The Latest Spanish Property News from Kyero.com

Around 5,000 offshore account holders who failed to let HM Revenue & Customs (HMRC) know about their overseas savings are being written to in the latest stage of the crackdown by the UK Government on tax evasion.

HMRC has sent letters to those who hold offshore accounts but did not reveal details of them during the amnesty between June 22 and November 26 last year.

Since the Revenue has obtained information on account holders through a number of banks, savings institutions and as a result of the European Savings Directive, tax evaders are running out of places to hide.

Nowhere to hide: HMRC has sent letters to those who hold offshore accounts but did not reveal details of them during the amnesty last year

Expats may have legitimate reasons for having an offshore account, perhaps to build up savings for a rainy day, or retirement, and others may be using them as an easy means of accessing their retirement income.

For example, anyone being paid a UK pension would need to have that money remitted somewhere, and it could be that these pensioners are unwittingly falling foul of the disclosure rules.

Gary Ashford, a tax investigations director at accountants Grant Thornton, said those who receive a form must send it back to HM Revenue, "which will use this information to verify an individual's reply and either let the individual off or apply penalty tax accordingly".

He added: "The letter in itself is no cause for alarm as many offshore account holders will not have used the offshore disclosure initiative because they had good reasons for holding an offshore account which they didn't feel required further explanation to the taxman.

"These individuals may wish to reply to HMRC with a valid reason as to why they have not disclosed the details of their accounts and expect to be bothered no more."

While the letter does not signify a formal inquiry, there will be people who have knowingly failed to disclose their account information, and they face penalties of up to 100 per cent of the tax due if they are caught, said Mr Ashford, and in exceptional circumstances, a criminal investigation.

He added: "If anyone in this situation receives a letter, they should comply immediately or face serious consequences. Individuals who have knowingly avoided paying tax on their offshore accounts should own up as soon as possible because HMRC is taking co-operation into account when determining any penalties, but HMRC has said penalties will be no less than 30 per cent of the tax due.

"Tax evaders had their chance to come clean and pay reduced penalties of 10 per cent last year. Now, HMRC is playing hardball and will be taking no prisoners."

The Association of Chartered Certified Accountants (ACCA) is recommending full disclosure and co-operation with the taxman on this.

Chas Roy-Chowdhury, head of taxation at ACCA, said: "This is a complicated compliance check by the taxman. They are depending very largely on the willingness of offshore account holders to inform the taxman of their financial details. But if this is not done proactively, the taxman will find other ways and means, such as targeting banks and finance providers. They are intent on getting the information they want.

"HMRC says that while there is nothing wrong in having an offshore account, the account holder does need to let the taxman know about any liabilities they may have - or face the consequences."

Full story from Telegraph.co.uk

Thousands of properties could be confiscated and ultimately demolished in the latest drive by the Spanish government to protect the nation’s coastline, it has been claimed.

Britons with homes on the Costas are among those at risk from a £3.5 billion campaign by the environment ministry to restore and protect coastal areas from over-development.

“This is the single biggest assault on private property we have seen in the recent history of Spain,” said José Ortega, a lawyer and the head of an action group launched in Madrid to challenge the Socialist government, which is using a 20-year-old law, the Ley de Costas (Coastal Law), to clear developments along 482 miles of coastline.

Under the plan properties built within 550 yards of the beach could be confiscated by the state and in some cases demolished. Even homes constructed entirely legally decades ago are being targeted. Some British home owners have already received notification that their property has been earmarked under the scheme.

Clifford Carter, 59, recently discovered that the villa he and his Spanish wife, Maria, have owned since 1976 is under threat.Their villa is one of 75 in a seaside development on the Costa Blanca, 10 miles south of Valencia, that has now been “rezoned”.

“Out of the blue we received a letter… stating that the home we have owned for over 30 years had been confiscated,” he said.

The couple, who spent holidays at the two-storey villa before selling their home in Croydon, south London, and retiring there four years ago, have been given permission to remain living there.

“Because we bought over 30 years ago we got a concession to stay in our home but our ownership has been taken away and we can’t sell it even if we wanted to,” he said, adding that they had hoped one day to leave the house to their two daughters. “The indication is that the house will be demolished but we haven’t been told when,” said the former electrical engineer.

“We feel devastated by what has happened. It is an absolute disgrace.”

The Carters are among 20,000 people to join an association established yesterday to protest against the government’s plans.

The protesters say the environment ministry is acting illegally by retroactively applying the Coastal Law of 1988 to properties built perfectly legally in the 1970s.

“The state is destroying property without any concern for the law or human rights,” said Mr Ortega.

“This will affect more than 500,000 people along the coast in Spain, of whom up to 100,000 are foreigners, including thousands of Britons. It is illegal and totally unfair. We already have 20,000 members whose homes are threatened with demolition.”

Announcing the plan last November, Cristina Narbona, the environment minister, attempted to placate owners by insisting: “We won’t be demolishing entire developments, even if they breach the law.”

The latest government drive will do little to reassure homeowners in Spain who have been affected by a string of recent scandals.

Local corruption and the flouting of planning laws have allowed swathes of Spanish coastline to be developed during the past decade.

The owners of 4,500 illegally built homes in Marbella are still fighting in the courts to prevent them being bulldozed.

In January on the Costa Almeria, Len and Helen Prior, a British couple, won widespread sympathy from the expatriate community after the home they had bought in good faith was torn down because it allegedly breached planning regulations.

They are currently living in a caravan on the site of their former three-bedroom villa and have yet to receive compensation.

Full story from Telegraph.co.uk

If you reside in Spain for more than 183 days in any Spanish tax year then you are obligated to pay your taxes to the Spanish tax authority on your worldwide income, gains and wealth. You do not have an option.

In addition, your assets may be liable to Spanish succession tax and if you remain a UK domicile, your worldwide assets will also be subject to UK inheritance tax (IHT), with double tax relief as appropriate. You always remain liable for IHT on assets located in the UK.

Spanish savings income is taxed at a fixed rate of 18% and basically covers your worldwide income from dividends, interest, life assurance contracts, purchased annuities and capital gains on the sale or transfer of assets.

Income not categorised as ‘savings’ income is taxed as ‘general’ income and includes all earned income such as that from salary, self-employment, pension, and rental income. General income is taxed over four income bands at the progressive scale rates from 24% to 43%.

It is interesting to note that anyone with funds in offshore accounts including the Isle of Man, Jersey or Guernsey who are paying the withholding tax under the Savings Tax Directive (STD) will soon be paying more in withholding tax than if the income were taxed in Spain. From July this year the STD withholding tax rate increases 33% from 15% to 20%. In 2011 it will rise even further to 35%, a massive hike of 133% from the initial 15% rate!

You can arrange for your bank to stop deducting tax and instead annually provide the Spanish tax authorities with information about your interest earnings. You would then declare the income on your Spanish tax return and pay 18% tax in Spain.

Even if you are paying the withholding tax, you are legally obliged to declare the interest earnings on your Spanish tax return, and also the capital for wealth tax purposes. Some people don’t realise they have to do this. If you have not been declaring the offshore interest for whatever reason, it is worthwhile taking professional advice rather than suddenly start to declare the income to the Spanish authority and have to explain why it was not declared previously.

Spanish succession tax (SST) is a tax on inheritance and gifts. It is paid by each beneficiary, providing the recipient is resident in Spain or the assets being gifted or inherited are located in Spain.

SST is set by the State but each region can vary the rules, rates and allowances to make them more favourable than the State rules. The regional rules will only apply if the deceased was habitually resident there for the preceding five years. In Valencia, the 99% reduction on the tax payable for direct line relatives only applies if both the donor and recipient were habitually resident for five years.

