Majorca Property News

Property in Spain: rent rather than sell

Because of the stagnant market, find a lot of German who want to separate themselves from their holiday flat in Spain, no buyers. But there is a viable alternative: the base for a holiday let.
Property prices in Spain fall further. According to the National Bureau of Statistics (INE), they fell in the third quarter of 2008 compared to the previous year by three percent. Not so the rent: Because more and more Spaniards out of financial necessity to sell out their home burdened with debt and looking for a property for rent, rental prices tend upwards. According to INE, which were up in November 2008 by more than four percent over the same period last year.
The supply of properties for rent in Spain, despite a subsidy plan, the government still low, which also favors the increase in prices. This is especially true for the cities of Barcelona and Madrid, where a one-bedroom apartment is not rent under 500 euros. In parts of the coast and on the Spanish islands, the demand for rent last summer has increased by 15 percent. According to the apartment rental portal Arrenta the average rent for apartments is currently at $ 1000 a week. The most expensive are the Balearic Islands, Costa Blanca, Costa Brava and Lanzarote. "Here, of course, also plays a role that more and more tourists prefer a rental apartment a relatively expensive hotel and take care of themselves," said Manuel Romera by the Spanish Instituto de Empresa Business School.
For many German, currently not able to sell their Spanish holiday home, because of the stagnant market, offers a viable alternative to this is so. In 2009, the industry experts expect a further rise in rents. However, German owners should not make the mistake of trying a landscape that revenue at the Treasury. Under the double taxation treaty between the two countries the tax rental income must be reported. This fall in Germany, only rarely in taxes. In Spain, will be charged against the gross rent with 25 percent. Anyone who rents an organization must demonstrate that they should deduct the appropriate part of the rent and pays to the government. "In Germany, only the Mietgewinn after deducting all costs will be taxed. Since you can deduct expenses such as advertising costs, included under the tax treaty, the Spanish tax portion remains in the German declaration usually not much left that would have to be taxed, "said Werner Steuber by the Germans and the Swiss community protection for foreign real estate. Nevertheless, there is reporting, and the controls were more stringent, Steuber.
The Spanish government and the 17 autonomous regions to support the development of a viable rental market. The regional governments try to facilitate the process of letting on. Andalusia alone plans in the coming year to provide 14 million euros in state aid for the tenant and landlord. Homeowners should be given government guarantees, if they rent. "Spain has presently still a tenancy that the eviction action makes it difficult to defaulting payment of monthly or damage to property," explains the German lawyer Karl Lincke based in Madrid. In Andalusia, as well as in some other regions now the state is liable in certain instances, when it comes to loss of rent. In addition, needy young people receive a monthly allowance so that they can afford a house. To provide prospective buyers still have an incentive to bring government and autonomous regions at the same time more publicly financed condominiums on the market.