Off plan property on Lanzarote has become an increasingly popular option for investors over the last few years.
Growing concerns over interest rate rises and house price growth sustainability in the UK has fuelled the growth of so-called buy-to-jet investment. A phenomenon that has been further exacerbated by uncertain returns from the world’s stock markets.
To date, the property market in Lanzarote has provided solid increases in capital value for off-plan investors. The islands year round sunshine and clement temperatures also creates excellent rental potential for those who want to generate a regular return on their investment.
Rising Capital Value
Buying off-plan means that you are paying today’s price for a building that will not be completed for up to 18 months. If the capital value of that unit rises over that period then you have made a profit.
Tax-Free Profit
One of the most attractive elements of off-plan investment is that this profit is entirely free from Capital Gains Tax if you sell the property on or before the building completion date.
Non-residents are normally charged 35% Capital Gains Tax on the sale of all other types of property.
Staged Payments
Arrangements vary but usually investors are only asked to make no more than an initial deposit payment of 30%. Which basically means that you can secure a high value asset for a low capital outlay.
Choice
Off plan investors can usually select the cream of the crop within any development.
They are also given input into the layout and finish of their new home. For example it is normal to be offered a choice of paint colours, tiling, internal layout, kitchen appliances etc.
Which basically means you are getting exactly the property you want – and all in a brand new condition.
All work is usually guaranteed for a minimum of ten years as well, providing a degree of security that is unique to off plan purchasing.
Monthly Returns
Many developers offer properties with a fixed rental yield for a set period built into the deal. This allows investors to enjoy a pre-determined monthly return on their investment, whilst the capital value of the property rises as well.
Hassle Free
No trawling around estate agents. No endless viewings. No chain. No chance of being gazumped. Plus you have plenty of time to complete all of the mortgage and legal aspects of the purchase.
Which all means that buying off plan is usually far less stressful then the more traditional house purchase process.
Our Property Resources
We have a comprehensive list of Estate Agents on the Island, a property buyers guide and a list of property for sale.