There is no blanket exemption between spouses as there is in the UK. Where a married couple are both resident in Spain, and one spouse dies, then the other spouse can be fully liable on the worldwide assets inherited from the deceased spouse.

Beneficiaries are divided into the four groups depending on the closeness of relationship to the donor or the deceased and the SST allowances differ for each group. The basic tax-free State allowance for close relatives and spouses is €15,956 and €7,993 for more distant relatives. For unrelated beneficiaries, including unmarried partners, there is no allowance. A 95% reduction is allowed against the main home (up to €122,606 per beneficiary) for close relatives, but only if they continue to own the property for the following 10 years.

Spanish wealth tax is payable by non-residents on Spanish assets and residents on their worldwide assets based on assets held at 31st December each year. The tax applies to your total net taxable wealth and is charged at scale rates over eight bands with the rates ranging from 0.2% for wealth valued at €167,129 and under to 2.5% for wealth valued at over €10,695,996.

The international clampdown on tax evasion received a significant boost with the introduction of the STD in 2005. Now even this is being reviewed and likely to be toughened following the exposure of banking clients in the tax haven of Liechtenstein.

Not paying your taxes is tax evasion and illegal. Paying your taxes in Spain can be cheaper than placing money offshore. If you already pay all your taxes in Spain it is quite possible you could lower your tax bill with appropriate planning. There are legitimate structures available whereby you can reduce the amount of Spanish tax that is due which can also lower the tax liability and hassle for your heirs. Talk to a qualified financial adviser to find out how paying Spanish tax could actually save you money.

Full story from www.blevinsfranksinternationa.com

Eager for any positive signs, the property industry closely followed the recent elections in Spain.

The reelection of prime minister José Luis Rodríguez Zapatero was seen as a new mandate for his socialist party (PSOE), which came to power four years earlier in the wake of the terrorist bombings in Madrid.

With the faltering construction industry a major segment of the economy, pressure will now mount for Zapatero and the socialists to address an over built housing industry which has grown too expensive for most Spaniards. Meanwhile, foreign investors face a slowing market with sagging values.

In the wake of the election, we asked three leaders in the Spanish property market, each with a different perspective, “What impact do you think the election will have on the property market?”

Carlos Ferrer-Bonsoms, national director, land & residential, Jones Lang LaSalle, a real estate consulting firm

“In my opinion, the results of the elections won’t have great importance in the real estate market’s behavior. These days our real estate market is suffering the consequences of an international finance crisis, which is causing trouble for sector companies, as well as private individuals interested in acquiring a house.

In the first case, the sector companies, there are some with high levels of bank indebtedness and the financial entities are not disposed to consider the refinancing operations that they need. In the case of private individuals, they are finding problems to subrogate their mortgages, and in many cases they are being asked to present more guarantees than they were before summer of 2007.

To sum up, apart from the political matter, we have to take into account that all the real estate market is intimately linked to the financial market. This financial market changed drastically last summer of 2007, and because of that, as long as it won’t become more flexible, the real estate market in general will remain in a restrictive situation.”

Martin Dell, co-owner, Kyero.com, a property portal

“According to the PSOE, they’re very focused on making affordable housing available to low income families and young people. They’re offering a €200 monthly rental subsidy to young people to dissuade them from buying at the moment—in an attempt to drive house prices down through “natural market forces.” I think the government will eventually acquire unsold newly-built housing at the developer fire sales and use them for subsidized housing.

They’ve also distanced themselves from ailing property developers and have refused to step-in with financial assistance. What’s more, they’ve announced measures to ensure that developers are more transparent in their dealings with government in the future. This is probably a roundabout way of them acknowledging that the kind of collusion between developers and local government that we saw in Marbella and elsewhere has got to stop.

For most people, it’s mostly good news. For those entitled to subsidized housing, there should be more of it available, at lower prices. For property owners who aren’t in any hurry to buy or sell it’s business as normal.

The worst hit in the short term will be buyers of off-plan property who, for whatever reason, are on a fixed timeline to sell. More than likely, the developer will undercut private asking prices with their own unsold units—and that’s assuming there are buyers available. New build starts have ground to a halt but more properties are coming on to the market every day as developers rush to complete so they can service their bank debt.”

Charles Svoboda, vice president, Abusos-Urbanísticos No, a citizen’s property rights group

“Property markets, like the economy overall in Spain, will stay shaky for some time to come, and that would have been true no matter which party won.

Promoters and developers have for too long called the shots and a massive oversupply of housing has been one unfortunate result. Dependence on construction as the “motor” of the economy has been another. But coupled with that, since the Socialists under Rodriguez Zapatero must now do deals with Catalan Nationalists and political groups even further to the left to govern, the needed strong measures to tackle key economic issues will be subject to negotiation, and may well be compromised. Property markets will follow suit. There is no doubt that housing has become unaffordable for most Spaniards entering the market, just as there are over three million unoccupied dwellings held by speculators.

If and when these units come on the market, the bottom will be a long way down. The government has promised to encourage these excess dwellings and new “social” housing to become available, and if it can deliver, this should push market prices lower.

Unfortunately, I don’t see that the reelected government in Madrid will have the confidence to introduce the needed measures to restore the all-time low consumer confidence level, or the economy, let alone the property market soon.”

Full story from The International Herald Tribune

After writing about the decline of foreign property transactions, I got my wrists slapped by Luisa at Mirodali Properties.

She quite rightly pointed out that, by combining sales figures for new-build properties and resales, I had (unintentionally) distorted the actual growth rates for each province.

This is because a new-build property essentially gets 'sold' prior to construction but the sale is only recorded after construction. Hence, the growth rates of new-build completions actually reflect buying activity that is two, three or more years old.

Compare this to the sale of a resale property which is notarised within a few months of a buyer saying 'Yes, that's the house I want' and you begin to see the problem.

By combining new-build and resales growth rates, I added apples and oranges and made bananas - my apologies.

Another facet I did mention but perhaps didn't stress enough is that the figures I analysed were for foreign buyers only - not all purchases.

Here's a revised spreadsheet (keeping apples and oranges separate this time).

Luisa was absolutely spot-on - mixing numbers for new-build properties and resales is meaningless. Here's what struck me when comparing the number of resales transactions between Q2 2006 and Q2 2007:

1. Overall, resales transactions dropped by almost 20% from 145,000 to 116,000



2. Andalucia resales fell overall by 13% despite 23% more purchases by foreigners. Spanish resale purchases fell by 17%.



3. Granada province was the jewel in the crown of Andalucia showing an overall 19% increase in resales transactions - a reflection of both Spanish and foreign buying trends.



4. Apart from Granada, every other province in Andalucia recorded an overall decline in resales transactions, despite increased activity in many provinces from foreign buyers. Spanish buyers, who account for approximately 85% of all resale purchases only increased their purchasing in Granada by 14%.



5. The Canary Islands overall saw 16% more resale purchases in Q2 2007 compared to Q2 2006 - largely thanks to 73% more foreign purchases but Spanish purchases increased by 4% too.



6. The Balearic Islands also saw a healthy increase in foreign purchases - up by 18% from 817 to 960.



7. Foreign purchases now account for 15% of all resales transactions. Proportionally, more foreigners are buying in Spain than ever before - favouring the regions of:
   
   Andalucia (up from 9% to 13%)
   The Balearic Islands (up from 20% to 24%)
   The Canary Islands (up from 17% to 26%)
   Valencia (up from 23% to 26%)
   Murcia (up from 23% to 25%).
   
