Tax changes boost property opportunities

Even as Brits hunker down for a long spell of inflation and a winter of discontent, there’s good news and bad news on financials affecting properties in Spain.

Bad news for anyone making money from overseas property investment as the MacBrown Government is planning stealth raiding parties from November. A little known international treaty enables tax debts to be recovered in 19 OECD countries and you can bet the most hard-up tax men will be pushing out their boats first.

As most Brit investment has been made in Spain, that’s probably the easiest starting point for UK tax men, so investors should check their situations in both countries.

Good news from Spain is the Parliamentary approval to scrap the messy wealth tax is expected at the end of the year. This has been a pain for non resident property buyers and even tougher for Spanish residents who were hit on their world-wide assets. For current buyers, the further good news is that the abolition will be back-dated to January 2008.

The wealth tax was a burden that made Spain less attractive to capital rich retirees to Spain and with prices of top-end finca estates in Mallorca and Ibiza falling in line with the rest of the country, now could be the right moment to grab a bargain.

Recognised as ultra discreet by their show business and media clients, Google’s top ranked website for Spanish property, www.PropertyInSpain.Net are lining up an interesting portfolio for release in September. Their affiliates in Ibiza and Mallorca are in discussions with local wealthy owners on a series of off market disposals of large estates offering good returns on traditional olive production, hunting and other country sports, alongside the celebrity rentals potential.

With capital gains tax reduced to 18 percent and Spanish corporate taxes lower than the UK and other European countries, prospects are good for opportunistic buyers. The right tax advice can mitigate Spanish inheritance tax, opening the door to good medium term investment returns based on low acquisition and ownership costs and the promise of useful equity gains once the market recovery gets underway.

If you are planning a move to Spain talk to a financial adviser on investment and tax mitigation laws and procedures in both Spain and the UK.