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Leasing Real Estate in Macedonia Business Articles | December 13 Tony Pena World Baseball Classic Jersey , 2007
The subprime mortgage crisis in the United States is spreading into Europe, notably the United Kingdom. Real estate values are deemed inflated throughout the continent. One exception may be Macedonia....

The subprime mortgage crisis in the United States is spreading into Europe, notably the United Kingdom. Real estate values are deemed inflated throughout the continent. One exception may be Macedonia. Purchase prices here have stagnated in the last few years and rental?rates have actually declined considerably. There is good reason to think this will change and soon: new financing vehicles are on offer and, as real incomes increase, there is a stark mismatch between?geometrically-growing?demand and arithmetically-increasing supply. ? Moreover, impressive improvements in the business climate led to the entry into retail, manufacturing Mel Rojas Jr. World Baseball Classic Jersey , and services of global giants as foreign direct investors. These need or build shopping malls, office space, and parking lots. ? Peter Roth, the General Manager of Soravia Macedonia, which?bought the Business Center in Skopje last year, predicted, in a statement quoted in "Vecer" Gregory Polanco World Baseball Classic Jersey , a Macedonian daily: " I expect the development of real estate, bigger competition, but also higher prices. I think that in the future investments will flow not only?to Skopje, but also to Ohrid, Gevgelija and other cities, near the border with Greece." "In the near future small shops in?buildings will disappear, problems with parking?spots would be overcome Starling Marte World Baseball Classic Jersey , and expensive rents would grow further," - concluded the exuberant article. ? This may all depend on the introduction of real estate leasing. Currently, it is a negligible portion of the activities of companies such as NLB Leasing and Hypo Alpe Adria Leasing. The?latter's brochure doesn't even mention it. ? "Under the terms of current legislation, we are able to offer leasing." - says Maja Lape Trajkova, director of NLB Leasing, which was established in 2000 and is owned by NLB Group,?essentially a Slovenian bank. Gjorgje Vojnovik and Oliver Zintl Nelson Cruz World Baseball Classic Jersey , the Macedonian and Austrian managers of Hypo Alpe Adria Leasing agree. Their firm is owned and fully capitalized by an Austria (Klagenfurt)-based multinational which operates in 14 countries. ? NLB Leasing offers financial and operational leases of up to 15 years to firms and individuals, on all types of properties,?second-hand and new: residential, commercial, and industrial. Hypo Alpe is more selective and limits its financing to new construction. Equity ranges from?10 (Hypo Alpe Adria Leasing) to?30 (NLB Leasing) percent, depending on the creditworthiness of the lessee. Financing is?procured from various sources, but mostly from the mother companies Jose Bautista World Baseball Classic Jersey , NLB and Hypo Alpe Adria Leasing, respectively.? ? ?NLB Leasing's "typical leasing contract is with fixed rates and not with adjustable ones, (but) a change (in the) previously agreed terms is possible, of course. When it comes to being flexible and to adjusting to the client's financing needs, the whole package is considered: period, equity, rates Jonathan Villar World Baseball Classic Jersey , IR, etc."- says Trajkova. Hypo Alpe Adria Leasing prefers the safer route of sticking to fixed rates exclusively.? ? So, why hasn't real estate leasing taken off, as it has in many other developing countries? Macedonia's banks offer mortgage financing but under onerous terms: multiple collaterals and guarantors, high fees, and an immediate transfer of the title (and of the risk associated with it) to the client. On paper, leasing is a more attractive proposition. ? The problem is a quirk in the tax laws: lessees pay VAT up front on the entire amount of the contract Carlos Santana World Baseball Classic Jersey , interest included. There is no VAT payable on interest payments made to banks, the leasing companies main competitors. "The law still protects the three major banks with a 75%?share of the market,"?complains Vojnovik. Zintl concurs: "he private customer is at a tax disadvantage" ? Even worse, expounds Trajkova: as far as the VAT law goes, financial leasing is a taxable?exchange of goods. While firms can deduct the VAT or reclaim it (in one year's time or longer, if the firm has just commenced doing business in Macedonia), individuals incur it as a net out of pocket expense. ? Additionally Jose Reyes World Baseball Classic Jersey , all lessees?have to pay a "real estate turnover tax" twice: once when they have signed the contract and once when they receive title to the property, having paid the lease in full. The turnover (or transfer) tax ranges between 3 and 5 percent, depending on the municipality. This and similar problems render?certain types of leases (such as lease contracts incorporating leaseback or buyback options) untenable. ? Trajkova compares this costly double taxation to the situation in Slovenia, where individuals pay only a property tax once. She met with officials at the Ministry of Finance, but they had no information as to when this hindrance will be removed. She claims to have formed a joint lobby, within the Chamber of Commerce, together with Hypo Alpe Adria Leasing and ot