Posts tagged with Greece

New Law of entrepenurs and its internacionalization- Spain

10 October, 2013 No Comments

Spain… a country at your fingertips.

As previously did Portugal and Greece, Spain invites foreigners to invest in the country, providing a number of advantages.

real estate in Spain

photo: T.B.Channel

We will do an analysis of the measures that autorize the grant of a residence permit in Spain to foreign investors upon request.

Following the adoption of the new law on entrepeneurs, last September (law 14/2013 ) appears among others, measures to encourage foreign and domestic investment. The aim of the law is to facilitate international mobility, as well as the entrance and stay of foreigners in Spain for economic reasons, by making a significant capital investment.

Non resident foreigners, buying real estate in Spain, with an investment same or higher than € 500.000 each, may apply for a residence visa ( which allows them to live in Spain for a year ). This period of residence may be extended, upon application for a residence permission for two years more. Being this last period of two years renewable for two more years, subject to maintain the same conditions  that allowed grant authorization.

This investment will be verified by one or more certificates evidencing the domain, issued by Real Estate Register, belonging tho this property. Must prove that they have the ownership of the property by continued certified information domain  and loads of the real estate Register that belongs to the property. The certification will include a verification e-code for the enquire on line.

If at the time of visa application, the acquisition of the property was still in process of registration in Real Estate Register, will be enough to submit the certification, stating current seat submission of the acquisition documentation, acompanied by taxes payment certification.

The applicant shall prove in this way, his investment of 500.000€ or more in real estate, free of charges. In the event that the investment exceeds € 500.000, the portion of this exceed may be subject to taxes.

There are several limitations to the grant of a residence permission for real estate investment:

* The person who does the investment must not be ilegally in Spain, or had any criminal record  in the country, or any other countries where he head lived for the last five years.

*Must have public or private health insurance, as well as enough personal economic resources.

* the property acquired by investor must be free of charges. In case it has a mortgage, the investor loses it’s right to have the residence.

In addition to the information concerned to real estate market, the purpose of this new regulation also includes stimulating foreign investment in several areas, while promoting business entrepeneurship development in the country, scientific and technological innovation, seeking to create employment .


(3) Real estate from architectural plans: shopping around the world

2 September, 2011 No Comments

Risks and advantages of a fairly common way of purchase.

To purchase a property out of the arquitecture plans is common in countries like Spain, which have had a large market of new construction, as well as in other developing countries such as Greece, Crete, Panama, Brazil, Turkey, Egypt or Morocco .

Why do people choose this purchase method? On one hand involves savings, which in some cases can reach up to 30% of the final price once the property is completed. It also allows the new owner to make changes in materials, and the distribution both inside and outside, example: increase the size of a room, change a terrace, or increase the size of the pool (in contrast, in a finished house, it is more difficult and expensive).

However, the buyer of a property out of the architectural plans bears many risks. In the first place,  he has to make a deposit upon signature of commitment of the purchase contract, then the promoter requires him to make a number of advanced payments before they finish building the house… ie when the house structure is complete or when the roof is finished …. the process keeps repeating itself until the house is completed and the final payment made. This process may take 18 to 24 months or sometimes even more.

In some cases, investors buy the property off plans and sell it when it’s finished at a higher price. In other cases, they buy the property off plans and sell it before it’s finished, thus assuming only the deposit and early payments and avoiding the last ones. This strategy was very profitable when the market was favorable, with profits of nearly 20%.

In the current market, where sales are stuck, the risk is much higher and the appreciation of the capital invested is almost inexistent. Since it’s difficult to sell an unfinished property the buyer will have to make all remaining payments. Under these conditions, we must have the money to cover all the payments and bear in mind that in two years, mortgages are subject to change.

The property’s delivery date must be clearly stated in the contract (month and year), specifying whether the possibility of extension exists. To treat possible delays in the delivery of the property, parties may have previously agreed to a penalty clause that covers compensation for any costs (moving furniture, rent …) according to the days or months of delay.

