Three overseas property hotspots

8 December 2007

A three-hour flight from London, Morocco has year-round sunshine.

Prices start from £225,000 for a single storey house with plunge pool. At the other end of the scale, Donald Trump is building Trump Fallon villas at Cap Cana, from £3.5m for a house on a 1.5-acre plot with ocean views. Spanish developer Sotogrande, meanwhile, is building a boutique hotel and a 353-unit condominium. Condos start at £549,137 for 232 square metres.

Foreign owners at Cap Cana – and at the Punta Perla Golf, Marina and Spa Resort, on the east coast, due to complete in 2012 – have tax-free status for 10 years, including rental and capital gains tax. Buyers pay transfer taxes and other liabilities amounting to around 6% of the purchase price. Capital gains tax is payable at 25%; annual property tax is 1%.

Cape Verde

A five-and-a-half-hour flight away, this former Portuguese colony is closer than the Caribbean and property prices are reasonable; they jumped 11% last year, however, and are expected to keep growing.

Cape Verde is a string of 10 islands in the Atlantic Ocean, 300 miles off the west coast of Africa. Some islands, such as Sal, are flat, others, including Santiago, have mountain scenery and lush volcanic slopes. Tourism increased 26% last year; more than 500,000 people a year are expected to visit by 2015. Many developers offer guaranteed rental deals, and the average two-bedroom property costs just £75,000.

The concrete cowboys are moving in, particularly on Sal, but laws are being passed to try and preserve the natural environment. One of the most eco-friendly developments is the Sambala Resort, on Santiago, set within 20 sq kms of privately owned valleys and coastline.

Built in colonial style, Sambala will incorporate four villages, a five-star hotel, tennis courts and two golf courses. Tracts of land have been preserved for the protection of birds and turtles, energy-efficient water-treatment plants are being installed and a school has been built for the local community – Cape Verde is still very poor.

Two-storey, two-bedroom town houses are available from E189,000, including a guaranteed 5% rental income. Buying costs of around 6% include a 3% transfer tax, registration and legal fees. Non-residents pay an annual 3% property tax on 25% of the value. Capital gains tax is payable at 3% on profits over 30%.