   (Percentages are the proportion of all purchases made by foreigners)



8. Foreign interest declined in many regions - significantly in Calatlunya and Madrid - down by 10% and 25% respectively.

In summary, it seems as though Spanish buying activity is cooling faster than foreign activity. Perhaps this is because the Spanish economy is more reliant on the construction industry than elsewhere in Europe. In essence, as the construction boom has ground to a halt, there are more unemployed construction workers with less spare cash than previously.

Martin Dell, Kyero.com

According to Kyero.com, the Costa Blanca region, in the province of Alicante, is most the popular Spanish Costa – receiving 26.6% of all coastal property enquiries in Spain.

This area boasts a relatively large number of English-speaking residents, making it easier for relocating Brits to fit into everyday life, as well as a consistently warm climate that gives the Costa Blanca year-round appeal for holiday-makers. The Costa Blanca can also be said to be the most popular of the Costas because its house prices average at €237,000, 3% less than the Spanish average of €245,000, making owning a second home affordable.

Second most popular of the Costas, according to the latest Kyero.com figures, is the well-known Costa del Sol, in the province of Malaga, which gets 22.0% of the property portal’s Costa enquiries. This region has long proved popular with both tourists and property investors alike because of the excellent facilities on offer – including a wide range of shopping centres and golf developments – as well as the easy accessibility via air, road, rail and sea.

The Costa del Sol, along with the Costa Blanca, has a varied mix of nationalities calling it home and the area is especially popular with families. House prices, unfortunately, reflect this popularity with average Costa del Sol house prices ranking 21% above the national average at €297,000.

To the east, the Costa Tropical of the Granada province is third most popular, with 17.1% of enquiries. The Costa Tropical differs from the other popular regions because it is not so developed instead it is punctuated by many traditional villages and cove-fronted beaches, offering a more ‘typically-Spanish’ way of life for the foreign property purchaser. Interestingly, average property prices are much less than the Costa Blanca and the Costa del Sol with a typical house costing just €169,000, 31% less than the Spanish average.

At the other end of the scale, the Costa Verde, of the Asturias province in the north of Spain, ranks as the least popular of the Costas, with only 0.1% of enquiries about this area. This relative unpopularity with foreigners is reflected in the average house prices where properties cost just €156,000, 36% less than the Spanish national average. Again, this region is more undeveloped than the better known southern Costas, and this is one reason for its cheap properties. It is also more climactically unstable and therefore does not necessarily suit those looking for year-round sunshine, either for holiday rentals or for relocation.

Martin Dell, MD of Kyero.com, comments, “There is a great deal of variety to be found across the Spanish Costas, with much to offer those looking to invest in Spanish property. It is key that when looking to purchase in the Spanish Costas, you decide upon what is important for you and your family – be it excellent all-year temperatures, undeveloped beaches, first class facilities, value for money or breathtaking scenery – and then choose your Costa accordingly.”

Millions of savers are missing out on tax-free interest as nine in 10 Brits fail to make the most of their individual savings account (Isa) allowances, according to research from Lloyds TSB Savings.

Just 8 per cent of Brits use both their cash and stocks and shares Isa options each year, with nearly half of us admitting that we do not have any type of Isa product.

While the only expats who can access new Isa accounts today are those working for the Armed Forces or in the civil service in other roles overseas, even those expats who have Isa savings taken out before they left Britain should keep a keen eye on what is on offer at present, as they can move their money from one Isa provider to another to ensure they always get the best rate.

Yet nearly 90 per cent of those who have existing Isas have failed to switch providers, despite knowing there is a better rate available elsewhere, and a quarter say they cannot be bothered to switch, according to the research.

It is this kind of apathy that the providers rely on to make money out of us, and at this time of year many banks and building societies are offering top rates to attract last-minute Isa savers.

Liz Hogbin, savings and investments director at Lloyds TSB, said: "Sometimes shopping around can really be worthwhile and by resting on their laurels many Isa savers are actually losing out on easy money. For instance, the average interest rate on an Isa balance of £9,000 is 5.36 per cent, but by switching to an account offering 6.5 per cent you could earn over 20 per cent more interest tax-free for very little effort.

"Over a quarter of savers questioned did not realise it was possible to switch Isa providers and one in six thought it was only an option at the end of the tax year. Many are misinformed about the Isa transfer market, with one in four believing they would be charged an exit penalty to change providers and one in six not realising they could transfer their full balance."

Having the cash to spare does not appear to be the reason for the apathy either; one in three non-Isa holders had at least £1,000 to invest, and one in 10 had the full £7,000 allowance (due to be increased to £7,200 from April) stashed away in other accounts.

Independent financial expert Alvin Hall, who has written a "Guide to Understanding Isas", available at www.lloydstsb.com/savings, said: "If you've got the funds to invest in an Isa and you're not doing it, it's like throwing away free money. With the tax year end approaching, now is the time to use it or face losing the tax-free benefits altogether."

There are plenty of decent Isa rates available, but you have to be wary as some include bonuses which help them up the best buy tables. For example, Barclays currently has a top-paying instant access Isa - the Tax Haven Isa - paying 6.31 per cent on deposits starting from £1. The bonus of 1 percentage point is available for 12 months, so anyone taking this option would need to have another look at how that rate compares at this time next year.

But the building societies are offering some of the best rates around without the bonus tricks being used by some banks. Scarborough Building Society is offering a 30-day notice Isa paying 6.3 per cent, but you would have to deposit £1,000. Saffron Building Society's Mini-Cash Isa 60 Day Notice would pay you 6.25 per cent on £1,000, but again there is no bonus rate to keep an eye on. Mini-Cash Isas are one of the simplest Isa options, and also have a lower age qualification; 16 as opposed to 18 for standard Isas.

Some Isa providers will make it difficult for you to switch, and you should check for any potential penalties. The most important thing to remember is that you have to switch the money directly from one Isa to another, as if you take the money out of the Isa account, you will not be able to put it back in, and you will lose your allowance for that particular tax year.

Full story from www.telegraph.co.uk

Spain is calling for the British colony of Gibraltar to be blacklisted as a tax haven amid claims it shelters corrupt businesses.

Spanish authorities will this week ask the Organisation for Economic Cooperation and Development (OECD) to list the disputed territory as "uncooperative" because it is failing to help investigate financial corruption.

The Spanish Treasury Department claimed Gibraltar had not been forthcoming in helping to clamp down on Spanish tax evaders and money launderers.

The 2.53-square-mile territory has more than 28,000 registered companies and Spain said many of them operate outside the control of financial authorities.

Peter Caruana, the Chief Minister of Gibraltar, disputes claims that his government is being obstructive.

"If the Spanish government is saying that the Gibraltarian authorities are not cooperating with Spain in the way we cooperate with other countries, then that is simply untrue," he said yesterday.

The complaint is the latest in a series of attacks by the Spanish government against the territory and comes weeks after Gibraltarian and British authorities were criticised by Spain for failing to secure a stricken ship in disputed waters off the peninsula.

The vessel eventually broke up, causing an oil spill on Spanish beaches. The Spanish government summoned the British ambassador in Madrid for an explanation.

Gibraltar was seized by the British in 1704 with the Spanish ceding sovereignty in 1713 under the Treaty of Utrecht.

But Spain has retained a constitutional claim and calls for its return, an issue that has long tarnished relations between Spain and Britain.

The two nations considered sharing sovereignty, but in a 2002 referendum 99 per cent of Gibraltarians rejected the move and voted to remain a British colony.

In 2006 Britain, Spain and Gibraltar signed a historic agreement to solve problems that have coloured relations in the region for decades.

