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Expat Investor : September October 2009
September/October 2009 EXPAT INVESTOR 21 PROPERTY There's a new fractional development launched in Tunisia by the BW Group. Called The International Riviera, the ambition is to create not just a new destination but a whole new city. BW Group says the design fuses the 21st century pioneering spirit of Dubai with the sophistication of European elegance. This resort comprises 60,000 wholly--owned and shared properties, as well as Registry Collection exchange programme. The water villas are the first of a significant number of fractional properties planned for this development and will be sold on the basis of a one-eighth or six-week share of the freehold. Readers can find out more by visiting www.thebwgroup.eu or visit www.theregistrycollection.com to learn more about fractional ownership. Tunisia -- the new Morocco EC ruling drives up service charges A turn in the tide of property prices casino complex, golf, spa, marinas, retail and several well--known hotel brands. The International Riviera resort development has affiliated with The Registry Collection -- which claims to be the largest luxury exchange programme allowing fractional owners to swap their usage time so they may stay at its other destinations around the world. The BW Group believes that Tunisia is emerging as the next property market to take off. The company cites low prices, "just like they were in Morocco five years ago", along with the country's ideal geographic position as it serves as a gateway between Africa and Europe. "This stable Arab country is regarded as more Mediterranean in nature with its prime spot in the beautiful Mediterranean coast." BW Group chairman, Bobby Wahi, says that despite the global financial crisis, the multi-billion dollar project has attracted a high level of interest from international banks, investor funds and other developers. The first build phase is set to be completed in 2011 and will include 50 luxury water villas to be sold as high-end fractional ownership properties and enrolled in The Tunisia is seen as a stable Arab country more Mediterranean in nature. The BW Group hopes its International Riviera resort will attract expat attention. Tenants in rented residential property face a possible increase in service charges of 15% now and 17.5% from 1 January 2010 following a European Court ruling delivered this Summer. The European Court was asked to reach a decision following a case in the Czech Republic, in which the tax authorities had sought to tax the charges made by a landlord for the cleaning of the common parts in an apartment block. The Court ruled that the cleaning of common parts of a building did not fall within the VAT exemption for let property and represented a separate supply subject to VAT. Te rry Dockley, a VAT specialist at accountants and business advisers James Cowper, explains, "This decision is likely to have a big impact on both landlords and tenants as there is a requirement for UK VAT law to reflect the decisions of the European Court. As yet we do not know when HMRC is likely to adopt this ruling. "HRMC have typically allowed domestic service charges to be treated as exempt from VAT even where these services are provided by a third party. This exemption will probably have to be dropped, even where the services are supplied by the landlord, meaning that tenants can expect to see a 15% increase in their service charges once HMRC implement the decision, with further increases from January 2010." Mr Dockley believes this ruling will also present problems for landlords, many of whom are not VAT registered. They will have to get to grips with an unfamiliar tax regime, whilst under threat of severe penalties for late payment. What's more, the ruling could make it harder for landlords to negotiate an increase in rents and service charges. At last property owners can believe the tide in prices may well have turned for the good. Nationwide's house price index records prices rose by 0.9% in June and a three month rate of change turned positive for the first time since December 2007. Commenting on the figures Martin Gahbauer, Nationwide's Chief Economist, tells Expat Investor, "The price of a typical house rose by a seasonally adjusted 0.9% in June, building upon the improving trend seen over the last several months. At £156,442, the average house price across the UK was still 9.3% lower than a year ago, but this marks the first time since July 2008 that the year-on-year fall has been in single digits. The three month on three month rate of change -- a smoother indicator of the short- term price trend -- turned positive for the first time since December 2007 to stand at 0.9%, up from -- 0.4% in May. If the pattern of price movements seen in the first half of the year is repeated over the second half, then prices could show only a small single digit fall for 2009 as a whole. "This would represent a stark shift from trends seen at the turn of the year, when most indicators were pointing to a repeat of the large declines seen in 2008." Simon Rubinsohn, Chief Economist for the Royal Institute for Chartered Surveyors (RICS), has this to say. " ...The other interesting element of the Nationwide figures is the regional breakdown. London and the South East were amongst the fir mer areas in the second quarter, a result that is broadly consistent with the regions that have seen the strongest gains in buyer enquiries according to the monthly RICS survey. The RICS report also notes an increase in interest in Wales, something also noted in the Nationwide survey. "Tempting as it is to conclude that the bottom has now been seen in the pricing cycle, there are still considerable headwinds for the housing market to overcome, most notably in the form of further significant job losses during the balance of this year. In addition, rising market interest rates are likely to exert some upward pressure on mortgage rates even before any official move is made to begin taking back some of the monetary stimulus. That said, without any rise in new instructions the shortage of property could remain a key determinant of the market's fortunes." FOR SALE BY PRIVATE TREATY AND WITH AN OCCUPANCY TIME BY MUTUAL AGREEMENT Situated in one of the UK's most prestigious and much sought-after gated communities, known locally as 'The Jewel in the South Coast', is a magnificently fully furnished and fitted freehold 3,300sq ft ranch-style bungalow in half an acre with electronic home entry security and lightning conductor protection. WITH AN EXCLUSIVE + INNOVATIVE INTERCONTINENTAL INTEREST-ONLY FUNDING PROGRAMME OF UP TO Featuring: Adaptable flexi accommodation of up to 6 bedrooms and 3 bathrooms A 15' x 15' fully tiled American-styled kitchen + breakfast room Close to the beach, shops and first-class schools, only 90 minutes to central London A 23' x 16' snooker room ** WITH AN OPTIONAL FULLY MANAGED AND ADMINISTERED 'BUY 2 LET PROGRAMME' WITH AN INCOME OF C.£30K P.A. **Subject to status, conditional terms, due diligence + valuation. ebrochure: email@example.com 95% from1.95%pa FROM