from Barcelona, Madrid and Valencia, the second-hand home price evolution report from idealista.com found that prices have risen but more slowly. For example, Barcelona’s 8.2% rise in 2006 compares to 15.2% in 2005, and Madrid’s increase of 5.2% compares to 7.3% in 2005.

Barcelona has seen the lowest increase since idealista.com began analyzing the second-hand home market in 2002, and is still the most expensive city in Spain (at €4,865 per m2). The slowest rises were in the most expensive districts of Gràcia (6.4%), L’eixample (6.7%), and Sarrià Sant Gervasi (9%). The biggest rises were in Les Corts district (15.8% up to €5,657 per m2), Sants-Montjuïc (apartments up 14.4%) and Sant Andreu (up 13.4%). Overall there was a pronounced slowdown in the second half of 2006, with increases of 0.7% and 0.9% in the third and fourth quarter of the year.

The municipalities performed better, based on the migratory flow from the capital. Badalona, which rose by 9% in 2006, has grown by 22.3% since 2005. The biggest increases in 2006 were in Prat de Llobregat (average prices up 16.2%, to €3,575 per m2), Castelldefels (15.6%; €4,157 per m2) and Viladecans (15.2%; €3,570 per m2).

Growth in Madrid’s districts has been falling steadily, from 7.3% in 2005 to 5.2% in 2006. The highest increase was in Carabanchel (up 12.4%), followed by Villa de Vallecas (9.7%), Moratalaz (9.1%), and Moncloa (8.9%). The lowest rises were in Vicálvaro (‘.8%), and San Blas (2.7%). In the fourth quarter of 2006, prices in Madrid increased by 0.7% (compared to 0.6% in the third quarter).

In its municipalities, Brunete saw the biggest rise of 17,8%, followed by Boadilla del Monte and Pozuelo de Alarcón (up 15% and 14.6% respectively). The lowest were recorded in Torrelodones, up 1.4%, Sevilla la Nueva (2.9%), and San Sebastián de Los Reyes and Tres Cantos (at 3%).

Idealista.com believes that the second-hand home market in Valencia ‘has ripened and is preparing for a cycle change’, with average prices remaining under €3,000 (at €2,747 per m2). Three districts saw rises above 15%, including Algirós (17.8%), Campanar (17%), and El Pla del Real (15.2%), compared to much lower rises for Benimaclet (3.9%), Poblats Maritims (7%), La Saïdia (8%), Patraix (8.2%), and Camins al Grau (9.9%). Ciutat Vella is the most expensive district in Valencia (at €3,630 per m2), followed closely by L’eixample (€3,607 per m2) and El Pla del Real (€3,512).

Report from idealista.com

Spain is the best market for long-term property investment ahead of France and Portugal - according to GE Money Home Lending (GEMHL).

The lender interviewed 100 mortgage brokers asking for short and long-term investment predictions. Bulgaria was seen as having the strongest house price inflation over the next year, followed by Spain, Portugal, Romania and France. Developing territories such as Dubai and Croatia also ranked highly. Florida placed strongly in both the short and long-term investment tables at sixth and fifth respectively.

Research showed that, overall, Spain still tops the list as the best long-term investment option. The lender advised agents and IFAs that findings showed clients are being influenced by a mixture of lifestyle and investment choices.

“Although new emerging Eastern European markets are looked upon as good short term investment opportunities, we can see that most Brits are looking towards their dream holiday home as a location they can retire to in future years and for ease of living whilst abroad,” said Gerry Bell, head of marketing for GEMHL. “What is interesting is the emergence of Florida as a key holiday home destination as flights to the US become more affordable, strengthened by the current excellent exchange rate and the ease of conversing in the same language.”

Best house price inflation – short-term v long-term

Over next 12 months

1. Bulgaria
2. Spain
3. Portugal
4. Romania
5. France
6. Florida
7. Croatia
8. Dubai
9. Italy
10. Germany

Long term

1. Spain
2. France
3. Portugal
4. Bulgaria
5. Florida
6. Italy
7. Romania
8. Dubai
9. Czech Republic
10. Croatia

Story from OPP

Buying a property costs twice as much as renting. Madrid is a city that has one of the lowest proportions of homes for rent in Europe. The demand for rent is five times greater than the supply in Madrid.