The Tripartite Forum, while leaving the subject of sovereignty aside, succeeded in negotiating deals on contentious issues such as border control on the peninsula.

Full story from www.telegraph.co.uk

Turbulence in the global economy is not putting Britons off buying foreign properties, according to new research.

Figures from the Association of International Property Professionals (AIPP) found that the number of overseas transactions went up by 21 per cent to 240,000 last year.

Many of these purchases were said to have been in established European locations, including France, Portugal and Italy.

However, Spain was named as people's favourite location, as it attracted more than a quarter of those who bought a foreign property in 2007.

Paul Owen, chief executive of AIPP, told Country Life that this finding could prove to be a surprise to some industry analysts.

He commented: "There has been some negative media coverage about the Spanish property market."

Despite this, the country has been rated highly in recent polls including a survey by A Place in the Sun magazine.

Research by the magazine found that it was Britons' favourite foreign property market for the second consecutive year.

Full story from www.propertyshowrooms.com

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One of Spain’s biggest private savings banks has slashed lending to property developers which are caught in a looming housing crisis and barely able to sell land or property, its head of property lending told Reuters on Tuesday.

Jose Aguilar Martin, head of real estate at Seville-based Cajasol, said the bank was not lending to firms building holiday homes on the coast nor to property developers planning to build in areas designated as ‘rural’.

Cajasol’s tougher policy towards property firms is further evidence that Spain’s unprecedented construction boom has come to a shuddering halt and of the dire financial straits in which many indebted firms find themselves.

“Real estate on the coast (for second homes) is not being financed, or at least only under very tough conditions. There’s no foreign market, the domestic market is really down and there’s no investment market either,” Aguilar said on the sidelines of a property sector conference in Madrid.

“Promoters don’t have income because they are not selling houses, simple as that,” said Aguilar, adding it was practically impossible for indebted property developers to sell land either.

Several Spanish property developers have filed for creditor protection in the last few months, while Barcelona-based Habitat last month staved off bankruptcy at the eleventh hour by refinancing 1.6 billion euros of debt.

Around 65 percent of loans made by Cajasol are connected with the property market or mortgages. Spain’s 45 ‘caja’ savings banks, partly owned by regional governments, have assets of just under 1 trillion euros and make around half of all mortgages in the country.

Aguilar said some 90 percent of property companies borrowing from Cajasol had asked to refinance loans since the property downturn began last year, though he stressed Cajasol had not lent to a handful of well-known developers whose debt woes are mentioned almost daily in national newspapers.

Cajasol’s non-performing loans are likely to “almost double” in 2008 compared to 1.17 percent of all loans last year, he said. All Spanish banks have said their level of bad loans will rise this year as the economy slows and as individuals and companies have difficulty meeting interim payments.

Other speakers at the conference also painted a grim picture of Spain’s real estate sector, which accounts for around one fifth of Spanish GDP and jobs.

Javier Lopez-Ulloa, from infrastructure and property firm Sacyr Vallerhermoso, said Spain’s housing sector would likely build 200,000 homes this year—around a third of the home starts seen in 2006 and 2007.

However Lopez-Ulloa and noted that sales had ticked up in February: “We’re not at levels from 2006 or 2007 but there is a substantial improvement. What we don’t know right now is if it’s a temporary situation,” he told sector players.

Aguilar said it was simply too risky to lend to developers who could spend seven or eight years getting permission to build on ‘rural’ land in a market where sales had plummeted and promoters debt levels were rising fast. “A year ago we lent to almost all of them,” he said.

Across Spain, unemployment is rising faster than anywhere else in Europe. Consumer confidence is at its lowest level since Spain’s last housing crisis, in the early 1990s, according to Eurostat and Bank of Spain data.

Cajasol, Spain’s ninth-biggest caja, is also not lending to build new golf courses – hundreds of which have sprung up across the touristy southern region in recent years. Around 65 percent of Cajasol’s loan portfolio is connected to housing – either to property companies or mortgages. With a small manufacturing base and little high-tech industry, Andalucia relies on tourism, and to a lesser extent, farming.

Spain’s biggest banks have emerged relatively unscathed from the global credit crunch, but some analysts fear some of the cajas might suffer the consequences of lax lending requirements, particularly if the Spanish economy slows sharply.

Aguilar said he estimated the bank currently approves only half of all mortgage applications compared to around 90 percent a year ago and he added that the overall level of applications had dropped significantly.

Full story from The Guardian

The Costas have long been a popular holiday destination with the Spanish, offering good weather, long sandy beaches and varied scenery. Since the booming development period of the 1950’s, these coastal areas have become synonymous with the typical ‘Spanish holiday’ for not only Spanish nationals but millions of international tourists each year.

Not all Costas are the same, however, and there is in fact great variety offered by the 4964 km of coastline with popular and somewhat expensive areas such as the Costa Blanca, Costa del Sol and Costa Brava at the fore of the public psyche when it comes to coastal Spanish holidays as well as little known Costas that have something different to offer both the holiday-maker and the intrepid property investor.

The Costa offering the lowest property prices is the Costa Verde – set within the Asturias province in the north of Spain – where the average property price, as of March 2008, is €156,000, 36% less than the Spanish national average.

The Costa Verde offers a somewhat quieter holiday experience than more developed Costas, such as the Costa del Sol, with peaceful beaches, and traditional, picturesque towns. One of the most varied regions of Spain, scenery ranges from rocky coastal coves to mountainous precipices encouraging the adventurous explorer to discover more about the region. However, one reason for the low property prices may be attributed to the more unstable climactic conditions, earning the wettest of all the Costas its name, Costa Verde, the Green Coast.

In contrast, the most expensive Costa is the Costa Maresme – in the province of Barcelona – where average house prices are high due to the excellent infrastructure and good economic prospects on offer.

Here, the average property price as of March 2008 is €599,000, 144% over the national average of €245,000. Interestingly, although still very high, house prices in this Costa have in fact fallen by nearly 3% in the last year from an average of €615,000 in 2007. However with an average price of €506,000 in 2006, there has still been significant growth of over 18% overall in the course of this 2 year period.

One of the most well-known of the Costas, the Costa del Sol in the province of Malaga, ranking third most expensive has also seen a drop in property prices. This established tourist destination, viewed by some as saturated with high rise developments, has seen average property prices decrease from a high of €308,000 in 2006 to €305,000 in 2007 and to a current average of €297,000 in March 2008.

This dip of nearly 4% could be seen as surprising due to the introduction in recent years of numerous new golf developments to the Costa del Sol making the area a Mecca for golf enthusiasts. However, the disappointing winter of 2007 for Costa del Sol tourism (as reported by the Association of Hoteliers) has accelerated this decrease in house prices, as has a move towards the cheaper and less developed Costas, this hitting areas such as the Costa del Sol hard.

One example of a Costa that is seemingly benefiting from this transition is the Costa de Almeria in the province of Almeria to the east of Malaga, which ranks as the third cheapest Costa but has seen a steady increase in property prices in the last 2 years.

From an average price in 2006 of €190,500 with an increase of 3% in the course of a year to an average of €196,250 in 2007, and up another 1% to a current average property price in March 2008 of €198,000, the Costa de Almeria is experiencing an increase in popularity. With great geographic diversity and an unspoilt coastline, it is easy to see why this area is seeing a rise in property prices. A warm climate and around 3,000 hours of sunshine a year sets it apart from other more affordable Costas such as the Costa Verde and therefore the popularity of this area is set to grow still further.

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As the Spanish property market continues to suffer from both falling sales and negative publicity, many property professionals talking to OPP believe not enough is being done to promote the sector’s interests abroad and to provide the British and European media with accurate information concerning recent land grab and corruption issues.

