According to Premier Marbella news sources, the property market in Spain appears to be moving again largely thanks to foreign investment. However, what is of most concern to international investors when buying property in Spain? The Spanish Association of Real Estate Consulting (ACI) explains what the key points to consider are for investors.
International investors tend to pay particular attention to the legislation that applies in each country when making investments of any kind. It is very important to have a developed & updated legal system. Another aspect to consider are the rules relating to urban planning and land management or General Urban Planning. Taxation is also very important and has a fundamental impact on the calculation of investment returns. Therefore, VAT, ITP, IAJD or Plus Valia, are taxes and charges that have a strong impact on investment in property in Spain. Taxation must be perfectly clear from a legal perspective with no signs of substantial short-term changes.
Leading Marbella property specialist Romano Keogh commented that, as with any type of investment, calculating the return on investment is the most important aspect to any investor buying property in Spain. These returns are determined by the profile of the investor and are directly related to the risk assumed when undertaking an investment. Thus, the risk / reward conditions all tend to follow the golden rule of “greater investment risk, higher returns.” Investors also focus on the returns of their investment, based on the flows of occupancy generated by an asset and the letting conditions of tenants occupying the asset.
The availability of credit from financial institutions increases investor appetite when buying property in Spain: operations in which part of the purchase price is financed as the profitability / return obtained is much higher due to the fact that the equity that the investor has to allocate is lower. A determining factor as to why in recent years the volume of real estate investment has fallen dramatically is the lack of available credit and its high price when obtained.