The monthly cost of renting an average property valued at 330,000 euros in Madrid, is 51 per cent lower than the cost of buying it. To buy a flat in Madrid you will need around 66,000 euros to pay for the deposit (the part not covered by the mortgage, i.e. 20% of the total) and almost 33,000 euros to pay tax, registration and legal fees (10%).

With a mortgage over 30 years, the monthly payments may be around 1,100 euros (with the current interest rates), to which we must add 100 euros for community fees, 30 euros for council tax and 80 euros, at least, for maintenance. All together, the cost of living in a purchased property in Madrid is around 1,475 euros every month.

On the other hand, the cost of living in a rented property of similar characteristics is around 900 euros, so the direct saving is 575 euros per month or 6,900 euros per year. If we look at the money not invested (the amount that stays in the bank and has not been used to buy a property) it would grow at a rate of 165 euros per month.

Therefore, the monthly saving would be almost 740 euros per month, around 8,880 euros per year or even 266,400 euros over the 30 years life span of the mortgage. In spite of the difference of prices between buying and renting, Madrid is one of the European capitals with the lowest rental rate in Europe (14%), compared to others like Berlin (70%) or Paris (55%).

Looking at the current rental market, demand is five times higher than the offer, which means that for every property available there are five people willing to occupy it. In fact, only 14% of the properties that are in Madrid are for rent (around 300,000), while there are an estimated 350,000 empty flats.

Full Story from Just Landed

Spain is a wonderful country. The sun shines most days and good food and drink is plentiful. It is a wonderful country to have a holiday home or to live.

More and more people are looking at properties further from the coast where prices are lower and plenty of bargains are still available. If this is you, then our advice is that you to keep this article. The reason for this is because a lot of these properties often have an illegal overbuild or they may not even be registered. As long as you follow some guidelines and you are aware of possible pitfalls, you’ll be alright.

No one likes paying tax, this very much applies to the Spanish too. It is not unusual for land to have been owned by the same family for centuries. Because one needs to start paying property/land tax as soon as it’s registered, this is put off until the land or property is sold. The tax is called IBI and it stands for Impuesto sobre Bienes Inmuebles. When you decide to purchase land, with or without property on it, don’t pay a deposit until a document called a Nota Simple is available. This is an extract of the deed. If the land is not registered there will not be one available. If there is a property on the land but the property is not specified on the Nota Simple, it is not registered.

Let’s start with the land. If this is not registered, a catastral number needs to be arranged. This is arranged through the Ayuntamiento (town hall). As soon as it has got a catastral number IBI is applied, probably with some delay. However this is not enough, it also needs to be registered in the land registry - Registro de la Propiedad. The time this takes varies from place to place. Don’t forget to agree with the vendor who is to pay for all these costs.

Then the property. Let’s assume the land is registered but not the property. The property needs to be at least 4 years old in order to have it registered. This is the period of time the local council has to discover illegal builds and to ask to have them pulled down. To have it registered a qualified architect needs to go to the property and measure the build. He will draw a complete plan of the property. This is then submitted to the town hall where it will be stamped and authorised for registration. It is at the notary you will subsequently have the property registered. This is the way it works in Andalucia. The law changed earlier this year. Before, it was sufficient that the architect’s report was stamped by the Colegio de Arquitectos in the area. This may still be the case in other parts of Spain.

When land or property has not been registered, there is always a risk there may be a charge by a private person or official body because of an unpaid debt, waiting to be added on once the property is registered. This is common in Spain to take a charge on a property to make sure the debt is eventually paid. When the land/property has been registered in the land registry there may be a note on the Nota Simple which refers to “La Ley de Hipoteca”. This is a warning to banks to say that during a period of time, normally between 2-5 years, the bank should be very cautious in giving a mortgage on this property, since during this period a charge may be taken against it. Banks in Spain insist on always taking the first charge and seldom accept a second charge.