“We’ve had many recent queries from our customers worried about the current market in Spain and whether buying there is a sound investment,” said Nick Freeston, head of UK operations for Taylor Woodrow de España. “Last year’s news of a potential property price crash coupled with the current horror stories of illegal building practices and homes being demolished, has understandably unsettled those looking to buy there.”

While the current decline in the Spanish property market is widely acknowledged by most in the industry, how to tackle the problem, if at all, is a bone of contention for many property professionals. Chris Clover, CEO of Marbella-based agency Panorama, believes that the blame for the downturn in confidence expressed in Spain by the UK buyer, should rest at the feet of the British press.

“I do believe that this information must come out, however a lot of it is one sided and has been exaggerated,” he said. “When it comes down to it, the British press have the responsibility to investigate their sources, and the stories they are writing about, properly to provide a balanced perspective and to not let everyone think that every house on the Costa del Sol will be pushed over by the next bulldozer that comes along.”

However, several agents told OPP that there is no single information resource that British and other European journalists can access for relevant comment and opinions to counter the negative stories that have been coming out of the Spanish property market over the past 12 months.

Eugenio Sanchez-Ramade Garcia-Conde, UK MD, of Spanish developers Noriega, explained that the rule of divide and conquer is in affect across the country.

“Of course it is the role of companies in the first place to promote their product and the country, but the government needs to help with this a bit,” he said. “Spain is a victim of its own success and has marketed itself for a long time as separate destinations: the Costa del Sol, Costa Blanca, Costa del la Luz – for example. Each regional government has its own budget to promote its own areas and their efforts are diluted, there is not one single voice, the central government, to promote its cause.

“When you see Greece or Turkey advertised it is as the whole country and you never see that with Spain. It is undeniable that there have been problems, but they haven’t been explained properly. The G14 is trying to address this but they really only operate in Spain and aren’t too good at reaching the British media,” added Garcia-Conde.

The G14, a Spanish private sector lobby group made up of 14 of the country’s biggest property companies, was formed last year to help promote the country’s property market in a positive light across Spain and around the world.

“It would make sense for the G14 to try and push for change and coordination,” said Mark Stucklin, MD of Spanishpropertyinsight.com. “It seems to me that they are focused on lobbying the Spanish government to put pressure on the banks to help ease liquidity problems and to obtain subsidies for the industry – they are focusing on survival and things are very serious. However, they are not awake and I have seen no evidence of other developers addressing the problems in the market. I run an annual senior management executive education programme focusing on sales and marketing at Spain’s leading business school and I have been telling developers for years they need to get together and promote the industry, however it hasn’t led to anything. The pressure is building though and eventually the sector will have to do something to manage its image abroad.”

“The G14 have got it 100% wrong,” added Martin Dell, MD of Kyero.com. “When they issue a press release, it’s blindingly obvious that their motives are 100% self-serving. Buyers are better than ever at spotting this and so they learn to ignore everything that the G14 will say for the foreseeable future and they are ‘PR-ing’ themselves into obscurity and irrelevance.”

OPP has tried to contact several companies that form part of the G14 for comment on this story over a period of months, to ask how the property sector should work on promoting, and safeguarding the Spanish property sector, but none were available to offer comment.

Dell added that he believes Spain doesn’t need promoting at all, rather rational government policies and property professionals that act in the best interests of their clients.

“The buying public are ever better connected, educated and informed. For that reason, marketing spin and hype work less and less effectively each day. Buyers know that it’s a buyers market right now and if agents want to stay in business, they need to provide superior service without charging a premium.”

Stucklin commented: “I certainly think that there has to be some sort of professional body that has a common interest in promoting the country. This is a multi-billion Euro industry and property is being sold to British and international buyers without any organization or co-ordination to promote its interests. It is amazing that nothing has been done.”

Full story from OPP (subscription required)

Unlike other areas of Spain the Murcia region experienced a seven per cent growth during the last quarter of 2007.

Those looking for a property on the costas, without paying premium prices, should head for the Costa Calida in Murcia.

Resorts such as Mazarrón are still fairly untouched by mass tourism, and property here can still be snapped up at reasonable prices.

Investors need to hurry though, as it is is quickly catching up with the other costas.

A lot of money has been put into attracting tourists to the area, and a new marina opened in Puerto de Mazarrón last year. There are also a wealth of new shops, restaurants and café bars opening in the resort, which are due to be ready for the summer season.

There are a range of properties in the area, from resales to off-plan homes on new developments. It is still possible to buy a two-bedroom apartment on a complex, with a sea view, for €200,000, and one-bedroom apartments at the Polaris World Golf development, which is home to three Jack Nicklaus-designed courses, and 20 minutes from the beach, start from €90,000.

Good deals and flexible payment plans from builders and developers, ensure the off-plan market Mazarrón is still strong.

As well as the new marina the Town Hall has introduced another incentive to attract foreign visitors – a translation system. British residents and visitors can now get linguistic assistance by use of a headset. The system uses a mobile phone and two sets of headphones and can provide a simultaneous translation in either English, French, German or Arabic.

This is a pilot scheme in the region and it should also be available in Puerto de Mazarrón in the near future.

Around 46 per cent of the population in Mazarrón are non-Spaniards, so the new service is geared towards residents who speak little or no Spanish.

Full story from homesworldwide.co.uk

When we launched the Get Answers feature on Kyero.com a few weeks ago, one of the questions you asked most frequently started along these lines ..

What’s it like in (name of location)?

We’ve just launched a couple of new features which help to answer those questions.

Thanks to a relatively new service from Google, we can now show you pictures of virtually anywhere in Spain. The Spanish photo-sharing web site, Panoramio, was purchased by Google last year, and what makes it particularly useful is that their photos are about places, not people and they can be requested using location coordinates.

Anyone can upload photos to Panoramio and now we automatically display the twenty most popular photos for any town, province or region.

Just click the Pictures of … link on every page of search results and every property page.

If you want to see more photos or display them inside Google earth, click the Panoramio link on any of these pages and you’ll get taken straight to the relevant page on Panoramio.

A picture speaks a thousand words but words are still far from redundant! To compliment the pictures from Panoramio, we’re also working with the open encyclopedia, Wikipedia, to display some descriptive text about each location.

This is a bit trickier because each location needs to be manually edited and approved but we’ll have the whole of Spain completed in a few weeks time. For now, here’s an example about Andalucia – cool or what?

Now, here’s the interesting bit. We didn’t invent these ideas – you did. We didn’t do all the hard work of uploading photos and writing about locations – you did via Panoramio and Wikipedia. We simply took your comments and questions and made it more convenient for you to access information which already existed.

So, I wonder what else we could build together?
Will you take 2 minutes to tell me?

In the last 12 months, we developed almost 3,000 new projects on Kyero.com. Some of them were tiny, some huge. We currently have a development backlog of over 200 projects. Some of them are probably more important to you than others. Some of them might be vital to us, but trivial to you. Some of them will probably never get done at all.

Rather than asking you to prioritise 200 software projects, would you mind answering 5 questions? I’d really appreciate it and, you’ll get more of what you want from Kyero.com, more quickly.

I hope you agree that this information from Panoramio and Wikipedia is a useful and convenient way to help you get to know the place you’re considering buying or renting in. Let’s build more stuff like that together – let us know what to focus on next by answering some or all of these questions.

