The Spanish property dream revisited!!

Sorry to go on about Brits buying residential properties in Spain. I get twitchy about what do the words "escritura" and "mancomunidad" mean. Then, there is sometimes the lack of land register and the lack of transparency over prices. However, a few years ago with the peseta at 240 to the pound you could sell up in Blighty buy a better property and still have cash over. I remember a few years ago visiting the Costa Brava and being knocked by the coast's beauty. Who would not want to live there?

I am assured that the lunacy on the Spanish roads has got better and the UK health system has gone backwards in comparison with Spain. The UK has funded quite a few of the Spanish infrastructure improvements via European Union transfers. Spain is still a net beneficiary of Community funds but this should change with the increased investment in Eastern Europe.

Spain is a magical place but people should be aware of the problems. The country was always going to struggle with the euro. Inflation is at 4.7 pct and the current account deficit is over 10 pct of GDP. It is likely that Spanish housing and banking sectors will have to take quite a bit of the adjustment. Una cerveza anyone?

Don't get sucked in buying distressed properties, because they will just get more distressed. New buyers should try and rent and then make a measured decision. The possible increase in Eurozone interest rates by the ECB will strengthen the euro but the Spanish and Italian governments are already screaming at the central bank.
www.searchaccountant.co.uk

Spanish property bust hits Brits looking for dolce vita.

I have been reading about the Spanish property bust hitting Brits looking for the
dolce vita (I know it is an Italian phrase). They have been hit by the pound falling against the euro, rising interest rates, illegal building practices and overbuilding.
The Brits have found their main market of selling to other Brits has fallen. The Costa developers have been running on high octane fuel during the last few years.
In the good times there has never been much of a second hand market in the coastal regions since it was quite easy to build new properties.
I saw a mate of mine who lives in Tenerife and he was telling me how cheap his water bills were. I said this situation was unsustainable. Higher water bills are needed to conserve water and I suppose the Sotogrande complex will be
rich enough to water its golf courses. However, I will doubt this will be true
for the rest of the south. I am surprised that the water shortage has not been priced in with the cost of houses and flats.
www.searchaccountant.co.uk
Unfortunately, a lot of people in Spain have been gorging themselves making money from unsuspecting Brits. They have been sold properties without proper planning permission. Then, you have regional governments such as Valencia changing the planning rules retrospectively by getting property owners to pay for infrastructure projects such as roads.
Quite a bit of residential property could be pulled down due to the Coastal Law (Ley de Costas), which is also going to affect quite a few
Spaniards.
www.searchco.co.uk

Spanish banking sytem going for a bust?

Yesterday, the Daily Telegraph published a thoughtful article on the Spanish banking system saying that the national market for mortgage-backed securities has shut down.
The major Spanish banks and savings banks are making major borrowings direct from the
European Central Bank (ECB). There is concern about the Spanish property market, which I think is way overpriced. The market for costa properties has stopped functioning and there is going to be a bit of a bust after so many boom years.
However, it is still a great place to live!

Stocks and shares

Dear Readers,
don't you hate the UK tax treatment of shares!! There is the stamp duty when you originally
buy, so no wonder people are spread betting and trading in contracts of difference to
avoid the tax. Then, if you are lucky enough to make a profit, you have to do pesky
calculations for taper relief. Or if your tax affairs are complex, you can get accountants
to do the calculations.
On the other hand the tax affairs of most people are simple but it just needs a bit of a
share portfolio, a second home or a buy-to-let property to make tax affairs complicated.
I suppose there could be a tax onslaught on second homes both in the UK and abroad.
Houses and flats are not very mobile and so are easy to tax. Stamp duty could rise to
continental levels. I suppose there could be conflicts between individual national
tax administrations trying to raise as much tax revenue as possible from
residential property. In Spain, different rates of capital gains tax are levied on property
sales depending on whether you are resident and non-resident and I am sure countries
will try and raise the tax take from foreigners (Brits).
If you do self-assessment, don't forget the July 31st deadline from HMRC if the 2005-06
tax return has not been sent in by January 31st. There will be a second automatic penalty
of £100.