It’s important to note that certain countries have a wealth tax, which applies to the value of your real estate or capital assets. If the value exceeds the available exemptions and allowances, you may be required to pay annual taxes on them, according to Jason Porter of Blevins Franks.
For UK couples who only own a holiday home, the exemptions of €1.3m in France, €1.2m in Portugal, and €2m in Spain should mean that no wealth tax is payable. However, if the value exceeds these amounts, respective tax rates of 0.5%, 0.7%, and 0.2% will apply.
If you’re looking to rent out your home for holiday rentals, non-resident property owners in Spain will now have to pay a 24% tax on gross income from rentals, with no deductions allowed for expenses. EU residents, on the other hand, have a reduced income tax rate of 19% and the possibility of deducting expenses.
When it comes to renting out your property, doubling the houses means doubling the running costs. With the rising cost of living, holiday home owners are increasingly considering renting out their properties when they’re not using them to offset higher energy bills or mortgage costs.
If rentability is a key factor, you should consider the location, seasonality, and climate of your property. Golf and mountain homes tend to provide more weeks of rental than summer-only resorts, and locations with mild winters offer opportunities for renting to “snowbirds” who want to escape colder climates during the winter months.
Before buying a property to rent out, make sure to have your lawyer check if you can legally do so. Some properties in Spain may come with holiday let licenses, while others may not, and you might not be able to apply for a new one. Additionally, some buildings or complexes may prohibit Airbnb lets.
It’s important to research the types of properties that rent well. Historic city townhouses or apartment buildings are more popular if they have a lift and outdoor space.
To estimate how much you could earn from renting out your property, you can use AirDNA’s Rentalizer calculator by entering the property’s address. The calculator will provide a projection based on similar properties in the area.
While renting out your property can cover its expenses, it’s essential to keep an eye on the bottom line. Consider the community fees if you’re buying in a managed complex, and inquire about the annual fees before making a purchase.
Be cautious of anything offering a “guaranteed rental return,” as it is usually built into the purchase price.
Installing energy-efficient features, such as solar panels, can help reduce costs. Some new developments, like Ombria Resort on the Algarve and Elounda Hills in Crete, aim to reduce owners’ energy bills with geothermal systems and vacuum solar panels. Private swimming pools can be expensive to maintain, so some buyers opt not to have them.
Accessibility is increasingly important for rental properties. Buyers are often looking for areas within one hour of an airport or with multiple airport options. Drivability is also popular for those conscious of their carbon footprint or dog owners.
Before making a purchase, be sure to check visa and residency rules. Some areas may have restrictions on non-resident buyers. British citizens, for example, are subject to the 90-day rule in EU countries.
Future-proofing your property involves considering its long-term investment potential. Some overseas areas offer more liquidity than others, allowing you to sell to buyers from various nationalities. It’s also important to consider potential capital gain when choosing a location.
Beyond investment potential, future-proofing also means anticipating climate change. Buyers have been choosing northwest France or the Alps to avoid scorching summers in the southern areas.
For sale:
Bains-sur-Oust, Brittany
Six-bedroom house with an indoor pool in Ille-et-Vilaine, close to Redon. The property is made of stone and features light and airy living spaces as well as geothermal heating.
Denial of responsibility! VigourTimes is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
