Buying a property and moving on over to Spain can either be a relatively straightforward experience, or it can be an absolute nightmare. Largely, it is down to the amount of research you put in before you make any final decisions. Things can go wrong and costs can spiral out of control if you are not careful, especially if you blunder into purchasing a property in the Spanish market without doing your research or without any knowledge of it. It is very much up to you to do your homework.
Although this guide is meant to act as a short and rough guide, it is in no way a substitute for professional legal advice from a qualified attorney or property specialist. When you are looking at buying property in Spain – either to move to move there or just because you want to own a holiday home – then you really do need to spend money on good legal advice.
Also, always keep all copies – both digital and physical – of any invoices which relate to your purchase, legal fees, taxes, registry fees and any other financial transactions. It is easy to learn more about the Spanish property market when you do a little research.
#1: The Spanish Property Market
During the 2008 Global Financial Crisis, Spain was one of the countries that were largely hit. The Spanish property market suffered as a result, with house prices dropping as far as 30%. Although it’s been about a decade since the financial crisis, the effects are still clear, however signs of recovery are starting to show themselves. Year-on-year, market analysis shows that prices are increasing in major Spanish cities and resort towns, and in 2017 the country benefitted from an overall rise in house prices of 4% nationally.
In addition to this, transaction numbers within the Spanish property market are on the rise too, with data provided by the National Institute of Statistics showing that sales were up a staggering 16% by the end of 2017 throughout the entire country. This is good news for people looking to purchase homes in Spain as a strong market makes the entire process much easier and more beneficial in the long-term.
In Spain, home ownership levels have traditionally been high with around 80% of the country’s permanent residents owning their own home, with many of these people owning their homes outright without the aid of a mortgage.
#2: Buying vs Renting in Spain
Buying is usually preferable to renting in Spain, especially if you are only going to be there a few times per year. In Spain, rental opportunities can, in some areas, be very limited, and rental prices have been on the rise in Spain over the last few years. In some parts of the country, rental prices have increased by as much as a staggering 15% per year, making it a very expensive alternative to buying a home or apartment in the long-term. It is the growth in popularity of short-term and holiday lets through providers such as Airbnb which have prompted this rental hike.
Some Spanish authorities and cities such as Madrid have even moved to curb this holiday home rental trend and are hoping to bring in new rules throughout 2019 to control and better regulate the holiday homes sector.
If you are only considering being in Spain for the short-term then there is no reason why renting wouldn’t be the more stable choice, especially after you have included Spain’s high levels of capital gains tax which can offset a short-term purchase. If you want to be in Spain for the long-term or have a home in Spain for the long-term, then buying is going to be your most suitable option.
#3: The Benefits of Spanish Property Ownership
There is a little-known “golden visa” programme in Spain for property owners. This comes in the form of an investor-type visa whereby those who invest more than 500,000 Euros into the Spanish property market by purchasing either a residential or commercial building will be automatically eligible for a residency visa. If you are residing within the EU then this isn’t particularly important, however, for those of you in the U.S., this could really seal the deal. This visa is not a work permit, but it will let you reside in the country indefinitely.
It is very easy for foreign residents to buy a Spanish property and there are plenty of websites and estate agents which cater to residents of all countries. It is always best to use a dedicated Spanish website or real estate agent when you are looking at buying a property, as any sites and estate agents owned by companies outside Spain are typically only selling holiday homes.
Since you do not need to be a permanent resident before you purchase a property, it is entirely possible to buy your new home or commercial property before you physically move into it or acquire a visa. This does come with some inherent risks, however, and it is always best to head on out to Spain and physically view your property before settling on making a purchase. There is nothing worse than cutting corners during the purchasing process and then realising everything is not as it seemed when you finally arrive, and the costs of travel and hotels can easily be offset by the potential to lose out on money by buying a house which isn’t up-to-code or everything you imagined it would be.
Spain is a hugely popular destination for foreign residents who either want to purchase a holiday home or completely up sticks and move there. Although Spain has a very liberal approach to allowing foreign citizens to move to their country as permanent residents, the reason people choose to buy property is probably more to do with the nice weather, sandy beaches and beautiful towns and cities more than anything else! Before you commit to purchasing a house, it is best to do your research and figure out whether it’s the right thing for you.