---

The thing that bugs me most about Kyero.com is ..
When I search for Spanish property, I wish that ..
When I view property details, why don’t you ..
Kyero.com would be a lot better if ..
I’d buy property in Spain if it weren’t for ..
Thanks for your help. I’ll summarise your feedback in a future article. Martin Dell, Kyero.com

Tenerife is leaving behind its lager-lout image and attracting the champagne set – but prices on the island have yet to catch up.

When Darren Richards sold DirectDirect.com, the online dating service he founded, for almost £30m last year, it wasn’t to the obvious millionaires’ playgrounds that he headed with his spoils. He bypassed the palm-fringed beaches of the Caribbean, gave Marbella’s gated communities a wide berth and Dubai’s Palm Jumeirah a miss. Instead, he chose that winter-sun hot spot so beloved of the British holiday-maker: Tenerife.

“I was here on holiday last May,” says the 41-year-old from Kidderminster, Worcestershire, “sitting in a bar in Playa de las Americas with a friend, and I just thought, ‘This is the life. Let’s buy a bar.’ ” The series of resorts in the southwestern corner of the island, stretching a few miles north along the coast from the former fishing village of Los Cristianos, through Playa de las Americas and beyond, tend to conjure up images of 24-hour partying and cheap package holidays rather than millionaires looking for the high life. Yet Richards, single, despite his professional experience of the dating game, fell in love with the island, where temperatures in January and February regularly hit a balmy 25 degrees. “I think it’s great,” he says. “Everything is here. And, with just a four-hour flight, I can easily commute back to England when I need to go.”

He now owns two bars, a two-bedroom flat, bought for about £165,000, and a two-bed, five-storey £890,000 villa in Torviscas Alto. In this dramatic hillside area, on the outskirts of Playa de las Americas, a typical fourbed villa with private pool will not leave you much change from £600,000.

He has just bought another nearby home for £1.4m. Known locally as “Puff Daddy’s villa” for its sheer luxuriousness and no-holds-barred furnishings, it was completed last year for a wealthy German. Along with seven bedrooms, Richards inherited ornate Versace-stamped glasswork, red-velvet Bretz chairs shaped as musical notes – each worth thousands of pounds and with its own document of authenticity – and views of the neighbouring Canary island of La Gomera.

“I’ve also got a 50ft Sunseeker moored down there in Puerto Colon,” he says, as he stands on his landscaped terrace, pointing out the marina in the distance. “The only problem is the pound/euro exchange rate [1:1.3]. It’s a killer.”

A few minutes’ drive away, in the hills of San Eugenio, again overlooking Las Americas, sits a palatial mansion for sale at £4.1m – a record-breaking price for the area, and probably the whole island. With 1,500 square metres of living space, the villa has five bedrooms, all with ensuite bathrooms, three reception rooms and a huge pool area with far-reaching ocean views. SpencerGrindley Exclusive Homes, the agency selling the villa, says “a famous European pop star”, keen to build a recording studio in the basement, has shown interest. Elton John visited the island in January to perform his first show there – but nobody is saying if it’s him.

The style of such villas – not to mention their price tags – illustrates the sharp move upmarket of what used to be considered one of Spain’s less prestigious destinations. A 15-minute walk west of the boardwalk bars and gaming lounges of Las Americas is the beachside strip known as Costa Adeje, and its hottest new spot, Playa del Duque. Portrayed by estate agents and hoteliers alike as evidence of the new celebrity-strewn Tenerife, the area is thoughtfully planned, with five-star hotels and a pristine, white-sand beach with trendy bars, where you can lie back on a cream-cushioned lounger and enjoy a glass of Viña Norte, the local wine. It also has a shopping centre, the Plaza del Duque, full of designer brands.

The five-star Gran Hotel Bahia del Duque, with recently built luxury villas and a brand new spa, is a favourite with Mariah Carey and J.Lo and her husband, Marc Anthony. Opposite the beach, Habitats el Duque, an ultramodern development of grey stone and white concrete villas, is almost complete. One of the flats, with three bedrooms, three bathrooms and Poggenpohl kitchen, is being marketed by Del Duque Properties for £690,000.

For something more traditional, go to neighbouring Fañabe beach (the “Mayfair of Tenerife”, as the island’s estate agents like to call it), where the Villas del Duque complex is situated. A three-bedroom candy-coloured villa here, with balcony, marble-tiled floors and a private pool, is for sale with Tenerife Property Shop from about £400,000. As everywhere in this area, you are only ever a stone’s throw from the Sahara-sand beach and the pristine greens of Golf Costa Adeje.

However, if you are more of an architecture junkie than a golfing or shopping one, thesouthwestern littoral of Tenerife has something else to offer: innovative design. Palm Mar, a new residential area 10 minutes’ drive south of Playa de las Americas, is a world away from the 1960s-style blocks and multi-pool resorts of old.

Combining award-winning architecture with a nature-reserve setting, a mountain-range backdrop and Atlantic views, Las Olas is an ultramodern complex of flats, set around lagoon-style pools, waterfalls and 500 palm trees. Plus, it has views up to the snowy peak of Mount Teide – Spain’s highest mountain – in the centre of the island. Two-bed flats, due for completion later this year, cost from £170,000; two-bedroom penthouses, with private plunge pools on wooden decks, cost from £315,000, through Tenerife Property Shop.

If you want something more hands-on, head inland, where there are plenty of opportunities to get your teeth into a renovation project and create a home in near-perfect peace and rural beauty. “These days, there’s a more discerning type of Brit looking for properties in the countryside, so they can get away from it all,” says Lee Morfitt, director of Crossley Morfitt & Lennox estate agency. “And you get much more of a feel for the island’s rural culture.” Morfitt says there are a number of run-down farmhouses for sale, ready to be transformed.

For example, take the single-track road from Costa Adeje towards the improbably shaped volcanic peak of El Chorro, set among dramatic green hills and indigenous cacti, and it’s not hard to imagine the traditional life of a Tinerfeño. Here, 3,000 ft above sea level, where the air is cool, you are in hikers’ heaven, yet only a 20-minute drive from the beach. Crossley Morfitt & Lennox is marketing a 90 square metre brick-and-timber finca, complete with a turning circle for a donkey plough, on a 5,000 square metre plot, with views over the Atlantic, for £70,000. Morfitt estimates full renovation would cost £150,000.

So who is actually buying here, and is it a good bet? About 42,000 Britons now own property in Tenerife, continuing a connection that began in 1797 when Nelson lost his arm in the battle of Santa Cruz. Leslie Beeson, of Tenerife Property Shop estate agency, based in Playa de las Americas, says the clientele has changed dramatically over the past decade. “People used to come here wanting to turn a fast buck on a holiday home, but increasingly, they are planning for their future,” he says. “They are on the run from the British weather, looking for good quality of life. They also have a lot more money to spend than, say, 10 years ago.”

Bill Blevins, director of Blevins Franks International, which provides financial advice to expatriates throughout Europe, thinks Tenerife is still underpriced compared to the rest of Spain. “It’s a good long-term bet,” he says. “High-density tourism is bringing better-quality homes and resorts, plus golf courses, and the infrastructure on the island has been greatly improved in recent years.”

So far, at least, Tenerife has been immune to the drastic price drops experienced on the mainland, but with prices generally 30% lower than on the Costas, there is plenty of affordable property. If you don’t mind the occasional waft of McDonald’s floating past, you can still buy a roomy one-bed flat, with beach views and use of a shared pool, for less than £100,000, near the nightspots of Playa de las Americas. And, these days, you’ll be more than likely to bump into a multimillionaire.

