Spanish rental yields continue to rise, climbing for the fifth consecutive year to reach a new record high.
Long a favourite for British overseas property investors, purchasing property in Spain for buy to let purposes is making more and more sense, as 2019 saw Spanish rental yields rise by 5.1 per cent over the year.
Average annual rental yields now equate to 5 per cent of property value, with landlords able to rent out for nine months a year as a holiday rental.
In addition, landlord tax breaks of up to 70 per cent can be claimed on (rental) income tax. This lenient tax relief also extends to non-resident landlords and owners of Spanish property.
The income can also be used to offset overheads and maintenance expenses, including mortgage repayments.
Besides Spanish rental yields climbing, you also need to factor in the capital appreciation of the property (the increase in value of real estate over time).
Properties in Spain have seen their value increase over the previous five years at an average rate of 5 per cent per year, according to Moody’s.
When you combine both soaring Spanish rental yields and capital appreciation, you reach the conclusion that Spanish real estate is giving a safe two-digit return.
In plain English, that’s over a 10 per cent yield every year safely, ideal for retirees who are afraid of sharp stock market fluctuations and seek a safe investment in bricks for their pension pot.
Spanish lawyers such as Larraín Nesbitt can help overseas property investors with property purchase and dealing with their non-resident taxation, to ensure that all tax breaks available are taken advantage of.
It seems that with Spanish rental yields soaring and property values also rising, there has never been a better time to invest in Spanish property, despite any Brexit fears.