REACT NewsletterThe Real Estate Advisory Centre is here to save you!November 2005In this issue

* At last a service you can trust!

* SIPP your property

* Spanish Land Grab Law

DID YOU KNOW? Millions of Brits are buying homes overseas and risking a fortune. It’s easy to be mislead, thousands of miles away, putting your trust into a complete stranger, just for the sheer fact that he talks your language. It’s even easier to lose your entire life savings in one foul swoop.

Adam Gough

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~At last a service you can trust!

If your searching for property overseas, then it’s worth talking to us, The Real Estate Advisory Centre Tenerife. Client advisor’s offer free confidential advice on purchasing property abroad, and may even save you.

“We also carry an extensive range of safe and secure property, Fully vetted and searched by our legal experts, Ask about the React Protection Guarantee”

The Real Estate Advisory Centre is here to help with your overseas investment and property purchase.

Focused on Property in Tenerife and the Canary islands we offer free, sound, financial advice to anybody investing into Spanish property. Our team of client advisors can visit your location and ensure your property purchase will be a safe and secure one. Buying property in Tenerife or overseas can be very daunting; The Real Estate Advisory is here to help.

‘We will put your savings, into safe hands’ Our team of experts will vet your property purchase free of charge and advise you on any pitfalls it may find. All of our advice is free, and we have many additional services that can ensure your investment a happy one. We also carry an extensive portfolio of safe and secure property, fully vetted by our legal experts, and offer our very own ‘REACT Protection Guarantee’

A visit to your local office could save you thousands, and even offer you a safer and secure deal on any property you may have interest in.

Contact us today, we can save you

.

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~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~SIPP your property

Self-invested personal pensions (Sipps) offer greater flexibility and are about to become very popular.

High rollers, no longer satisfied to leave their retirement nest eggs in the hands of underperforming fund managers, are increasingly switching to DIY personal pensions.

Self-invested personal pensions (Sipps) offer far greater flexibility than ordinary personal and occupational pensions because you can have many types of investment in them, including British and foreign stocks, unit trusts, investments trusts, managed life funds, unit-linked funds, and even commercial property.

This allows you to spread the risk of products or providers performing badly. If you are unhappy with the performance of your ordinary personal-pension provider, switching to another provider is simply not cost-effective in the early years because charges are often loaded on to the first years' contributions.

You are effectively forced to freeze your pension and start up another one with another provider, incurring more set-up costs.

Sipps give you the freedom to switch out of poorly performing investments. They also offer the potential for much better returns, because policyholders can adopt a more aggressive investment strategy than large pension funds. And yet they get the same tax reliefs as ordinary personal pensions.

Although Sipps have been around since 1989, they are only just taking off, thanks largely to a change in pension rules which came into force last year. On reaching retirement age, pension policyholders can now draw an income from their pension fund rather than buying an annuity straightaway.

Under the open-market option, they can shop around for the best annuity deal and have up to the age of

75 before they have to buy one. This freedom is prompting policyholders with maturing pension funds of at least £250,000, say, to transfer their funds to Sipps.

You can also draw an income from the fund without having to retire. Most occupational pension schemes do not allow this. Investors are also realising the benefit of selling shares in their portfolio, making gains within the annual £6,500 capital-gains tax

(CGT) limit, and then buying the shares back within a Sipp to get the tax relief on the way in. Wilde

says: "The potential market for this type of pension is enormous. Our clients wonder why they haven't heard of these things before."

There are disadvantages, however. Typical charges are one percent of the fund size to set it up, followed by a 0.6 percent annual management fee, and dealing and investment advice costs on top.

The other disadvantage for those who have reached retirement age is that the level of income they draw is dependent on the performance of the underlying investments. If they do badly, the income will suffer.

And you could also end up with a much-reduced pension fund from which to buy an annuity.

Only the wealthy can really afford to take out a Sipp to start off their retirement fund. David Hutt of the specialist pensions adviser RE Hutt Group

says: "Sipps are most suitable for self-employed people who are enjoying good incomes because administration costs are far greater than with ordinary personal pensions."

Matthew Orr, partner at the stockbroker Killik & Co, which is enjoying an increase in Sipp business,

says: "This type of pension is really not cost- effective unless you are contributing at least £10,000 a year to your fund."

There are about 30 Sipp providers, with Scottish Equitable, Sun Life, and Legal & General leading the pack. The market is still so small that the Association of British Insurers has not collated data on its size.

But a spokesman says: "With the rate these pensions are growing in popularity, we will have to start looking at them closely very soon."

There are disadvantages, however. Typical charges are one percent of the fund size to set it up, followed by a 0.6 percent annual management fee, and dealing and investment advice costs on top.

The other disadvantage for those who have reached retirement age is that the level of income they draw is dependent on the performance of the underlying investments. If they do badly, the income will suffer.

And you could also end up with a much-reduced pension fund from which to buy an annuity.

Only the wealthy can really afford to take out a Sipp to start off their retirement fund. David Hutt of the specialist pensions adviser RE Hutt Group

says: "Sipps are most suitable for self-employed people who are enjoying good incomes because administration costs are far greater than with ordinary personal pensions."

Matthew Orr, partner at the stockbroker Killik & Co, which is enjoying an increase in Sipp business,

says: "This type of pension is really not cost- effective unless you are contributing at least £10,000 a year to your fund."

There are about 30 Sipp providers, with Scottish Equitable, Sun Life, and Legal & General leading the pack. The market is still so small that the Association of British Insurers has not collated data on its size.

But a spokesman says: "With the rate these pensions are growing in popularity, we will have to start looking at them closely very soon."

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~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~Spanish Land Grab Law

The Spanish land grab law (Lrau) was passed in 1994 with the intention of facilitating the development of the Valencian Community in terms of construction. It has been successful in many respects. However, especially in recent years, it has been abused by some developers and has caused huge distress to people who have had their land expropriated with little compensation and/or have been obliged to contribute large sums to neighbouring urbanisation infrastructure costs.

The problems to which the current administration of the land laws have given rise were the subject of a large gathering on November 26th 2004, which inter alia was addressed by His Excellency, Sir Peter Torry , the Ambassador of Great Britain. The legal, non-profit, action group, Asociación Valenciana de los Derechos Humanos Medioambientales y en contra de los Abusos Urbanisticos (Abusos Urbanisticos No), was formed and registered to provide a coordinated voice to those affected by and concerned about the application of Valencia’s land laws. This includes Valencianos and other Spaniards, and European Citizens as well as residents who originate from many other parts of the world.

For those of you thinking of buying in Tenerife but being put off by the LRAU (The Land Grab Law) there is good news. The law has been changed in the following ways.

* Landowners rights must be protected and their legitimate interests guaranteed. To avoid abuse developers must outline the project and cost beforehand.

* Projects will be favoured when they have the support of the majority of landowners as opposed to a private developer and when they have the largest economic benefits for proprietors.

* Town Halls must now establish an economic selection procedure before choosing a developer and must adhere to it at all times. This ensures the impartiality of the council.

* New rules will include more transparency in selection of developers as they will have to adhere to tendering and fair bidding laws.

* The LRAU (land grab law) will now oblige town halls to adjust developments to the real needs of the population as regards social housing policies. New projects must allow space for social housing projects which should reduce speculation as lower profits would be made on any project that is approved.

These changes should take away the real possibility in coastal areas of the LRAU taking away land. It should also allow people to buy with more confidence and without worrying about the small possibility of being affected by the law. Tenerife is the real paradise in Spain so come and live here and join the many people who already enjoying the delights of the area.

Article submitted on 2008-09-12