Full story from timesonline.co.uk

It's an uneasy time for savers and investors. Stock-markets have been unsettled by the sub-prime crisis, US recession fears and their effect on the global economy. Inflation in the Eurozone has hit a 14-year high. UK interest rates (where many expatriates keep their savings) are falling. Euro interest rates will probably also be cut. People are questioning how safe their money really is in the bank. In view of this background, what steps can you take to protect your wealth, today and for the future? There are various different aspects to consider if you wish to maintain long-term financial security.

Bank savings

Recent events have damaged the banking industry's reputation. The public now realises that banks can suffer financial difficulties and take risks with your money. There is concern that the full extent of the credit crunch is still unknown - between $300 billion and $500 billion may have been lost but only around $100 billion has been admitted to. The exact effect of the crisis on the banks we use yet to be established. You may be surprised at the low level of depositor protection offered by the jurisdictions favoured by expatriates for their savings. The UK's Financial Services Compensation Scheme covers the first £35,000 of your savings with an institution (not per account) and the Chancellor wants to increase this limit. However, if you bank with an offshore subsidiary of a British bank, you are not protected by the UK rules but those of the jurisdiction the bank is located in. The Isle of Man offers protection of 75% of the first £20,000 per individual. Jersey and Guernsey have no depositor protection scheme.

If you have large sums of money in the bank you could move some of it into a structure whereby your assets are segregated from management firm's corporate assets your money will not form part of the firm's balance sheet and not be exposed to its credit risk. This would be the case, for example, if you moved your capital into an insurance bond wrapper based in Luxembourg. Luxembourg's high level of investor protection makes it the safest place to hold assets in Europe.

Investment assets

In times of stock-market volatility it is tempting to change your asset allocation in favour of low risk assets or put your investment capital back in the bank. However, your portfolio should be designed around your specific circumstances, objectives, time horizon and risk tolerance, and not in response to temporary market conditions.

It is possible that your portfolio needs to be rebalanced, but this would be because your situation has changed or the risk level of the assets you are invested in has shifted. The current climate makes asset allocation even more critical so this is the time to seek proper financial advice. You cannot predict which asset will produce the best results for you this year, next year or in the five years time. It is therefore necessary to have a suitable mix of assets within your portfolio, with various levels of diversification within each asset where appropriate. Then let your portfolio work over the long-term, rather than trying to time the market or making changes every time the economic background changes.

Taxation

You should also look to protect your income and wealth from unnecessary taxation. Effective tax planning is a key part of protecting your savings, since paying more tax than necessary erodes your income and savings. Spanish succession tax (and possibly also UK inheritance tax) can also significantly reduce the amount of inheritance you leave your heirs. The general perception was that keeping money in offshore savings accounts was the most effective way of paying less tax. Not any more. Today it is possible to use onshore structures, and fully declare your income and wealth in Spain, and pay less tax than if you left all your money in an offshore bank account.
Such tax mitigation can be combined with your investment planning, and placed within the secure environment of Luxembourg - keeping life simpler, more cost effective, and giving you peace of mind.

Regulation

There is another key aspect to protecting your money - your choice of financial adviser. You should ensure that your adviser is competent to give you the advice, has appropriate experience and is regulated. If the adviser is not regulated to give advice in your country of residence, you'll have no recourse against him should anything go wrong with the advice he/she has given you. Nor would you have an official organisation to complain to or to assist you.

If your financial planning needs to take your home country into consideration as well as Spain, it makes sense to have an adviser regulated in both countries. A British expatriate would appreciate having an adviser who's regulated by the UK's Financial Services Authority, considered to be one of the best in the world. However if you live in Spain your adviser also needs to be regulated here. The EU Insurance Mediation Directive allows FSA regulated advisers to establish businesses in other EU countries - this is called "passporting" and is the ideal situation for British expatriates living in Spain.

Full story from Bill Blevins of Blevins Franks

Earlier this month easyJet announced a new flight to Palma, the capital of Mallorca, from East Midlands airport three times a week.

This is in addition to its other flights serving the island from Belfast, Bristol, Edinburgh, Glasgow, Liverpool, London Gatwick, London Luton, London Stansted, and Newcastle, making Mallorca accessible from pretty much anywhere in the UK, for a reasonable price.

With low-cost operators BMI Baby and Monarch also flying to the island, it has already witnessed an increase in visitors which is now set to continue further.

The extra flights have also lead to more people from the UK buying property on the island, either as a holiday home, which is easily accessible from the UK, or for letting out to holidaymakers.

Despite the anxiety surrounding other parts of Spain at the moment Mallorca is still a very safe investment. Property prices are pretty much guaranteed to remain steady due to the fact there is limited land available for new construction, so any existing properties on the island will be in high demand.

Mallorca is one of the most expensive places to buy in the Iberian peninsula but with 300 days of sunshine every year, 23 golf courses, 25 marinas, as well as some of the most stunning scenery in Europe, it is money well spent.

The rise in prices on the island does not seem to have put off British investors. According to an article in the Daily Telegraph, 11,000 now own a holiday home in Mallorca, or are based on the island.

New roads in the north have now made small mountain villages more easily accessible and the coast benefits from natural harbours.

It is not surprising then that Mallorca has also attracted quite a few celebrities, with Catherine Zeta Jones and Michael Douglas owning a holiday home in the village of Deia. Andrew Lloyd Webber, Boris Becker, and Claudia Schiffer, are also on the star-studded list of those who have homes on the island.

Anyone owning a property close to the sea can certainly celebrate. Mallorca has had a ban on any development within 25 metres of the coast for several years now. Therefore, anyone owning a beachfront property knows they have something unique and when any do go on sale they command very high prices.

Full story from www.homesworldwide.co.uk

Most residents living in the Spanish village of La Viñuela in the Axarquía, Málaga province has received a letter from the local town hall. It asks them to pay a so-called ‘voluntary tax’ of between €6,000 and €12,000 in order to legalise their unlawfully constructed home.

Around 50 of the inhabitants affected are British, some of who have already paid this peculiar tax. However, it seems that the town hall request for the ‘voluntary tax’ is itself “illegal” and so those who have not already paid this toll should seek legal advice regarding the situation.

Spanish legal expert Jordi Sanchez-Tort of the International Property Law Centre stated that such letters “would be contradictory and void under Spanish Law.” This is because the adjective “voluntary” does not appear within the definition of Spanish tax.

Sanchez-Tort added: “In this case, residents have been affected by a request from the town hall, asking for a voluntary tax to legalise their homes, thus suggesting that their homes are currently illegal. This is contradictory; if a construction were illegal this would be due to the developers non-compliance with the town planning regulations, not because of non-payment for a specific licence or permit. Therefore payment of such a voluntary tax logically would not lead to an illegal property becoming legal. The procedures to legalise illegal constructions are regulated under Spanish Law, and does not include payment of a "voluntary tax”.

Full story from www.homesgofast.com

La Reserva del Madronal is one of Southern Europe´s finest addresses, located next to the famous La Zagaleta Country Club, just a short drive from the designer bars and boutiques of Europe´s premier yacht harbour, Puerto Banus.

This private estate is home to the rich and famous – hardly surprising given that it offers the discerning buyer total privacy and 24 hour protection. Majestic villas and mansions dot the dramatic landscape, and with a minimum plot size of 3,500m2, owners can be sure of one thing – guaranteed exclusivity.

A sought-after plot of land of 5,668m2 within the estate is now available a fantastic price of 395,000 euros – that´s around 70 euros per m2.

In addition to the plot, there’s the possibility of a fully managed project to develop a sumptuous 5 to 7 bedroom mansion, with luxury specifications to include beamed cathedral ceilings, luxury kitchen and bathrooms, and a large heated swimming pool.

