Real Estate

Booming Ukraine Property in Kiev & Carpathian Mountains

2007-12-29T21:06:00.004-08:00

With property values soaring in the Ukrainian capital city of Kiev, many potential buyers are being forced to rent. This has provided a good opportunity for investors in rental properties, and has also helped to expand the traditional Kiev market further out from the city centre. Ukrainian Carpathian Mountains now feature Ukraine’s first off plan Ski resort all signs of a booming Ukraine real estate market

Ukrainian website Kiev Weekly has noted in several articles recently the trend of rising prices and what it has done to property investors in the capital city. With prices rising in the city so much, many people are now looking to rent instead of buying. Another factor contributing to the large number of renters is the high interest rate on local mortgages in the Ukraine. Rates in Kiev have been averaging 12-15% in recent months, significantly higher than many other European cities. Certainly one reason for the high rate is the skyrocketing value of property in Kiev.

One local real estate executive, Mykhailo Zhogolev, who is the Director of the Kiev Office of the Real Estate Experts Association of Ukraine, believes that renting is a cheaper option for the average citizen given the high prices and interest rates, noted the Kiev Weekly.

While the high prices and interest rates are forcing many to rent instead of purchase, this is providing a good opportunity for investors who are focused on rental income. International property investors, seeing the increasing value in the market as well as the need for renters, have scooped up many homes and apartments and are making a good return on their investment.

Ukraine's first off-plan ski mountain resort complex is considered as one of the best investment and holiday home opportunities available in the Ukrainian ski areas.
Learn more here Investment Property Ukraine

The London-based magazine The Business highlighted the fast-growing real estate market in Ukraine. The country’s economy is on the rise and the prices for property in Kiev are still rising about 2% per month, according to some statistics.

Another result of the boom in Kiev is the increasing popularity of towns outside the city, such as Khreshchatyk or Borispil, where Kiev’s major airport is located. Many of these towns and villages are experiencing their own building boom, with quite a bit of off-plan development under way. Either in the city of Kiev or the surrounding locations, there are plenty of opportunities for investors who want to take advantage of the local market.

The major locations for international real estate investors are in Kiev, Odessa, Lviv and along the Black Sea coast in the Crimea. Other popular places are the growing ski resorts in the Carpathian Mountains, including Slavsk.

source: homesgofast.com

Football Players & Managers Moving Home Again

2007-12-29T21:06:00.003-08:00

One of the less-celebrated effects of football transfers is the need for the player to find new housing. Even if a player is moving across town, it still can often be uncomfortable or impracticable for the player to live in his old home. Despite boss Jose Mourinho’s insistence that Michael Ballack will not have to move home, rumors are rampant that he will have to get packing. Ballacks recent exclusion from the team’s European side, may have him wondering if he will be house hunting come the January transfer window.

David Beckham and his family have recently undergone this process in a big way as they moved to Los Angeles. While they moved about as far away as possible, going from Madrid to LA, most other players don’t have to go quite so far.
See Posh and Becks Typical British Overseas Buyers

Some high-profile in-country moves over the summer include James Beattie going from Everton to Sheffield United, Darren Carter from West Brom to Preston, Chris Brunt moving from Sheffield Wednesday to West Brom, Danny Higginbotham to Sunderland from Stoke and Yakubu’s high-priced move from Middlesbrough to Everton. These are but a few of the hundreds of moves that took place over the summer, and for many of these players they will be looking for new places to call home.

While some of the clubs have personnel and services to help new transfers get situated, most of the footballers are just like any other home buyer as they look for housing that will suit them. Some of the players who aren’t nearly as lucky are those who go on loan, as they aren’t certain where they will eventually end up.

Foreign transfers probably have it toughest, as they often have to learn a new language in addition to settling in with the new team. Zheng Zhi might have it the hardest, coming all the way from China in his move to Charlton. Craig Gordon is moving from the north to the south, going from Hearts to Sunderland. Jose Enrique, the ex-Villareal left back, is joining former La Liga player Michael Owen in Liverpool. Another Spaniard, Javier Garrido from Real Sociedad, is coming north to play at Manchester City. He joins former England manager Sven-Goren Erickson as he sets to remake the club. The manager’s recent move northward makes him, just like the players, another home finder.

