Crackdown on illegal holiday lettings

[Cameron]

I'll be surprised if they back down on this one. The old Latins don't like to lose face and might be prepared to soldier on regardless of the consequencies. I feel the bigger problem will emerge with the breakdown of the euro and our subsequent exit. Then they'll be out to get us all, renters or no renters. Remember you read it here.

Could it be those that took a delight in seeing renters get their cum-uppance will also find themselves on the receiving end of new draconian laws especially set up for the benefit of the expat and retired gringos ?. I'd say its more than a possibility.

[appy ammer]

we;re not in the euro cameron

[Cameron]

We're not in the eurozone currency wise but we're bound by the rules of the european parliament which at the moment should protect each country involved . Hope that explains what i was trying to say.

[woe10]

quote:Originally posted by emmi

Excellent posts by Gordond and SurfJames.  This is the kind of information which needs to be drilled into the brains of the Spanish Authorities regarding this issue.  They just don't seem to be able to learn from the mistakes of other nations.
Now, how can you get this info to the meeting taking place soon?

What brains !!!!  This is Fuerteventura...[8D][8D][8D]

[appy ammer]

yes cameron it does, and the thought of the euro crashing is not worth thinking about, it would be armagedon for the uk economy, there is a chance that countrys like greece and spain may leave the euro, some dealing desks have already updated their platforms to include the dracma and some other currencys,the dreaded Plan B is gathering momentum

[Cameron]

As i've said before aa i'm not so sure it will be all doom and gloom for the Uk if the euro goes west. Theres some top think tanks that take the view we may even thrive. Won't know either way though until it actually happens. Big concern for me is us not having the proection of the Euro courts when owning and living abroard.

[appy ammer]

is it any different to owning in the usa?

[Cameron]

Possibly not. Difference is we are all aware of how the Spanish can behave towards foreign home owners. We've all seen newsreels of them ripping down properties of foriegn homeowners with no compensation in valencia. Nearer to home most of us have heard of origo Mare.You don't hear too much of that going on in the states, well i haven't.

[appy ammer]

quote:Originally posted by gusangus

property sales are on the increase maybe people are using this opportunity to get a holiday home for personal use cheaply
http://www.tumbit.com/news/articles/4486-sales-of-spanish-property-to-foreigners-experiences-growth.html

not according to this site gus

http://www.globalpropertyguide.com/Europe/Spain/Price-History

look at the exposure the banks have got, there in the prevebial

[appy ammer]

http://www.spanishpropertyinsight.com/buff/2011/12/28/bank-repos-worth-43pc-less-than-original-valuations/

[SurfJames]

I cannot see the Euro being allowed to fail. It's too big and the bureaucrats will do everything to keep it afloat.

But it does need to be devalued against other currencies - £1.00 = E1.75 is about right.

They need to get printing Euros...that would create a more realistic exchange rate, and recapitalise the banks at the same time.

My understanding is that we can expect the pound to strengthen against the Euro next year, when investors see the pound as a more stable currency. [][][8D]

[appy ammer]

thats no good for the uk manufacturers james;(

[woe10]

Great for my UK pension being sent over here;)

[appy ammer]

didnt think you woz old enuff woe;)

[Gordond]

Thanks for the positive remark Surfjames.

To a point I disagree with you directing annoyance at bankers. It is beyond debate that they caused the current recession but the one that started with Bear Stearns, Lehman Brothers, Northern Rock and Bradford & Bingley was not entirely predictable, even to the people in the know.

This one is 100% predictable and avoidable.

My view on this upcoming problem is that not being able to obtain a licence to rent out a property and the subsequent enforcing of this idotic law is 100%, absolutely, entirely manufactured by politicians. Politicians passed the laws in the first place. The authorities  are enforcing a moratorium on licence issuing and the Ayuntamientos are issuing the fines and prosecuting people. I don't see this as anything to do with bankers, a perceived disliking of foreigners, issues with the Euro or anything else. Annoyance needs to be directed at any local or national politician who supports the ban and are pushing it's enforcement. These particular politicians are single-handedly driving Spain and the Canary Islands economies to ruin because they are preventing hundreds of thousands of people from raising the funds to pay their mortgages through lawful and reasonable means.

We need banks whether we like it or not and banks WILL fail if mortgages are not paid because people can't find the money to pay them, it's as simple as that. To a bank, one repossession is irrelevant. Re-possession on the scale which is predicted will make the banks involved unable to function because no other bank  will lend to them due to the size of their liabilities on their balance sheets. If one fails, attention moves to other banks and their balance sheets. If they too have been re-possessing hundreds of properties then confidence in banks throughout the whole of Spain vanishes and others fail. This is what has been happening all over the world for the past 4 years. On 7th October 2008 RBS, the biggest bank in the world was 2 hours from total collapse meaning cash machines closing, cheques not being cleared, the lot.

