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The “Spanish dream” of owning a property in Spain hit the headlines recently, after a proposed property tax was presented by the Spanish Prime Minister. An increased tax on property purchases for non residents who live outside of the EU.

This news caused concern amongst those of us from outside of the EU who are looking to purchase property in Spain. However, it isn’t always easy to find reliable and trustworthy information regarding such topics as this. So we headed straight for the ever reliable Spanish Property Insight, for their help and guidance with this topic. They have gathered data and information which helped us to look into this proposal a little closer.

The Proposal:

At the start of the year the Spanish Government stated that they plan to impose a higher tax of up to 100% on property purchases by non-resident buyers from outside of the European Union. The Spanish Government called these buyers “speculators” who they claim are exacerbating the housing crisis by driving up the property prices for local residents.

The Data:

According to the government 27,000 homes were purchased by non-resident buyers from outside of the EU in 2023. However, Spanish notary figures show that 18,648 homes were purchased by this group. That is actually a 7% year on year decline.

Furthermore, the figures also show that over the past decade this segments (non residents from outside of the EU) level of investment has been slowly shrinking, with 2023 figures being the lowest outside of the pandemic years of 2020 and 2021.

A declining growth pattern is in direct opposition with the Spanish Governments claims that this segment is the driving force behind the housing crisis:

Image by Spanish Property Insight

In 2023 non residents from outside of the European Union represented 14% of the total foreign buyer market. This is a decline from the high of 25% in 2014 and 2015. 
The total foreign market, which is dominated by EU expats from countries such as France and Germany, has grown much faster.

In 2023, there were 623,000 home sales in Spain. The non residents from outside of the EU segment had a share of just 2.99% which is the smallest share, with 79% being local buyers, and 18% being foreign buyers:

Image by Spanish Property Insight

According to regional data, British buyers concentrate in coastal regions such as the Costa del Sol, Costa Blanca and Murcia, in urbanisations that cater to the international buyer. All of which are locations that do not typically overlap with the regions experiencing house shortages.

In fact, in the specific locations that are suffering the most, the number of non-residents from outside of the EU is too small to create an impact. Furthermore, the property purchases appear to be larger villas and second homes close to the coast, not the affordable housing stock within the cities.

What Does It Mean?

In conclusion, the data shows that non-resident buyers from outside of the European Union play a minor role in the Spanish housing market. The market share for this segment is not only small, but is actually declining. The data also shows that the property being purchased by this segment focuses on the Costas, well away from the areas experiencing the housing crisis.

Ultimately, the Spanish Governments portrayal of this segment as “spectators” that are driving up the housing costs for locals is not supported by the evidence. Therefore a high taxation or total ban for this segment seems both disproportionate and misaligned from the realities of the Spanish property market.

In our opinion, it could be said that the above data speaks for itself. In addition to this, the many processes that would have to be navigated in order to bring this proposal, or any proposal like this, into place could be lengthy.

We endeavour to keep on top of the information as it comes in, and update and inform our customers as soon as we can, with accurate and reliable information. Stay posted for further updates as they come in regarding this proposed tax increase.

In the meantime if you have any questions or queries, please don’t hesitate to get in touch here, e-mail us at info@yourplaceinspain.com, or call us on 0161 870 2276.

*All images, and data in this article have been sourced from Spanish Property Insight, with permission.*

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Nueva Andalucía is the largest neighbourhood in Marbella, neighbouring the exclusive location of Puerto Banus. A beautiful balance of the glitz and glamour of Marbella, with a much more relaxed, “set back” approach.

Residential estates and private roads, lined with palm trees and a stunning backdrop of La Concha Mountain. Many have likened the area of Nueva Andalucía to Beverly Hills, yet with that traditional Andalucían touch.

The neighbourhood includes the ‘Golf Valley’ of Marbella, meaning this location is a golf lovers dream with an array of courses to choose from. Add to that the many amenities, such as restaurants, bars, cafes, commercial centres… you can find everything you need.

Property for sale in Nueva Andalucia, Marbella

The property in this neighbourhood is really quite stunning, with everything from penthouses and apartments, to townhouses, and one of a kind villas…there are so many options available.

Known for being a relaxed, calm environment just a short distance from the buzz of Marbella, could it be that the peaceful residential streets of Nueva Andalucía are calling your name?

Take a look at our current favourite properties in this unique location, by clicking here. 

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Buying a property in Spain is an exciting and life changing event for so many of our customers, and for most it is a dream that they have been working towards for many years.

Whilst viewing property and soaking up the glorious Spanish sun, it can sometimes be easy to forget the more serious side to purchasing property overseas. Well, let’s be honest, who can blame anyone for getting a little carried away when they find the property of their dreams?

So whilst it may sound like we’re bringing our customers back down to earth with a bump, (we’re absolutely not, we promise!) we’re just as excited as them! There are some serious matters that need to be fully understood when purchasing a property in Spain, and it is our job to remind customers of those matters, ideally before they even arrive in Spain.

For example – Are you aware of your obligations of owning a property in Spain? Spanish Wills? What happens at the Notary? What are the related taxes & costs when purchasing in Spain?  Whilst there is nothing to dampen your spirits or take away from the dream of owning your own home in Spain, these are matters that you should be advised of well ahead of purchasing.