It will be interesting to see which Football Manager this season will be calling in the removal men.
Martin Jol faces an increasingly uncertain future at Tottenham after Arsenal inflicted a hugely damaging 3-1 defeat on their north London rivals on Saturday.

source: homesgofast.com

A New Study on Global Taxes on Rental Income

2007-12-29T21:06:00.001-08:00

A Globalpropertyguide.com study shows that Buy-to-let income tax rates are high in some foreign countries, but in others, rental income is completely tax free. Switzerland imposes the highest taxes on rental income of non-resident landlords, according to a study on the tax situation in more than 90 countries around the world. The study has been conducted by Global Property Guide with contributions from leading accounting firms in each country. http://www.globalpropertyguide.com/articleread.php?article_id=96&cid=

The effective income tax rate in Geneva, Switzerland can be as high as 48.6% on a rental income of €1,500/month and 54.5% on income of €12,000/month.
Other OECD member countries that impose high effective tax rates, above 20%, include the US, Norway, Spain and Finland.

In Norway, the flat 28% rental income tax is combined with a progressive capital tax. Although deductions for operating costs and income-generating expenses are allowed, effective tax rates are still high, ranging from 27% to 31%.

Spain charges 24% withholding tax on the gross rental income of non-resident foreigners, no deductions are allowed. Finland, on the other hand, charges a flat 28% tax but all direct income-generating expenses are deductible. This leads to an effective rate of around 24% in Finland.

The importance of deductions is also highlighted in the case of France. The nominal income tax rate for non-residents is high at 25%. However, if the gross rental income on a furnished flat is less that €76,300 per annum, deductions of up to 72% can be made. Only the remaining 28% of gross income is taxed, amounting to an effective tax rate of only 7%.

In the UK, personal deductions combined with depreciation and costs are higher than the assumed gross income of €1,500 per month (€18,000 per year), leading to zero taxable income.

Effective rental income tax rates are generally below 10% in Luxembourg, France, Japan, South Korea, Mexico, New Zealand and the UK.

Gross or net taxation
In Canada and the US, non-resident landlords are given the option to choose between two options: ‘gross’ or ‘net’ income taxation. The gross income tax rate is high but the process is very simple; no deductions, no allowances, no accountants involved.
In the US, the gross rental income of non-resident aliens (NRA) that are “not effectively connected” is taxed at 30%, withheld by the tenant. In Canada, gross income is subject to a fixed 25% tax, also withheld by the tenant.

Landlords can alternatively opt to pay net income after allowed deductions, potentially lowering tax rates, but the rules are complicated. Maintenance, local taxes and depreciation are deductible subject to certain rules.

In Canada, by “electing under section 216” the net income is taxed at rates ranging from 15.5% to 29%. After deductions and allowance, the final effective tax rates range from 8.14% to 14.87%, much lower than the 25% gross rate.
Rental income tax assumptions
Global Property Guide’s estimate of the “effective” tax rate includes adjustments for depreciation, and any other typical costs which a landlord pays such as management charges, buildings insurance, real estate agency fees, real estate taxes, etc. However, mortgage expense tax relief is not included.

To make the income tax situation easy to understand, the study adopts a standard case:
1. Gross rental income is US$1,500/month, or US$18,000 per year (€1,500 or €18,000 for Europe).
2. The property is directly jointly owned by husband and wife, who are both foreigners and non-residents. Many countries impose higher taxes on foreigners and/or non-residents, or allow them lower deductions.
3. The owners have no other local income aside from rent.
4. There is no mortgage, i.e., no loan was taken to buy the rental unit.

The result is an “effective income tax rate”, which is typically different from the nominal tax rate. These effective rates represent what taxes are really payable, after all allowances and deductions. They provide a clearer and more realistic picture of a country’s tax situation for potential investors.

Social effects
Higher marginal taxes on rental properties are argued to be pro-poor because of the perception that landlords and property owners are typically rich, thus should be taxed more. The perception is amplified when taxing non-resident foreigners.

However, excessive taxation of rental property affects the availability of affordable housing, as shown by much research. High taxes on rental income lead to low net rental yields, which discourage owners from renting out their properties.

And due to the filtering effect, any policy that makes it difficult or expensive to produce any type of housing restricts the available stock of low-cost housing. The filtering effect is a process by which poorer households move to occupy the void left by richer households as they move from renting to ownership or to better and newer housing.

