Spain to encourage buy-to-let investors
As the Spanish housing market continues to struggle the government is trying a new tactic to encourage foreign investors to buy up properties with the aim of renting them out.
The government hopes that by changing existing tenant-biased rental laws in the next few months it will create a more optimistic climate for investors considering to buy-to-let.
The current rental laws are generally considered out-dated and heavily in favour of tenants, however the new legislation hopes to correct this and give more power to landlords.
The changes will include giving tenants just 10 days to pay their arrears before being evicted and will allow landlords to regain possession of their properties with just two month’s notice.
Furthermore, while tenants currently have the right to legally live in a property for five years with an additional three years if the landlord wants to extend the contract, this will be reduced to a three year right to reside and one year extension.
Key for expats, the proposed changes also include a significant tax relief for foreign landlords, ranging from 60% to 100%, if the properties are rented to working professionals under thirty years of age.
There will also be more flexibility with regards to rent increases, which are currently tied to inflation.
These improvements could offer Britons living in Spain a good opportunity to take advantage of low property prices and buy for an investment.
Already this year has seen a 12% increase in Spanish overseas property acquisitions, compared with last year.
This has been prompted by the potential to snap up a bargain thanks to plunging house prices which have dropped by as much as 40% during the past few years.
Adam Neale | November, 2012