Spain’s dismal housing market and economic woes have left many regions struggling with undervalued property and slow sales activity, but new laws are helping to revive coastal property values. Reforms to the Coastal Law, which was originally intended to protect seaside areas, have now made it possible for leases to coastal property to be bought and sold rather than only inherited, which some experts believe have boosted value by hundreds of thousands of Euros. It also allows owners of such properties to make major refurbishments and so increase their value, whereas before only minor alterations were allowed in an attempt to preserve the look and feel of many areas. For more on this continue reading the following article from Property Wire.
Reforms to the Coastal Law in Spain are affecting the value of properties and there are reports of a frenzy of activity in some locations.
The changes to the law, which effectively nationalized the whole coast of Spain when it was introduced in 1988, allows refurbishments of homes close to the seafront, and creates a market for longer leases, opening up investment opportunities for those in the know.
‘This troublesome piece of legislation expropriated private property without compensation, whilst spectacularly failing to achieve its stated objective of protecting the coast for the public good,’ explained Mark Stucklin of Spanish Property Insight.
Owners of expropriated homes that were legally built before the Ley de Costas were given a 30 year concession of use, effectively a type of lease, many of which were due to expire in 2018.
Now the Ley de Costas has been reformed, extending concessions from 30 years to 75 years and making it legal to buy and sell concessions that before could only be inherited. ‘As a result, concessions are now much more valuable. Indeed, some could have increased in value by hundreds of thousands of Euros,’ explained Stucklin.
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The market has already reacted. ‘The changes to the coastal law are affecting the value of homes,’ Juan Fernandz-Aceytuno, head of the Sociedad de Tasación appraisal company, told the Spanish press.
‘In some areas the new law has liberated the market, and I have heard reports of a frenzy of transactions,’ added Stucklin.
The new law also makes it possible to refurbish homes in the ‘zone of special protection’ close to the seafront, though new building and extensions are still forbidden.
‘So owners of homes on the prime land closest to the seafront, some of the most sought after locations in Spain, can now invest in upgrading their properties, which before they were forbidden from doing as only minor repairs were allowed. Better, refurbished homes should mean higher prices and a more attractive coastline,’ Stucklin pointed out.
The changes to the law have passed onto the statute book, but some autonomous regional governments, such as Andalucia, Asturias, the Canaries, Catalonia and the Basque Country, have announced plans to challenge it in the Constitutional Court on the grounds that it infringes on their powers over town planning.
‘For example, the national government can override municipal town plans under the new law. We will have to wait and see what happens,’ added Stucklin.
However, many believe that the changes do not go far enough and the law should have been scrapped and replaced. They point out that it in its previous form it failed to protect the coast whilst causing anguish for many private owners whilst powerful developers have got away with flouting the law.
However, the reforms mean that 154,000 homes on the coast are now protected, 3,400 homes get an amnesty and won’t be demolished and 24,000 get a stay of execution with right of use concessions extended to 75 years. Also some 125,000 properties can get building licenses, though not to increase size, height or surface areas.
This article was republished with permission from Property Wire.