Tourism law, Balearics case

By AdmSolJM16

The number of foreign tourists that visited the Balearic Islands in the first six months of the year exceeded 5.4 million, 8.5% more than in the same period of 2016, these are the latest data released by the National Institute of Statistics (INE). These data lead us to consider the current situation of the much-discussed Balearic Tourism Law.

The largest number of foreign tourists who traveled to the Balearics in the first six months of the year came from Germany, 36%, and the UK, 29.5%. The main emitting countries were the United Kingdom, with almost 8.6 million tourists and an increase of 9.1% compared to the first six months of 2016; Germany, with about 5.5 million, 9.6% more, and France, with more than 4.7 million, an increase of 4.9%. In addition to all this, it’s well known that relations between Spain and Russia enjoy very good health which means an increase of Russian tourists to our country. Every year over 1.5 million Russians come to spend holidays in Spain and most of them choose Mallorca.

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On July 18, the new Tourism Law was debated and voted on in the Balearic Parliament, which will take effect next week. In the same way, a decree law will be approved that will correct it to allow apartments leased to tourists, but this option will remain prohibited until the insular councils and Palma City Council determine in which areas and under what conditions it is authorized.

The Ministry of Tourism emphasizes the need to enforce the law, especially the large marketers, internet platforms and real estate, in clear reference to the legal uncertainty that until now allowed vacation rental housing in multi-family buildings sheltering in the state leasing regulations despite being prohibited by the Regional Tourism Law. Rental platforms that advertise homes for short leases without the mandatory authorization number and market unregistered flats or houses may be fined up to 400,000 euros.

As soon as the new law comes into force, a moratorium on new places will also be implemented until island councils and the Palma City Council decide which rental modalities are accepted in each zone.

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Balearic Islands, the spanish economic engine

By AdmSolJM16

Balearic Islands are one of the great economic engines of Spain thanks to the good behavior of the tourism sector. So much so they lead in 2017 and will lead in 2018 the growth of the Gross Domestic Product.

Never before, the Balearics had grown as much as now. According to recent banking data, the economy of the islands is advancing at a year-on-year rate of 4.4%, a growth so strong that there is no precedent in this century.

In this sense, the complex situation that is going through the Balearic real estate market is fundamentally due to several factors:

– The investment funds, which are buying buildings in different areas of Palma, mostly in the Old Town and, as is the current regulations, are dedicated to making hotels of tourism inland.

– On the other hand, there are the SOCIMI companies that are dedicated to buying real estate assets to subsequently offer a rents to their clients. They buy flats or lots of flats through the bad bank and then rent them.

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Foreign investment will continue to reinforce price increases in some high-value areas and will lead to “real estate oases” that will persist over time. Thus, the new fragmentation of the real estate market must be made aware, and there are significant differences within the big cities. However, the distortions generated by the dynamism of some areas, will end up causing many savers to re-consider real estate investment as an option.

The profitability of deposits is close to 0% when the Bank of Spain estimates the gross profitability of housing per rent at 4.29% and puts it at 9.54%, once its revaluation is accounted for. Potentially attractive figures, although conditioned by two important issues: the costly maintenance of a home and its lack of liquidity in stress moments.

Real estate investment is in the center of attention but, unlike the “boom” of the past, we will have to be very selective since the population trend will not accompany in the long term and the additional push of foreign investment will only be felt in specific areas.

Our team is committed to providing the best work processes to provide our customers with the best results, in a constant quest for professional excellence. We establish external collaboration when circumstances require and are firmly committed to transparency and honesty in our actions.

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Balearics at the forefront of real estate market

By AdmSolJM16

Balearic Islands is currently at the forefront of real estate market price leadership with a 7.2% increase between January and June, compared to the same period last year, according to data from the appraiser Tinsa.

The islands have benefited from the incipient recovery of national tourism but, above all, from the strong increase in the number of foreign visitors who, if maintained at the current pace, could reach 84.3 million visitors in the year, an 11,6% more than in 2016. This fact has encouraged the purchase of the rent, but also as a property of own use by many tourists.

We must emphasize that the evolution of housing prices in the Balearic Islands over the last decade has been much more favorable than the whole Spanish geography, because of its small volume of stock, which also would support the safety of properties in these areas as an investment.
It is a fact that foreign citizens are buying more houses than ever in the Balearic Islands. Last year reached a record high, with more than 53,000 sales, despite the decline of British buyers, French and German. The arrival of Swedish citizens has changed the landscape of buying and selling properties in Mallorca, climbing to the fourth position of home purchases by foreigners.

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To date, Balearic Islands, operate fifteen Swedish real estate. The Nordics offer a personal shopper service: they explain how they want the home and the professionals are looking for it in the real estate market available. 72% of contacts established with Swedish results in a purchase.

For foreign investment, we offer legal assistance regarding funds from other countries for investment in real estate and business. Our team has extensive international experience and cooperation agreements with international firms. We are also members of the Association of International Property Professionals (AIPP).

If you intend to purchase a property in Mallorca from a foreign country you should consider that both the jurisdiction and the processes to be carried out and the roles of professionals involved in it are different.

Throughout the whole process, the presence of a lawyer is essential to be responsible for providing obligatory advice to clients on legal, tax and legal liabilities acquired during the action of sale.

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