Buy-to-let investors snap up distressed spanish property

Real estate in Spain has seen prices plummet in the years since the financial crash, making holiday homes more affordable for lifestyle buyers – and more profitable for investors. Foreclosed homes, though, provide an even bigger margin, with values up to 71.6 per cent below their original market value, according to Fitch Ratings.

Being a landlord in Spain is also more attractive than it used to be thanks to new laws allowing rental rates to operate independently of inflation and increased by the property owner more often. The length of time that must elapse before a non-paying tenant can be evicted has also been reduced.

“Foreign owners renting out their property to working people under 30 years of age can even, under the new law, claim tax relief ranging from 60 per cent to 100 per cent on the rental income,” notes Global Property Guide.

Individual buyers, meanwhile, have seen their tax breaks removed, making homeownership less affordable. Much like in the UK, the unfavourable conditions have pushed many hopeful home buyers into the rented sector instead.

With Spain’s economy officially out of recession in the third quarter of 2013, enjoying a growth of 0.1 per cent, and tenant demand set to increase, the country’s property may be distressed, but the buy-to-let market is far from it.