Spain’s high rental income tax rate of 24%, for instance, combined with restrictive tenancy laws, has led to the shrinking of the private rental market. Property owners prefer to keep their housing units empty rather than rent them out. In 2001, about 14% of the total housing stock was vacant, more than the entire rental stock (which was only 10% of the housing stock).

From an investor’s point of view, the significant difference between nominal and effective tax rates in many countries highlights the importance of tax planning. Knowing all the legally allowable deductions and allowances can spell the difference between profits and losses, and separate gainers from losers.

source: homesgofast.com

More Long Distance Overseas Property Buyers says Moneycorp

2007-12-29T21:05:00.002-08:00

With its beautiful sun-soaked beaches, the island paradise of Cape Verde is a good place to consider buying overseas property. Like many property hot spots Cape Verde is further a field than traditional locations. Cape Verde has seen a dramatic rise in popularity over the last few years. Thanks in part to new air routes and the fantastic publicity the country has received, Cape Verde property enquiries have increased a staggering ten times over since 2004. Property enquiries to TOPA International Estate Agents spiked by 50 per cent last September and October

Foreign Currency Specialist Moneycorp spokesman Nick Bull “increasingly Brits are investigating property investment opportunities further a field. Moneycorp’s figures show that whilst Spain and France remain the top two choices among people buying a second home abroad, in the autumn period last year we saw the greatest increase in overseas property purchases in countries such as the USA, Thailand and Bulgaria.”

He adds: “with Sterling still strong against the US dollar, we may see this trend echoed in the autumn 2007, as Brits snap up properties in the US and other countries such as Dubai, whose currencies follow the movements of the US dollar.”

Cape Verde is made up of ten volcanic islands in the North Atlantic Ocean. The group of Cape Verde islands includes Santo Antao, Sao Vicente, Santa Luzia, Sao Nicolau, Sal and Boa Vista. The southern part the islands include Sao Tiago, Brava, Fogo, and Maio.

The country is named after Cap-Vert (meaning Green Cape), now in Senegal, the westernmost point of continental Africa. The Republic of Cape Verde or Cape Verde is a republic located of the North Atlantic Ocean, off the western coast of Africa. The previously uninhabited islands were discovered and colonized by the Portuguese in the 15th century.

New international airports on Santiago and Boa Vista will put an end to the accessibility problems that have slowed the holiday rental market and a recent application to join the EU shows that Cape Verde is bound to increase the desirability of the islands.

source: homesgofast.com

Rental Growth in the UK Reaches Record Levels

2007-12-29T21:05:00.001-08:00

The Royal Institute of Chartered Surveyors recently released its lettings survey for the 2nd quarter of 2007, and it shows that buy-to-let investors are increasingly moving into the residential real estate market as rents rise. This quarterly survey provides a comprehensive look at the lettings market in England, Wales and Scotland. It includes trends in tenant demand, rent expectations and average monthly rents.

29% more Chartered Surveyors reported a rise in tenant lettings, which is up from 15% in the previous quarter. Tenant demand for rental property has been boosted by accessibility concerns in the housing market as the market slows and many investors wait to see how the current market plays out.

Moving forward, surveyors expect rental growth in flats to continue through the autumn at least. The current uncertainty in interest rates is making would-be buyers wait to see what happens before investing in property.

While the current market is favorable for rental properties, the on-going problems in the sub-prime market will make new investments in rental properties a bit trickier in the coming months. Tighter requirements will make it more difficult for investors to purchase properties, and potentially higher interest rates will increase the need for higher rents.

RICS spokesman Jeremy Leaf noted that: “Current economic uncertainty has created an ideal platform for buy-to-let investors to cash in on rising rental levels.”

“Rising rents are offering some compensation for landlords that are experiencing higher borrowing costs although buy-to-let investment will struggle in 2008 as lenders become more discriminating, especially for ‘sub prime’ properties.”

Whatever happens in the market going forward now is a good time to own rental property in the UK.

HMO Buy to Let Property also appears to be an area where investors can benefit; multiple tenanted houses are in a shortage near universities as the student population expands.

source: homesgofast.com

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2007-12-29T21:04:00.001-08:00

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