APARTMENTS WITH GUARANTEED RETURN

Description

INVEST IN A PROPERTY WITH A SECURE RETURN

Isla Canela, S.A. is selling a selection of tourist apartments designed especially for those looking for:

• The comfort of a TURNKEY AND FURNISHED
• The security of an attractive return.
• The ease of a financially sound tenant.
• Numerous tax benefits associated with your investment.
• The future appreciation in value from the rise in the property cycle.

SPECIAL OFFER

The first purchasers of a property that is part of the marketing campaign “TOURIST APARTMENT WITH GUARANTEED RETURN” in the “RINCON DEL GOLF III” development will receive a free voucher for up to 30 days stay in any of the tourist apartments managed by Isla Canela, S.A. (*)

(*) Apartments subject to availability. Length of the stay will vary according to the season chosen.

(See terms and conditions)

TOURIST APARTMENTS AT THE RINCÓN DEL GOLF III

TURNKEY and fully furnished tourist apartments with 2 or 3 bedrooms, with a terrace and parking spot, located in the “Urbanización Rincón del Golf III”, in front of the 5th hole of the Isla Canela golf course.

The properties are part of a development completed in 2007, which includes a total of 140 apartments, extensive communal areas with gardens, children’s and adults’ swimming pools and a children’s play area.

The housing development is 2.5 km from the Isla Canela beach and 1.5 km from the Clubhouse of the Isla Canela Golf Club.

The tourist apartments are fully furnished and equipped for use (*).

A guaranteed investment in a unique place with all the services on your doorstep.

(*) Linen, crockery and small electrical appliances will be provided by Isla Canela, S.A., who have the right to remove them when the lease contract expires.

GUARANTEED RETURN OF 16% ^(*)

• Isla Canela S.A. guarantees an annual return of 4% on the sale price, excluding taxes, over the 4 years following the purchase, through the payment of an annual rent tied to a “non-residential lease contract” for a period of 10 years, with both parties obliged to comply for the first 4 years.
• The “non-residential lease contract” allows Isla Canela, S.A. to sublet the property to third parties so they may use the property for holiday rentals.
• The rent and the corresponding VAT will be charged at the expiration of every annual payment through a bank transfer to the account indicated in the contract by the client, and an invoice must be issued for this.

Security for the seller and the operator:

• Isla Canela S.A. is a company belonging to the development and construction group PRYCONSA, which has over 50 years’ experience and has built more than 50,000 houses.
• Isla Canela S.A. has developed and promoted the Isla Canela National Centre of Tourist Interest in Ayamonte for over 30 years.
• In addition to its main activity as real estate developers and constructors, Isla Canela S.A. manages the Hotel Isla Canela Golf ****, the 18-hole Isla Canela Golf Course, the Isla Canela sports marina with 236 berths, and for more than 4 years has successfully managed 70 more tourist apartments in Isla Canela.

^(*) Total guaranteed cumulative return by Isla Canela S.A. of 4% annually calculated on the purchase price of the property, excluding taxes, over the first for years following the sale.

TAX BENEFITS ASSOCIATED WITH YOUR INVESTMENT

The investment in tourist apartments comes with a series of tax benefits, especially advisable for individuals, but that does not mean that legal entities should be less interested.

A simple tax management allows you to:

• Recover 100% of the VAT paid when acquiring the tourist apartment, provided that the property is intended for those purposes for a period of 10 years. In the event that the purchaser decides not to use the apartment at a specific moment and has already processed the total VAT deduction, they must settle this with Inland Revenue for 1/10 of the deducted VAT for every remaining year until 10 years have been reached.
• Deduct all the necessary expenses to obtain the return:
  • Interests of foreign capital invested in the acquisition of the property, provided that they do not exceed the amount of the untaxed returns, the excess may be deducted in the following four years.
  • Non-state rates and surcharges, like the Land Value Tax.
  • Amounts earned by third parties for personal services, such as administration, maintenance, legal work, etc.
  • Amount of the insurance premium contracts
  • Amounts assigned to services or supplies, if necessary.
  • Amounts assigned to the amortisation of the property, which will be deductible up to 3% of the cost of acquisition, excluding the value of the land.

Formal requirements to obtain the tax benefits:

• Tax registration declaration in the Census of Employers and Professionals (Form 037). This declaration should be made before commencing the activity, in order to deduct the amounts paid before the rental service started.
• Quarterly VAT declarations (Form 303).
• Annual Information Return on Transactions with Third Parties (Form 347)
• It is not necessary to register for the Economic Activities Tax to rent property whose quantity does not exceed the established limits.

Advisable tax benefits for individuals or legal entities.

LEGAL ASPECTS

Obligations of Isla Canela S.A. as operator.

• Payment of the guaranteed rent in the established periods.
• Payment of the municipal waste rate.
• Contracting and paying the necessary water, electricity and internet consumption for the correct operation of the leased unit.
• Payments to the Association of Property Owners for the leased unit for the period of the contract.
• Isla Canela will perform its own maintenance on the tourist apartments.
• Isla Canela S.A. undertakes to take the necessary measures to register the apartment with the relevant tourist administrations to be able to perform this activity.
• Isla Canela S.A. will be responsible for contracting and managing the necessary services to carry out the tourist activity (cleaning, laundry, etc.).

Obligations of the purchaser

• Insure the property against fire, damage and third party liability.
• Payment of the Land Value Tax.
• The costs resulting from major failures or breakages of appliances which are not covered by the legal guarantees of the seller.
• Keep the apartment registered in the tourism registry.
• Pay the possible charges which may come from the Association of Property Owners.
• Allow Isla Canela S.A. to represent them before the Association of Property Owners and public organisations.

FURNITURE

The tourist apartments will be equipped with furniture which is ready to use. As such, the purchaser may visit the apartment to learn of the characteristics and the state of the furniture. The purchaser may not, once the period of use has finished, demand the substitution or repair of the furniture as a result of the use.