Brit buyers miss out on Spanish bargains

British buyers are losing out on the amazing property bargains in Spain as the Dutch show more courage, the Belgians more muscle and even the French recognise a good deal when they see one.

These Euro-zone countries do not have the adverse currency problems of would-be Brit buyers, who now have to recognise that the once mighty Pound is worth just one Euro and is unlikely to do better than this for some years. The McBroon fiscal foul-ups have allowed sterling to decline by 30%, removing the long-held extra buying power when it comes to getting a home in sunny Spain.

But there is still a chance for Brit Over-50s, fed-up with the general decline of the UK, to realise their dream of a full-time or part-time life in Spain. In many cases the current asking prices are showing discounts that more than compensate for the currency exchange losses and with prices bottoming out right now, there is a good chance of an equity gain in future years.

The Spanish property market is bouncing back as the banks sell off their liquidation stock of key ready homes taken from cash-strapped developers in exchange for unpaid bank loans. Spanish families are getting an increasing share because they are on the spot when the best deals come up – like La Caixa bank selling 120 apartments over a weekend and Santander selling 24 properties in a single day.

But the Dutch, Belgians and French have organised themselves and are finishing up with far more bargains than the Brits who seem shell-shocked by the McBroon machinations and its effect on their life plans. They browse the Spanish bank repossessions on specialist websites like PropertyInSpain.Net, make excited inquiries but then, seemingly, decide to wait a bit longer in case the prices drop further.

A bargain costing EUR 100,000 (discounted typically by 30%) needs a cash commitment of EUR 30,000 to cover deposit and buying costs while low interest mortgage payments can be offset by summer rentals if necessary. If the market returns in 3-5 years the recovered equity of 30% equates to the initial buying costs.

That’s the way the other European buyers are seeing the deals and they are enjoying the benefits right now as prices are bottoming out. That might be the signal that gets the Brits off their butts and into the buying fray?

Spanish property with no capital gains tax...

The McBroon Muppet Speaker, spent longer attacking the Daily Telegraph for revealing the House of Horrors expenses slapped in by MPs, than he did detailing plans to clean-out the stables. The supposedly “independent” blustering Michael Martin did find time to slag off two of the more honest MPs who tried in vain to influence his plans.

Over 50s, used to more gentlemanly times in the so-called Mother of Parliaments, might recall occasional scandals involving individual Members, but never, seemingly, anything involving so many snouts – including the high falutin’ Martin himself - in the trough. Avoiding capital gains, on second homes, as achieved by many MPs, is now available to property in Spain

The McBroons and Speaker Martin had planned to slip out censured details of MP’s expenses in the middle of the summer when families would be on their hard-earn holidays in Spain or focused on buying a place in the sun away from mired Britain.

But the Telegraph thought UK residents should know how they have been taken for a ride by their elected ones before the crucial local elections next month, so they could X-out any hopes the McBroons might have of saving their last handful of local councils or getting any more of their ilk onto the EU gravy train.

Only hours earlier the first “Sorries” were uttered by the party leaders, who again blamed the system, but neither suggested that the tax-payers should get their money back where dodgy deals were involved.

Meanwhile, more over-50s and pensioners, were deciding to explore the prospects for a bargain property purchase in Spain with an option for avoiding payment of any capital gains tax emulating the flipping MPs.

Yes, Brit buyers can legally avoid capital gain tax and inheritance tax on property in Spain if they buy through Libertad (Freedom) sponsored by the leading property specialists in Spain and Spanish banking partners.

Another tax chore for Spanish property owners

There's an extra chore for over-taxed Brits owning homes in Spain if they want to avoid a run-in with the Spanish tax man. 

British and other non Spanish owners need to prove their non-resident status by producing a new identification document for tax purposes. Failure to produce the document, the "Residencia" or "hacienda" as country Spanish still call it, could lead to mortgage and other payments being stopped.

Britons who use their Spanish bank account to pay the mortgage for their home in Spain have been required by Spanish banks to produce a Residencia certificate since March 2007. CAM Bank has certainly been sending them out, even to Brit customers without a mortgage, but some banks gave homeowners short notice or did not contact them at all.

The Residencia certificate is part of an EU initiative to clamp down on tax evaders. Spanish residents are taxed at source but non-residents can avoid paying tax there only by proving non-resident status. Anyone who does not provide the paperwork risks having their bank account frozen and mortgage payments stopped.

Non-resident status means spending fewer than 180 days per year in Spain and be able to produce the certificate after registerinjg in person at their local Spanish police station or Oficina de Extranjeros and then have the document stamped by a town hall official. If you go specially, try adding the costs of "EU compliance" to your UK expenses and/or your costs of ownership in Spain.

For an EU initiative, some might find it strange that it's not applied in reverse and that other country's are not also using the usual "money laundering, tax evading" excuse for keeping tabs on folks. Free passage throughout Europe, but there are barriers going up for any spare cash its citizens might manage to hang onto - wherever they happen to be living at the time?    

Anyone needing further information can contact the Spanish Ministry of the Interior's immigration directorate helpline on 0034 913 639 071. The document costs between €10 and €13, although going through a lawyer could be more expensive...