MOST FREQUENTLY ASKED QUESTIONS:

1 - How realistic is it to live and work inland?
2 - What taxes would I have to pay in Spain?
3 - How easy is it to rent out a property or am I best working with a Management Company?
4 - What types of property are best to rent out?
5 - What type of business is best to develop?
6 - How easy is it to settle in Spain permanently?
7 - With such increasing numbers of homeowners seeking rental bookings have you any idea as to how long it may take before the number of holiday homes finally reaches saturation level?
8 - Why do I need only ONE estate agent and how can I be certain that all suitable properties available will be offered to me?
9 - Do we need a solicitor to deal with the title deed transfer?
10 - What average capital appreciation can be expected from a Spanish property purchase?
11 - Will I owe any Spanish income taxes since I am generating rental income on my property?

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Q. How realistic is it to live and work inland?
A. The problem with living & working in the campo’s or the country is mainly the language problem. The inland area’s of the Costa del Sol are becoming more and more popular and much more accessible by good road infrastructure than they ever used to be. A good example of how a town has grown is Alhaurin el Grande once a small white pueblo village surrounded by fertile orange groves. The land surrounding the village was ‘Finca’ land (land for growing produce). Now Alhaurin is a bustling town attracting new investment with much new construction. New businesses are springing up catering for the new community, predominately British and Scandinavian. These pioneers took the gamble, property was cheap and land was plentiful and the one thing they had in common was they all spoke fluent Spanish. The language made the dream a reality. Prices here are now on a par with the coast!

Q. What taxes would I have to pay in Spain?
A. Just like any other country everyone has to pay tax. No matter which way you look at it, whether it is direct taxation or indirect taxation (VAT) Tax when you win (Capital Gains) or tax when you die, Inheritance tax. Tax on property when you purchase is in the form of IVA and is currently charged at 7%. The annual property tax (Catastral) is based on the deed value of the property. Income tax is payable on all income earned above €21,000. The income tax system is very similar to the UK, just the rates at which you pay are different. Less in some earnings bands and more in others. Tax on cigarettes and alcohol are minimal hence the fact that they are cheap in comparison to the UK.

Q. How easy is it to rent out a property or am I best working with a Management Company?
A. The answer to this question naturally depends on the amount of effort any owner is prepared to undertake. There are many good web sites and publications that specialize in property rentals for private homeowners and most people will have their own circuit of friends and business colleagues to target. Most people nowadays will know someone that is planning to visit Spain and therefore with a little effort private rental bookings are realistic to achieve. Most management companies are happy to work with owners that are finding private bookings themselves and many will not charge any penalty fee when this occurs. Any management company that insists on complete control of your home is probably one not worth working with.

Q. What types of property are best to rent out?
A.2 bedroom 2 bathroom, frontline beach properties are always in demand for renting however this tends to be for holiday letting and short term (2, 3, or 4 months at a time). For longer term rental potential and therefore guaranteed income all year you should choose something further back close to amenities and bus and rail so that it handy for commuting. Most people when they buy a property that is for renting out make the mistake of buying what they like instead of what is best for renting out. Long term renters tend to be people that have moved to Spain on a permanent basis with their family, their furniture and probably their pet(s). So 3 bedrooms plus and space for living are most important features, preferably un-furnished.

Q. What type of business is best to develop?
A. Don’t make the same mistake that countless thousands have made by opening a bar or restaurant without any previous knowledge of the industry. Many before you have tried and in the main it only ends in misery. Starting a business in any country can be fraught with problems. Do not rush into anything without first doing your homework. There is no replacement for sound research, a sustainable market for your product or service and a profitable route to market. One innovative business is shipping goods that are purchased as normal every day products in the UK but not normally available here in Spain. Products such as branded tinned produce, coffee, and general long life products. We have a Spainsbury’s and a Brit Essentials. There is probably room in most Brit Settlements for this kind of store.

Q. How easy is it to settle in Spain permanently?
A. It is very easy if you are willing to embrace a different way of life and culture, learn a new language and become part of the local community. The problem most Brits abroad face is the reluctance to change the way they have lived there life so far for something new and different.

Q. With such increasing numbers of homeowners seeking rental bookings have you any idea as to how long it may take before the number of holiday homes finally reaches saturation level?
A. If only we knew the answer to this question we would make a considerable amount of money by predicting the future! However facts can help us guess what might happen in years to come.
The number of tourists visiting the region from all over the world has been rising annually and the Costa del Sol remains the undisputed “California of Europe” and "Sunshine capital” The international airport in Malaga predicts phenomenal visitor growth over the coming years and appears to have the land capacity and potential plans for future expansion to cope. Judging by growth to date, their projected figures look very likely unless of course the unexpected occurs.
The major tourist attractions in the Costa del Sol are the beaches. The businesses that depend on tourism are pouring millions of Euros every year into improving facilities. The government is putting in place an ambitious infrastructure that is connecting most of the beautiful inland gems to the better known cities thus making travel in Spain a joy. This will ensure visitor demand is sustained or even increased and all of the facts seem to point to that many visitors DO return year after year.
Villas with pools are an effective cost alternative to traditional holiday accommodations, as they can provide "home comforts" at cheaper costs and more space than most of the major hotels.

Q. Why do I need only ONE estate agent and how can I be certain that all suitable properties available will be offered to me?
A. As long as the estate agent you choose to represent you is a licensed real estate agent and a member of the most reputable body of Estate Agents in Spain The IN (Interagency Network) and has access to the MLS (a computer database, a.k.a the multiple listing service)…almost every property for sale can be found and if you deal with more than one agent it can only serve to create duplicity and confusion and in addition neither agency will be able to act exclusively in your best interests. In addition it may possibly even cause a legal conflict to occur between the two estate agencies. Insist on working with a competently qualified and properly licensed agent that you are genuinely compatible with…he or she can supply you with ALL of the information you could possibly require. When you work with a member of the IN you are benefiting from the knowledge of 140 Estate Agents but without the hassle of having to contact and research every single one of them.

Q. Do we need a solicitor to deal with the title deed transfer?
A. This is entirely up to you in regards to whether or not you specifically feel the need to employ someone to oversee all of the formalities.

Q. What average capital appreciation can be expected from a Spanish property purchase?
A. No property purchase should ever be based on any expectation of capital appreciation, however it is realistic to expect some rise and therefore may be it is best to consider what has already occurred and the current forecasts. The Costa del Sol has experienced 24% year on year growth since 1999. Several forecasts predict for the next 10 years appreciation should continue at a similar rate to that of the past 10 years. On average capital appreciation has averaged around 17.4% per annum over the past 10 years and therefore although no one has the ability to accurately predict the future, it does seem a fair assumption. One thing is for certain and that is , that with the growth of the Economic Union in Europe the colder northern European countries with unstable weather conditions such as Britain will always gravitate to the warmer healthier climate of the Costa del Sol, with this in mind demand will away's be sustained.

Q. Will I owe any Spanish income taxes since I am generating rental income on my property?
A. You will be required to complete a Non-Resident Tax Return due to the Spanish sourced rental income you will be generating; however due to the fact that your property will be operating like a business, you can deduct all operating expenses from this income and in addition Spanish tax law is notorious for allowing a variety of tax deductions such as all mortgage interest, property taxes, structural depreciation, and even an annual inspection trip (plane tickets, car hire, etc.). Once your Spanish income tax obligation is calculated, you will most likely have “little to none ” Spanish tax obligation, since you will probably fall into a lower tax bracket anyway.