People wishing to buy holiday homes will be heading for the Spanish hills, in light of the 2 per cent property tax on second homes, according to estate agents.
The tax will be just another reason, apart from the warm climate, for people to purchase homes in Spain, said Mr Diarmuid Condon of Independent Property Consultants which deals in property in the Costa Blanca, Marbella and Tenerife.
"People who would have bought in Ireland will be saying `We might as well go abroad. There's no incentive to buy here'," Mr Condon said.
For those who want to invest in property and are put off by the tax, Spain is an option, Mr Condon said. But he warned that buying low-cost property in seasonal resorts could result in low returns. Without good golf courses to entice tenants during the off-season, those who wished to rent out property might find their homes empty for some of the year.
Equally, although the price of property was rising in Spain, those wishing to make money on appreciating house prices should be wary that the market could turn, he said.
But whatever people can expect in Spain, they won't have to pay an annual tax on their holiday home such as the one introduced here yesterday. Ms Joana Boyeras, a specialist in Spanish property law at Corish & Co in England, said local rates and an income tax did apply to anyone owning property in Spain. But these taxes would not be as high as the annual tax on holiday homes introduced yesterday.