November 8, 2005
Prices boost for SIPPs property in Spain
The Spanish Government plans to make it easier for UK pension property buyers to purchase for less and pave the way for increased investment in the Brits’ favorite sunbelt destination.
Officials and ministers are aware of the changes occurring in the UK in the succeeding year. Self-invested personal pensions (SIPPs) will encourage the British to use pension savings in investing in land and property abroad. The government is anxious to keep prices down and competitive with the less developed yet emerging markets.
A new law that could be introduced in the near future aims to boost investment in second homes. Spain has 300,000 families and investors who own properties, are registered voters and 700,000 people believed to own holiday homes.
The government has pinpointed speculation as a major factor behind the country’s rising property prices. Officials are claiming that people who buy land cheap but hold on to it – believing the value will grow as interest in building it intensifies – are actually holding the property market at artificially high levels.
However, the International Herald Tribune reports developers warn about the new measures will only serve to increase property prices in the region. This could spark a cooling of interest from foreign investors. As prices rise, fear that property investors may decide to shift to other countries, where prices are still relatively low.
Despite these concerns, the Spanish government argues that the rules are necessary to prevent investors from turning their backs on the Spanish property market due to artificially high prices.
Many expect the introduction of SIPPs will result in thousands of British people investing in second homes. Spanish authorities though are worried – the interest may wane if prices are high and if there shortages in housing. By introducing new policies, the government is hoping to encourage more building projects.
Posted on: Spain
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