THE PROPERTY MARKET

Inner city renovations Property

Over the past two years there has been a noticeable increase in construction/ renovation of old properties in city and town centres; these old properties are often situated in good locations and are in short supply, and have consequently attracted investors looking to capitalise on the opportunity.

The government offers incentives to renovate or rebuild old properties and ruins in town centres as part of the urban rehabilitation programme, such as a lower VAT rate (6%) on construction materials which effectively reduces building costs by more than 10%; no cost for the building license; exemption of IMT (property transfer tax) and exemption of IMI (council tax) for three years. In addition, some banks are offering preferential (lower) interest rates to finance the renovation work.

The rehabilitation program supports the improvement, renovation/ restauration, repair and conservation of property for residential use and, in general, supports to make a town more pleasant to live in.

Despite these favourable incentives and conditions, there are still many old properties that remain unused and sometimes in ruin – an undesirable situation in light of the stress in various cities and towns for affordable housing. Good news is that Report by property expert Robert Bijker

GOLF PROPERTIES - VILLAS - APARTMENTS - TOWNHOUSES - PLOTS

SINGLE STOREY 3 BEDROOM VILLA AND POOL NEAR VILAMOURA. Exclusive Listing of Yellow Homes - Located on peaceful plot in the village of Benfarras next to Vilamoura, sits this rustic 3 bedroom bungalow villa. The property offers privacy on a fenced and walled plot of land without being isolated. The traditional wood and bamboo ceilings combined with the Santa Catarina floor tiles gives the villa a rustic and charming feel to it. Price: €365.000 Ref: P-OLT EC class G. AMI: 6232 Contact us! Our email is info@yellowhomes.com or call us on (+351) 289 301 294 Find out more info on our website www.yellowhomes.com

the government has plans to allow local municipalities to dramatically increase the council tax (IMI) where a property has been vacant for more than two years, and could start with an increase in IMI by 600% as early as 2019. The IMI can continue to increase by 10% per annum, up to a maximum of 12 times the original IMI value.

As demand for this type of property is outstripping supply, it remains a financially rewarding opportunity to buy and renovate a property in urban centers. However, when on the market, these properties are more often than not too expensive for lowand middle-income families due to their prime location.

Various banks still have many unsold foreclosed properties on their books. It is amazing to have witnessed the speed at which they repossessed homes at the beginning of the crisis and even more amazing to watch the slowness of properties being sold off. However, Lonestar who owns 75% of Novo Banco has reached an

agreement to sell off a large chunk of foreclosed properties (a mix of almost 9,000 residential and commercial properties) to Anchorage Capital Group, a New York-based investment adviser, for €390 million while the book value is €716.7 million. This is part of the clean-up of the balance sheet of Novo Banco, with the balance to be covered by the resolution fund. These are properties that can come back on the market rather sooner

GOLF PROPERTIES - VILLAS - APARTMENTS - TOWNHOUSES - PLOTS

FERREIRAS – MODERN 3 BED VILLA FOR SALE WITH LARGE COMMUNAL POOL. This beautiful presented townhouse/ attached villa for sale is located in Ferreiras near Albufeira in the central Algarve. The property is set in a small, fully gated and very well maintained condominium. This is a truly stunning property in walking distance to numerous amenities. The basement has plenty of storage space as well as a 2 car garage with electric entrance door. Must be seen! Ref: P-ATR Price €315.000 EC class B. AMI: 6232 Contact us! Our email is info@yellowhomes.com or call us on (+351) 289 301 294 Find out more info on our website www.yellowhomes.com

than later, and likely to be priced at a discount to similar properties, as ACG tries to reliquify.

In the long run, the only way to alleviate the imbalances in some urban areas of the residential property market is for the government to come up with a viable plan.

Robert Bijker Director

Yellow Homes Land & Houses Algarve www.algarvepropertysearch.com www.algarve-portugal-immobilien.de

Vilamoura Office EN 125, Benfarras Boliqueime 8100 - 068 Boliqueime Tel: 289 301294; Fax: 289 301439 AMI 6232

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