Most states did not worsen conditions for foreigners in their markets
The first myth is that states experiencing serious budget shortfalls have turned to wealthy foreigners who bought up their real estate. In particular, they are raising various taxes. To say that this rumor is completely unfounded would be false – taxes were raised in some places. In particular, as experts note, since July 1, 2010, VAT was increased on real estate in Spain – from 7% to 8%, on other goods and services, including undeveloped land – from 16% to 18%. The authorities do not hide that they are counting on increased revenue – according to estimates, this measure should bring in up to €10 billion per year. However, the tax innovation cannot be called ruinous for buyers, because the most common purchase amount for real estate in the country is €250,000. And if previously VAT was €17,500, now it is €20,000.
Similarly, VAT increased in Portugal – by 1%. True, it was already high at 20%, and from July 1 of this year it became 21%.
An interesting situation developed in Greece. Already high VAT (21%) was increased to 23%. However, this tax is calculated from the cadastral value, which is 2-3 times lower than the real value. In addition, as experts note, the country also has an annual tax, but it is levied on real estate with a cadastral value above €243,000. The calculation is based on the number of owners: the above figure applies when there is one owner, but if the property belongs to a married couple, the 'threshold' becomes €486,000. In fact (taking into account the difference between cadastral and real values), only those who own villas worth more than €700,000-800,000 have to pay this tax – and such purchases are not that common.
The second myth concerns the sharp increase in the cost of maintaining foreign real estate. To say that this is not at all true would be false. In a crisis, everything becomes more expensive everywhere, and if in some country the tariffs for property maintenance and utilities have increased, it will affect everyone – both locals and foreigners. Therefore, utility payments have increased in some places. However, this happened, firstly, to a moderate extent, secondly, for quite objective reasons. And thirdly, in normal countries no one would think of selectively 'milking' foreigners.
Third myth: the local population has become worse towards foreigners. Some believe that visitors take away their jobs. Others don't think anything – they just rob foreigners.
Again, it is not worth claiming that this idea came out of nowhere. Experts advise: do not buy real estate in countries where the population has a different worldview than yours. If Europeans are mostly peaceful and friendly, then in Turkey or Egypt you should consider your appearance and safety when going to an unfamiliar area.
Overall, the local population treats visitors kindly, understanding that providing services to foreigners is sometimes the only opportunity to earn money during a crisis. On the other hand, buyers should remember the simple wisdom of not imposing their own rules in a foreign place. One must respect the feelings and beliefs of the local population, not flaunt one's wealth, and avoid dangerous areas (if they exist – you will be warned).
As we can see, these common notions are exactly myths – i.e., they are based on real facts, but so 'enriched' by popular imagination that even their own mother wouldn't recognize them. Problems do occur, but overall, according to the unanimous opinion of experts, now is the best time to buy 'foreign property'. First, prices have dropped dramatically due to the crisis. And second, due to the sharp decline in the flow of buyers, those who do come to the market with money feel almost like gods. The choice is huge, buyers are 'wined and dined' in restaurants, sellers demonstrate 'local hospitality'.