Buying a property and moving on to Spain can be a relatively straightforward experience, or it can be an absolute nightmare. Primarily, 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 there or just because you want to own a holiday home – then you do need to spend money on sound legal advice.
Also, always keep all digital and physical copies of any invoices that 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 hit hard. The Spanish property market suffered as a result, and house prices dropped as much as 30%. However, low house prices didn’t last, and now the recovery is buoying homebuyer enthusiasm.
Market analysis shows that prices are increasing in major Spanish cities and resort towns yearly. In 2017 Spanish property prices rose an average of 4% nationally.
Plus, house sales volumes are up too. The National Institute of Statistics data shows sales up a staggering 16% in 2017.
In Spain, homeownership has traditionally been good, with around 80% of its permanent residents owning their own homes. Plus, many homeowners don’t have 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 minimal, 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 a staggering 15% per year, making it a costly alternative to buying a home or apartment in the long term. The growth in popularity of short-term and holiday lets through providers such as Airbnb have prompted this rental hike.
Some Spanish authorities and cities such as Madrid have even moved to curb this holiday home rental trend and hope 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, 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 will be your most suitable option.
#3: The Benefits of Spanish Property Ownership
There is the”golden visa” program in Spain for property owners. An investor-type residence visa for offshore investors who invest more than 500,000 Euros into the Spanish property market. Residential and commercial property is applicable, and the purchaser will be automatically eligible for a residency visa. If you are residing within the EU, this isn’t particularly important. However, this could seal the deal for those of you in the U.S. This visa is not a work permit, but it will let you reside in the country indefinitely.
It is straightforward for foreign residents to buy 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 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 purchasing a property, it is entirely possible to buy your new home or commercial property before physically seeing it or acquiring a visa. Do your due diligence, and that should include a site visit before signing the sale and purchase agreement.
There is nothing worse than cutting corners during the purchasing process and then realizing 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. Spain has a very liberal approach to allowing foreign citizens to move to their country as permanent residents. Another incentive is the nice weather, sandy beaches, and beautiful towns and cities. However, before you commit to purchasing a house, it is best to research and figure out whether it’s the right thing for you.