Total build costs for this particular house-plan are anticipated to run to approximately 900,000 euros, meaning a likely total project cost of around 1.3 million euros.

When you consider that comparable completed properties within the same estate are currently being marketed for between 2,000,000 euros and 4,000,000 euros, you can see the potential uplift that may be available to the savvy investor.

Total project timescale (from purchase of the land to completion of the build) is 18 months – 2 years. Access to specialist purchase and tax advice, together with superb interest-only mortgages to facilitate the build, based on up to 70% of final estimated project value are also available (subject to status and usual lending criteria).

More information from Your Key To Spain

Yes, there is hope for the overseas property industry. In AIPP Takes Action we see the first public shaming of a company that has failed to live up to a set of standards they volunteered to uphold.

I’m not at all familiar with the specifics of the case but I’m delighted that, as an organisation, the AIPP has chosen to flex their muscles and make it clear that they will not support the behaviour of errant member companies.

Reading to the end of the article, I also discovered that the AIPP has been responsible for bringing about financial settlements to the public to the tune of £76,000 to date.

Where you see the badge of AIPP membership, you know that a company has signed up to follow and be bound by a set of rules that establishes minimum standards of professional and ethical behaviour.

I fully endorse the aims of the AIPP, and it’s why, even though we don’t sell property directly, Kyero.com became members back in 2006.

Remember our cost of living survey? Here are the results in summary. It wasn’t an easy set of numbers to compare because prices vary considerably by region and lifestyle – but hopefully this establishes a baseline for you to work from.

A basic cost of living of €644 per month tallies quite well with my own experience over the last 6 or 7 years in Spain. We lived in Girona province for the first year and have been in Granada province since then and can attest to the significant difference in costs between these two provinces.

We’ve also seen costs increase while we’ve been here (it would be surprising if they hadn’t). The introduction of the Euro was certainly welcomed by retailers as an opportunity for some ‘rounding-up’ of prices, and fuel-related costs have risen.

Overall, I would agree that you can use the ‘two-thirds’ rule to guesstimate your cost of living in Spain – for most areas. Simply take your current UK costs and take off a third. Assuming that you don’t change your habits and lifestyle dramatically, this should be a good starting point in predicting your cost of living when arriving in Spain.

What’s difficult to anticipate is how your lifestyle will change when you arrive in a new country. Longer, sunnier Spanish days might mean you spend more time doing nothing (for free) or you might experience a sharp increase in socialising at whatever cost that might incur.

Years ago, when working for an American company in the UK, it seemed to me that prices in the US were the same as the UK – just the currency changed. Now it seems the same applies to Spain and the UK. What costs a pound in the UK will probably cost you a euro in Spain today.

Martin Dell, Kyero.com

The results of our Cost of Living in Spain survey are in. On average, a couple can live on € 644 per month in addition to any rent or mortgage payments.

Taken from a wide range of locations in Spain and calculating average (median) monthly figures, visitors responding to the Kyero.com survey gave the following figures:

One-off Charges

Gas Bottle Deposit	€ 25
Telephone Installation	€ 107
ADSL Installation	€ 50
Satellite TV Installation	€ 500
One-off Total	€ 682

Monthly Charges

Buildings Insurance	€ 17
Contents Insurance	€ 8
Council Tax	€ 20
Community Fees	€ 20
Administrative Fees	€ 7
Electricity	€ 50
Gas	€ 12
Telephone Standing Charges	€ 20
Telephone Calls	€ 30
ADSL	€ 40
Mobile Phone Calls	€ 28
Car Insurance	€ 35
Car Road Tax	€ 7
Car Service Costs	€ 30
Grocery Bill	€ 300
Satellite TV Subscription	€ 20
Monthly Total	€ 644

A visitor living on the Murcia / Alicante border on the coast summarised the cost of living in Spain: “Most things are two thirds the cost of the UK, however, the odd thing like phones and adsl are considerably more due to the Telefonica monopoly”.

Communication costs seem to be higher in Spain (or cost the same as the UK but for a lower level of service) – mainly due to the lack of competitive forces in the market. One respondent from Spain’s most affluent province, Girona, added: “Living in Spain did seem cheap when there were no bills to pay but .. electricity is expensive and petrol costs have gone up. I wouldn’t say living in Spain is cheap.”

A visitor from Huelva province – an area that has seen very strong house price increases in recent years agreed: “Market, supermarket and household commodity prices are continuously spiralling in line with fuel cost increases.”

If the cost of essential purchases in Spain are increasing, it seems that the ‘little extras’ still compare well to UK costs. One visitor compared London to Almeria: ”.. Having come from London where we would say it costs 50 quid to walk out the door, here it costs us a fiver – and that’s drinks and tapas for two!

Another respondent from Murcia agreed: “Average meal out in Spain for two with bottle of wine under 25 euros. In UK in excess of 55€.”

Perhaps the secret of living cheaply in Spain is to live like the locals? “Groceries depend upon how you live – if you insist on English bacon, it costs are a lot more than if you buy local produce”.

Choosing the area of Spain in which to live also has a big impact. Provinces like Barcelona, Madrid and Girona will demand a cost of living premium for their superior infrastructure, accessibility and work opportunities. Provinces where less is on offer, typically cost less to live in.

Hopefully, one thing the survey successfully achieved was to put a stake in the ground for people assessing the cost of living in Spain. Many people arriving in Spain are on a limited income and it’s far from easy to find employment in many areas of Spain. Knowing how much things cost in advance is an essential step in preparing for a new life in Spain.

When property in Murcia is mentioned, large urbanisations and new build golf developments located along the Mediterranean coastline spring to mind however, according to Kyero.com, these homes are not what the majority of today’s buyers are looking for.

The latest independent statistics from Kyero.com reveal that 8 out of 10 of the most popular towns in Murcia province are in fact not coastal at all, rather inland. These towns are currently experiencing a renaissance and property prices are booming.

One example is the town of Moratalla, 120km inland, where figures show that the average property price increased by 50% from €82,250 in 2006 to €124,000 in 2007. Other examples are the scenic town of Jumilla in the north of Murcia province, where a 25% increase, from €139,000 to €173,000, was recorded during the same period, and Puerto Lumbreras in the south west, where average property prices increased by 17%, rising from €233,250 to €245,250.

Set against the province average of a 4% increase in property prices from €204,250 (2006) to €211,250 (2007) and the national average actually declining by 0.1%, from €245,750 to €245,500, this is highly significant.

This data suggests that most Britons looking for a holiday home or to relocate to the Murcia region are increasingly seeking rural areas above developed coastal towns. Space is becoming a key consideration and properties are frequently being sought near to the national parks of the region. One example is Lorca which takes the third spot in the Kyero.com Top Ten and is situated near to the Parque Natural Sierra Espuna. This area also sees local property development company, Casas de Lorca, building villas on 5 acre plots of land, meeting the demands of those looking for a low-rise property option where space is key.

Casas de Lorca’s Director, Mike Hamilton, recognises the popularity of the Lorca area as offering something more to the discerning buyer: “Lorca offers so much for the British buyer. Not only is it under 20 minutes to the coast and within easy reach of 3 airports, property in Lorca also offers excellent value for money.

Another key reason that Brits buy in Lorca, or Murcia in general, is that they want to experience the true Spanish way of life. Lorca has around 100,000 inhabitants and is a fun and lively town with hundreds of bars, restaurants, castle, theatres, schools, squares to relax in, enjoy a coffee and watch the world go by, friendly people and beautiful architecture with 15 churches and a cathedral in the centre. When you set this alongside the fact that Lorca literally means City of the Sun, having one of the best climates in Europe, it is not hard to see why it is so popular.”