In my opinion the same will happen with re-possession. Of course they can pursue you to your front door, but if they have hundreds or thousands of repossessions to deal with what exactly can they do? The very markets who they borrow money from on a daily basis don't take IOU's for settling their debts. They aren't going to say "cheers Senor banker, of course I'll wait for your 2734 legal actions to work their way through the courts, be appealed through the speedy Spanish Judicial system, and then of course I'll wait for the house (which isn't worth anywhere near the value of the loan outstanding) to be sold to someone who can't pay for their mortgage because they can't legally use it to rent to holidaymakers." What do you think?

It'll be squeaky bum time until they see sense (which I personally think they will), with a lot of completely pointless, avoidable heartache along the way with tens, if not hundreds of thousands of people thinking they are going to lose all the savings they have put in to their property, or getting a criminal record with a six-figure fine and the authorities both here and abroad pursuing them for their salaries or homes to settle mortgage arrears or massive fines.

I re-iterate my point about inviting as high ranking bank officials to this meeting in Tenerife on the 15th of January and sitting them front and centre in the front row of the room in the full knowledge that any politicians supporting the enforcement of this law and fielding the questions are PERSONALLY going to close their bank and put them and all their employees out of work. As well as all the builders, taxi drivers, restauranteurs, shop owners, plumbers, community administrators, bar owners, estate agents, car hire company employees, asesorias, lawyers, boat tour owners, cleaners, notaries, water park employees, bus drivers and anyone else who will be hit by people not being to be able to come to the island except in an AI hotel.

Remember, this is all completely and easily avoidable.

[Cameron]

I always thought it was pandering to the large hotelliers and holiday companies that brought this on. Nothing to do with the banks..... yet.You don't have to have a mortgage to be deprived of a license and its rental income.Not everyone is going to be repossessed, but they may still have to sell because they cannot afford to run it without the money it brings in. Same thing but no bank involved.

[fuefairy]

The Canaries is a holiday destination...thus the tourists were  originally catered  for in hotels and apartments. Then along came the influx of foreign property owners...buying on both residential urbanisations and old touristica licensed complexes. Basically  The Government is missing out on money, so they will enforce laws to gain income.


Also lets not forget some tourists are missing out on the safeguards of touristica licensed premises.

Though we dont like the law, it is Spains law and we should respect it, the only chance of change is by the ballot box and lobbying the new government.

I  have a property in the USA that its not in an area zoned for tourists, so no letting  and nobody argues with Uncle Sam.

[Cameron]

'Also lets not forget some tourists are missing out on the safegaurds of touristica licensed premises'

Then they should put the proper regulations in place and enforce them.Not just say no licenses are being issued to anyone regardless.

[potash]

quote:Originally posted by fuefairy

The Canaries is a holiday destination...thus the tourists were  originally catered  for in hotels and apartments. Then along came the influx of foreign property owners...buying on both residential urbanisations and old touristica licensed complexes. Basically  The Government is missing out on money, so they will enforce laws to gain income.


Also lets not forget some tourists are missing out on the safeguards of touristica licensed premises.

Though we dont like the law, it is Spains law and we should respect it, the only chance of change is by the ballot box and lobbying the new government.

I  have a property in the USA that its not in an area zoned for tourists, so no letting  and nobody argues with Uncle Sam.

Yes you were aware of the law when bought in usa not sold a property that had excellent rental potential and i bet every one in the selling chain were aware of this law in the canary's.Yep the government were not going to lose there tax on sales were they.i have a property on the island and do not rent out but i see trouble ahead for all who purchased hear the laws will keep changing to extract a few euro more from us till we give up and call it a day.

[appy ammer]

ignorance is not a defence as anyone who has had dealings with HMRC will know;)

[Cameron]

Yes. Where were they when the estate agents were giving it large selling properties with false figures of potential rental income. I'll tell you where, sitting on their arses counting the dosh, not rocking the boat and more than happy to rake in any VAT and other purchasing taxes.The estate agents had a free hand to misinform and half of them probably didn't know the law or couldn't care less anyway.Once its sold its sold move on to the next sucker. Dead right Potash i wouldn't trust a Spanish local government official any further than i could throw them. The Spanish are not in the same league as the US and are still inundated with corruption and incompetance.

[Charlie dont surf]

And you can't help but notice how many Estate Agents are still advertising properties as investments 'with excellent letting potential'

In this months edition of the Fuerteventura Gazette on page 7 there is a property update article that suggests the property market in Fuerte is picking and the plethora of 'bargain' properties are attracting the attention of investors.

I quote from the article 'this is apparently due to the possible resale value once the markets recover for the long term investor, but mainly due to savvy people turning to the holiday rental market as an alternative income'

Is it no wonder people are confused and mislead by articles such as this? It seems that Estate agents and Editors of publications here are quite happy to mislead the public and pull the wool over their eyes for their own gain!

[Cameron]

If its still going on then it wouldn't do them any harm sending a few of their 'investigators' on the road to prevent any mis-selling.