We hope this information has been and will be useful. If you are faced with any of the above issues there are solutions to all. Remember, it’s when you have finance on a property most problems are discovered. Always make sure to use a professional broker who will at the end of the day be worth every penny.

Full Story at Just Landed

Plans for a rail tunnel between Africa and Europe have taken a step forward with the agreement by Spain and Morocco on a programme of engineering tests. Machines could be digging under the Strait of Gibraltar in five years.

The Spanish transport ministry said €27m (£19m) would be invested over the next three years in a geological survey of the rocks between Punta Paloma, on the south-western coast of Spain near Tarifa, and Punta Malabata, near the Moroccan city of Tangier.

A decision whether to start digging will be made in 2008. The tunnel would be 24 miles long, of which 17 miles would lie under the fast-moving waters of the strait.

Technical studies for three potential routes between the two points suggest that the tunnel could descend to between 100 and 300 metres under the sea.

The sea bed in this part of the Strait of Gibraltar, where the Mediterranean and the Atlantic meet, lies at about 300 metres at its deepest point. The route was chosen “because it is the one with the least depth of tunnelling needed”, the ministry said.

Experts said a tunnel of fewer than 12 miles would be possible further to the east, but it would mean boring 900 metres below sea level. The seabed deepened considerably at the shortest point between the two continents, the ministry said.

The proposed tunnel would copy the Channel Tunnel in having two rail tunnels with a service tunnel linking them. The service tunnel would be built first, and work on it could begin in 2008, the transport ministry said.

“The final route and the depth of the tunnel will depend on the geological studies, which require a series of complex tests,” it said. Relations between Spain and Morocco have begun to thaw after a series of spats, including the armed confrontation last summer after Moroccan forces landed on the tiny Spanish islet of Perejil.

The two countries have continuing disputes about immigration, farming and the sovereignty of two Spanish enclaves on African soil, Ceuta and Melilla. The agreement to go ahead with detailed engineering studies was signed by ministers from the two countries in Marrakech last week, but the details were not made made public until the weekend.

The tunnel would be shorter than the Channel Tunnel, which stretches for 31 miles. But once completed it could, nevertheless, cause many of the same headaches, especially with the strait being one of the most popular points for illegal migrants trying to enter Europe from Africa.

Security would almost certainly be an issue too, given that Morocco has suffered a series of suicide bombings and 41 people were killed in Casablanca in May. The two countries first began talking about a tunnel project in the 1980s, and both set up state bodies to help prepare the project.

The Spanish transport ministry said it had already bored an experimental tunnel 560 metres long. A similar tunnel on the Moroccan side had been sunk to 300 metres.

Story from guardian.co.uk

The construction boom on the Costa Blanca is leading to a situation where some towns have more homes than residents, it was revealed this week

A report released by Caja España bank shows the situation is worse in the Marina Alta and the Vega Baja.

Denia has a population of 40,601 people according to the January 2005 census. The number of homes paying IBI tax is 40,000, but town hall sources claim there are around 8,000 evading the payment, pushing the house figure way above the census.

Torrevieja is in the same situation. The recorded population is 92,500 residents and there are over 100,000 registered homes.

In Jávea there are 25,000 homes built and a further 1,000 under construction for a registered population of 28,242.

A large percentage of these properties are holiday homes and around 10 per cent are empty, either for sale, to let, or abandoned.

Figures in other Marina Alta and Baja towns are rapidly catching up say experts, with development schemes approved or to be allowed by general town plans (PGOU). In the case of the majority of Costa towns, the figure is of less than two residents for every property.

Problems come with the fact that while every home requires additional expense in matters of public services and maintenance, the number of tax-paying residents does not increase proportionally leaving town halls with a hole in the coffers and local taxpayers with higher rates.

Again, many residents’ reluctance to sign on the council register (Padrón) aggravates the situation because government funds for town halls increase according to the population, not the number of homes.

Story from Costa Blanca News Online

Is any property below €50,000 a cheap Spanish property? Are cheap Spanish properties only to be found at auction or as bank repossessions? How much below market value does a Spanish property need to be to be considered cheap?