From Alan Knox Associates appointed UK Agents to The Resort Group. We can advise and assist with your holiday property investment
If you are considering buying investment property abroad we are planning to provide you with a series of articles which we hope will assist you in making a sound decision.
See below the first of these and look out for others to follow. Any comments and feedback you might wish to contribute would be appreciated.
With construction of White Sands Hotel & Spa well under way on the idyllic, undiscovered Island of Boa Vista in Cape Verde, The Resort Group PLC is offering a range of fantastic investment opportunities for those looking to strengthen their portfolios with a secure property investment that comes with all the benefits of a lifestyle purchase.
With 835 stunning Resort properties available – including lavish suites with their own swim-up pools, whirlpool baths and hot tubs, as well as exclusive private villas with private gardens and plunge pools (and many more options besides!) – the benefits of being a property owner at White Sands Hotel & Spa practically speak for themselves.
We’re confident that investing in a luxury property with The Resort Group PLC will deliver everything you could hope for. From 12% assured returns from day one of purchase, to all the advantages that come with owning your very own piece of paradise in the sun, White Sands Hotel & Spa has it all. This 5-star development on the tropical archipelago of Cape Verde presents an unrivalled opportunity for investors to purchase a first-class property that will deliver joy, relaxation, long-term growth and regular rental returns.
The first of this series follows:
- Strengthening Your Portfolio with Overseas Property Investments
In the current financial climate, taking steps to diversify your portfolio to add strength, security, and reduce risk has never been more critical. Indeed, nearly all investment professionals agree that diversification is the most important component of reaching long-range financial goals while minimising risk – and that, of course, is the ultimate goalof an investment portfolio.
For many people, when they think of investments, it’s the traditional asset classes of stocks, bonds and cash that come to mind. A strong investment portfolio, however, will also include at least one alternative investment, which will serve to counterbalance the inherent risks that come when placing your entire faith in the notoriously volatile stock market.
Indeed, the UK stock market has been leaving investors over-exposed for the past 20 years. Recent research undertaken by Fidelity for Telegraph Money reveals that stocks have only been in the top three asset performers twice in the past two decades – once in 1997, and once again in 2009.
Property, of course, has always been a sound investment choice. But, as Docherty points out, the stability of the domestic market can no longer be relied upon in these uncertain times.
This is being compounded by recent changes in UK tax laws, which are causing all sorts of concerns for UK buy-to-let property investors. The changes mean that landlords are now losing their right to claim back their mortgage interest costs at the rate at which they pay income tax – which had stood at 45%. Instead, they will see this disappear over the next three years and be replaced with a 20% tax credit. This comes on top of the 3% surcharge on stamp duty – introduced in April 2016 – which is now payable on all buy-to-let purchases.
The compounding result is that landlords are having to put up their rents just to make ends meet. However, this simply isn’t an option for many, and one in four buy-to-let investors told Telegraph Money in November that they find themselves left with no choice but to sell up.
Opportunity on the international property market is rife, and if you choose the right property in the right location with the right terms, you’ll not only reduce risk within your portfolio, but will also start seeing higher returns.
Buy-to-let Tax Changes/Mortgage Interest relief
- From 2020 landlords will no longer be able to deduct the cost of their mortgage interest from their rental income when they calculate the tax due.
- So, Tax will be paid on Turnover rather than profit, meaning tax could be due on none existent income
- For higher-rate tax payers mortgage costs above 75% of rental income will make their BTL investment loss making
- Mortgage Interest relief will be restricted to 20%, meaning higher and additional-rate tax payers will particularly affected
Example: Landlord pays 40pc tax
Now your BTL earns £20,000 per year and the interest only mortgage costs £13,000. Tax is due on the profit. You pay tax on £7,000 meaning £2800 to HMRC and £4200 for you.
From 2020 tax is due on your full rental income of £20,000, less a tax credit equivalent to basic rate tax on the interest
You pay basic rate tax on £20,000 (£8000) less the 20pc credit (20pc of £13000 – £2600)
HMRC gets £5400 and you get £1600. Your tax bill has gone up by 93pc
With all this combined, it’s no wonder that overseas properties are becoming the alternative investment of choice for many of today’s smart investors. Indeed, as was recently reported by the Association of International Property Professionals (AIPP), an estimated 30,000 Brits invested in an overseas property in 2016 alone.