Real Estate

Buying a home in Spain

Buying a home in Spain

Dreaming of a settling in a villa on the Costa del Sol or a sleek apartment in Barcelona’s Ramblas? Our guide to buying property in Spain explains how to make those dreams come true, from the legal requirements to the pitfalls to avoid.

The Spanish property market has many quirks, and it pays to do your research before buying a home in Spain. Knowing what to expect when buying property in Spain can help avoid any pitfalls of setting up your life abroad. Factors to be aware of when buying Spanish property include property scams, high capital gains tax, and fluctuations in the Spanish property market.

The Spanish property market

Spain was badly affected by the global financial crisis and resulting property market crash, with house prices dropping by as much as 30%. Nearly a decade on, there are signs that the recovery is finally underway, with indices showing year-on-year price increases in major cities and resorts, and an overall national rise of 4% in 2017.

Transaction numbers are increasing too, with data from the National Institute of Statistics showing sales increased by 16% in 2017.

Home ownership levels are high in Spain, with around 80% of residents owning their own home, and many doing so outright, without a mortgage.

Should you rent or buy in Spain?

Rental opportunities can be limited in some parts of Spain. One estate agency has claimed that rent prices in Spanish cities have increased by as much as 15% in a year, and that this can partially be attributed to the growing popularity of short-term holiday lets through websites such as Airbnb.

Now, some authorities in Spain are already seeking to curb this trend, with Madrid set to bring in new rules in 2019 to regulate the holiday let sector.

For those buying or selling in Spain, transaction costs are moderate, at around 10-15% of the property value.

For those considering a shorter stay, renting could be a more suitable option if you factor in Spain’s high levels of capital gains tax, which could offset any benefits of buying in the short-term.

Are foreigners allowed to buy property in Spain?

Yes. There are no restrictions on buying property in Spain, whether it’s commercial, residential or land. In fact, Spain encourages investment by foreigners, both resident and non-resident.

You will require a financial number which can acquire by visiting a police station with your passport. This is typically done on the day for Spanish or EU citizens but may take a few weeks for others.

Buy a property, get a visa

Spain currently offers a ‘golden visa’ program for property owners.

This is a form of investor’s visa. If you invest more than €500,000 in Spanish property, buying one or more properties, you will normally then be automatically eligible for a residency visa. This is not a work permit, but it will allow you to live in the country. It’s primarily aimed at retired people and holiday home buyers.

Published by Expatica.com

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