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Spain has announced plans to boost landlord rights in a reform of its rental property market.
The new measures, which are expected to be finalised in the coming weeks, will make it easier for landlords to evict tenants who have not paid rent. The government hopes this will boost buy-to-let investment across the country.
Indeed, there are a total of 25 million properties in Spain . Only 1.8 million of these are rental properties. This tiny percentage is partly because Spanish law has never actively encouraged investment in rental homes before; evicting tenants at present is a complex and unreliable procedure.
But under the new rules, tenants would have just 10 days to pay any outstanding fees or be evicted from the home, while landlords would also be allowed to give tenants two months' notice of eviction if the property is needed for themselves or family members.
Likewise, tenants are currently entitled to stay in a property for five years, plus another three if the landlord agrees. The revised law would cut that figure down to three years, with an additional 12 months subject to approval.
Investors in Spanish real estate would also be granted tax breaks of 60 per cent from rental income – increasing all the way to 100 per cent if the properties are rented by those under the age of 30.
"These are clearly steps to encourage investment, especially from abroad, in Spain's real estate market to help absorb some of the overhang of housing stock," commented Alexander Pelteshki , an analyst from ING Financial Markets.
Indeed, the plans have been welcomed by Spanish property professionals, who hope that the combination of improved rights and reduced taxes will stimulate the country's property and economy alike.
"We need these reforms like a desert needs rain," one agent told A Place in the Sun. "A dynamic and functioning rental market is essential for labour mobility and a healthy economy."
And buy-to-let investors can be sure of strong returns, with Spanish house prices continuing to fall as property rent rise.Where does that leave investors interested in Spanish real estate?
Bernhard Scudlik, Director of international estate agent 1a-Villas.co.uk, shared some exclusive tips with TheMoveChannel.com:
"An investor looking for a buy-to-let scheme should try to maximize the number of bedrooms in the property," advised Scudlik. "To find a property for sale with more than 10 bedrooms (with a legal license from the town hall to rent them out) in a favourite tourist area close to the sea can be difficult. Why should such a property owner sell his cash machine?"
He added that location is an important factor, with prices of property increasing as house hunters get closer to the coast, while buyers should be careful to choose their chosen spot correctly: "The B&B concept will not work in a villa area where the tourist noise will cause problems with the town hall."
Thinking of buying to let in Spain?
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