[ZappaRocks]

Gordond wrote "It is beyond debate that they caused the current recession but the one that started with Bear Stearns, Lehman Brothers, Northern Rock and Bradford & Bingley was not entirely predictable, even to the people in the know."

Only if you believe a corporate owned media with economists bought by and from the banking sector. If you sell people homes who don't have jobs then it's entirely predictable they won't pay their mortgages. They knew this from the start but because they lobbied behind the scenes to remove the protections and constrictions which only existed because they had done much the same in the past then again it's entirely predictable the same thing would happen.

People bought these homes with the promise of low interest rates, the banks bundled them together then passed them off along with good investments as another good investment, they washed the problem off their hands and made a fortune in the process. They knew they were creating a bubble and like the dot com crisis they knew it wasn't based on real value, such as goods or services. They know all bubbles like that burst and as always they pull out first and exacerbate the fall. They make on the way up and eventually make on the way down while all the time in real terms wealth is yet again passed from the poor to the rich.

Goldman Sachs knew this was going to happen and changed their status from an investment bank to a high street bank before it did to ensure that they then qualified for tarp payments. With jaw dropping arrogance they then bet on the market that they would lose money because of it, they don't bet major amounts of money unless they were sure of the outcome. IIRC they made 2 billion in the process got caught and paid a fine of 5 million, with I think one guy going to jail. That's quite a scam, later the public found out about emails from the legal department warning their staff to tie up their lose ends before investigators came knocking.

Rather than the top guys getting locked up, letting the company fall and buy it up for buttons as Iceland did. Whereas we are talking of problems for a decade or more Iceland is already on the up. Instead they bailed them out with public money to carry on as before, which they are. Now they are playing with the economies and our currencies and since nothing has changed it will happen again. Except for the last time we had a strong economy to cushion the fall, not so next time.

As for the rest there is only one sector that isn't hurt by these laws and that's the AI chains, you only have to look at who benefits. Question is why would politicians back laws which hurt their own constituents and for that I would follow the money and find out in which way they benefit.

[trebol66]

Good post.

What happened with the banks was predictable, and predicted, but those saying it would end in tears were shouted down as naysayers.

When the bad debt was bundled with the good debt into a product it was sold to other institutions whose purchasers did not understand what they were buying. Unfortunately the sort of person that works in this field cannot stand up in front of their peers and say "Hang on. I don't get this."

The law is the law and was the law when people bought.

The idea of buying a place and renting it out to pay for it stems from a money for nothing attitude that is bound to bring problems from time to time.

It was a gamble and one made without having done sufficient research.

Buying a holiday home and relying on someone else to apy for it always carried a risk.

Nobody ever moans when a gamble pays off, but when it doesn't...

[Cameron]

Dodgy post

Can't say i agree with buying a place and renting to pay for it is a money for nothing attitude. A lot of hard work goes in to getting your own place in the sun and a lot of money has to be spent to keep it up to scratch if you need to rent it. Yes its a gamble but tell me something in life thats not.The trouble with the law in Spain is that its not entirely black and white with too many grey areas that even the local solicitors use to their advantage. Go to one solicitor and he will tell you one thing, go to another about the same subject and he will tell you something entirely different.

No one is moaning about having to have a license. In fact theres plenty would be glad to get one and pay for the privilidge. What they do seem to be moaning about is the rediculously high penalties dished out which can only be designed to bankrupt those that financially have no choice but to carry on renting. Proper regulation of how estate agents promote sales might also be something to stick on their New Years resolutions list.

[ZappaRocks]

Cameron wrote "Dodgy post"

Whose? His or mine?

Actually I agree with you both to a point but on the big banks he's correct.
Renting a home out for holiday rentals is very much a business and usually requires an agent who often picks them up from the airport and drops them off. Cleaners, laundry service and a phone call away for various services such as plumbers, electricians, tv, etc all of course paid for by the owner.

Long term rentals is different and so reflected in the price of rent, the house is usually looked after and is secure while someone's there. It's not so much a case of monthly profit but paying off much of the mortgage, the owner already pays rates, taxes and community charges so they shouldn't pay for a license as they contributing to the local economy as well.

But both are a risk and subject to changes and an investment is always subject to risk unless you have the power over politicians to bail you out when things go tits up, that's a privilege the majority of the population don't have. It also tells you how much of a democracy we live in since a right to a decent living standard with a say if powerful people affect it is the gauge of how real it is.

[Cameron]

Cameron meant the post other than yours zap.

Couldn't agree more with what you say about licenses. Happy New Year.

[ZappaRocks]

"Couldn't agree more with what you say about licenses. Happy New Year."

By gott!

Happy New Year!

[gusangus]

now the Brit government is chasing the same people
  http://www.telegraph.co.uk/news/politics/8861510/Taxman-pursues-Britons-hiding-holiday-rent-on-overseas-homes.html