All of these details should also be specified in the pre-arrangement that is signed at the time of the deposit, with the house details (square meters, location, quality specifications and equipment), and the price and interests agreed on.

Even if delivery is made under the agreed time, we must verify in which conditions was delivered . The home must be completed with the “end of construction” certificate signed by the architect who led the work, and the adequate licenses and permits:  first occupation (for private housing), and final certification (in public housing). If they are not in order, utilities companies will not accept it and you will not have water, electricity… to live in a house with no license could lead to a penalty from the public administration. If a delay does occur, a first request is sent to the developer to deliver it (ie. Bur fax with receipt requested). If after two months the property has not been delivered, another similar requirement prior to a lawsuit. After 6 months, then you can start to process a legal claim (it is recommended to keep all costs that this delay has caused to the buyer, to attach them with the claim).

Buying a property off plans has not been recommended for a couple of years now. During the housing bubble, if the developer was a good professional, the buyer got his home in a timely fashion and at the agreed price. But in many cases, complications arise and the buyer can lose the house and the amounts paid in advance. There are buyers who find themselves in this situation because at the time they agreed to sell this way. In my next post I will explain the process to be followed in our country when problems with the purchase of a property arise.

Property investor show & OPP Live, Excel London Oct 2010

31 August, 2011 No Comments

You make your money When you BUY, NOT When You SELL.

This is one of those phrases that professional real estate investors believe and follow …. and the places with more supply per square meter is at the fairs.

The Property Investor Show & OPP Live was held in London in late 2010. The most relevant facts during this real estate exhibition were:

1 – There was a live auction with more than 200 properties. Even if you previously hadn’t participated in real estate auction, I encourage you to go see one to learn its dynamics, the purchase before and after the auction, the closing of good business, or the rules to perform this type of purchase, etc..

2 – In the English market, and in the international (but in a smaller scale), there is the possibility to “buy fractional”, ie. to buy a part or portion of the entire property. It is a figure that has considerable popularity in a market like the one we have today.

The approach is aimed at the holiday home as an investment. Second home buyers seek homes that require them to give a small down payment, with low building expenses, and few financial risks … but that allows them to benefit 100% from their investment. It differs from multiowners, which means only a right to use the property x weeks per year. (I’ll make a post detailing this type of fractional purchase).

3 – Almost half of the exhibition was dedicated to the international market, with potential countries such as Spain and Portugal for the English market, as well as new destinations to invest, such as Cyprus, Greece, Africa, Egypt, Brazil, Swazi and Turkey (the ones that had great reception in the English market were mainly: Cyprus, Turkey and Egypt).

4 – In particular, Egypt was the guest country, with many product developers offering the best destinations in the Red Sea. Egypt is considered one of the leading emerging markets in the property sector because it is generating great interest from international markets to invest there.

Many of the reasons to invest in Egypt are: good sustained economic growth, cheap labor and land, and a booming real estate market. A great thing is that the RE market is interesting to both, domestic and foreign customers.

Among the advantages of buying in Egypt is the exemption of tax rates:

* The purchase and ownership of a property is exempt from taxes, both inheritance and capital gains.
* The administrative charges, if any, are very low in general.
* There is an estimated return on investment between 5 to 11% depending on the type of property.
* The areas of the Red Sea are the most popular for tourists and the demand for vacation homes is located in Hurghada, Sharm el Shiekh, and Gouda.

* Theoretically, when buying a home it is not necessary that it be registered in the deeds of the property, although the possibility exists if a buyer decides to register his property paying a fee for it.

5 – There were about 130 seminars of about 45 minute each, in addition to the exhibition, with the idea to reflect this continuous change because new markets are opening at the same time, and new creative ways to face sales and marketing are emerging ….. It is said that the money exists, but will exist only for companies that are prepared to give in exchange good business prospects ….. It is also interesting the idea that investments in “passive properties”, for example student apartments or hotel rooms, should be part of investors’ portfolios as investment alternatives.