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We believe that the obligations of owning a property in Spain must be fully understood by our customers before the search for property even begins. So when you do find that perfect property, there are no bumps in the road.  Our ‘Top Ten’ this week is focused on the purchase process, so here are our suggestions & tips on those matters that we help our customers with along the way…

1. THE FIRST THING TO CONSIDER – LEGAL ADVICE

When customers speak to us & tell us that they are looking for property in Spain, the first thing we advise them to do is to speak with an independent solicitor.

WHY IS THIS?

If you’re going to be a homeowner in a different country, you really need to know what you’re obligations are going to be. An independent solicitor will also guide you through the process of purchasing the property, including obtaining NIE numbers, opening bank accounts, & making a Spanish Will.

WHY AN INDEPENDENT SOLICITOR?

The reason why we suggest using an INDEPENDENT solicitor, is so that the solicitor is not associated with any agent, including us, they are working solely for & taking care of you, the customer.

2. THE PROPERTY – WHAT ARE YOU LOOKING FOR?

It is so important for us to understand exactly what our customers want from their property in Spain.

For example – Will you be using the property as a holiday home? / Will you be looking for a property with great rental potential? / Are you planning to live in Spain full time, will this be your permanent home?

We like to understand all of the details that you want from your dream property in the sun so that we can do our very best to try and find it for you from our vast portfolio.

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3. LOCATION, LOCATION, LOCATION

We have many customers that know the exact location in Spain that they want to purchase a property in, but we also got a lot of customers that are still trying to decide where they want to purchase. Just like with understanding what you want from a property, it is very important to think about what you are looking for from a location too.

Do you want it to be a lively, thriving place all year round? Are you looking for a traditional, Spanish lifestyle in a small village? Do you want to be in an ex-pat community? Is it important for you to be near the sea? How about golf courses? Do you need to be close to schools, etc…

There is a lot to think about isn’t there…

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4. THE BUDGET

How much are you looking to spend on your property in Spain? To make it easier, we suggest clients stick to calculating it from a Sterling perspective.

We also suggest that you work out how much you want to spend on the whole project, so that is including the property, the taxes, purchase and legal fees (around 13-15% of the purchase price depending on the region).

(See Point 5 below for more details on this)

 

5. THE PURCHASE COSTS – 

It’s important to know the cost of purchasing in Spain, and by speaking with an independent solicitor you will be fully ‘in the know’ about all of these, meaning that you will be aware of how much these costs will be from the very beginning.

These costs include –

Legal Fees (Conveyance Fees) / Land Registry / Notary Fees / IVA or ITP (Spanish Purchase Tax)

Depending on whether you are purchasing a new build or re-sale property various other taxes & fees can apply.

To find out more, and for an estimation of these costs please contact us for an in-depth look at purchase costs.

Colorful euro banknotes

6. MORTGAGE INFORMATION – 

Spanish Mortgages are available to non residents, currently at 65/70% Loan to Value/Purchase price (whichever is the lower,) & subject to status.

Generally speaking the set up costs need to be factored in are anywhere between 2-5%, depending upon the amount borrowed.  Also the purchase costs will need to paid as well as the deposit on the property as the banks will not roll these costs into the borrowings required.

Banks do offer 100% mortgages to Spanish residents, and to non residents on some developments, this is not normal practice though.

7. CURRENCY – CHANGING YOUR MONEY – 

When it is time to complete on the purchase of your dream home in Spain, it will be in euro’s.

Ideally as a ‘Your Place in Spain Ltd’ client you will have spoken to a currency broker so that you are aware of how market fluctuations can affect the cost of your property.

It is important to understand that as the rate changes, the cost of your property purchase can too, & this can in some cases, be a considerable amount of cash.

We do recommend using a currency broker rather than a high street bank as massive savings are available, click this link to understand more about this.

8. GOING TO THE LOCATION & VIEWING PROPERTY –

Once you are ready to actually view property, it is time to fly to Spain, to your chosen location & view an organised portfolio.  

We think it is more comfortable & relaxed for our customers to fly out to Spain under their own steam, and to get to their hotel/rental property first before starting the viewings.

Once you are settled in, the viewings can commence…

Beach Couple

9. PURCHASING A PROPERTY – 

You’ve viewed the portfolio, (and in many cases one or two others that have been added to the mix whilst you’re there) and you have found ‘the one.’ You have made an offer on the property & it has been accepted.

At this point your independent solicitor should check the Reservation Contract to ensure that all is correct. In the event of anything not being as it should be, this also ensures that any moneys paid will be refundable

The legal team should then guide you through the rest of the process, including – 

Obtaining your NIE numbers / Opening bank accounts / Preparing & translating documents for you to sign / Arranging payments / Organising all final arrangements of the purchase

legal team

10. YOU’VE PURCHASED A PROPERTY IN SPAIN – NOW WHAT?

Once you own your property in Spain, the legal team should once again be on hand to direct the following –

Making sure all utilities are transferred into your name / Ensure all arrangements have been made for you to pay necessary property taxes / Inheritance & Wills

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These ‘tips’ above are to be taken as a guide of what to expect and what to be prepared for when you start your search for a property in Spain.

A large part of our service here at Your Place in Spain Ltd is talking to our customers to make sure they understand the whole process of purchasing. We’re here to talk you through every step, and in a way, hold your hand through the journey. 

We’re here to help, and if you’d like us to give you a call and talk you through the process of purchasing in Spain, or if you would rather pop into our showroom to discuss your plans for buying in Spain, then you can find our contact details here.

You know what they say… “Knowledge is power!”

Be in the know, buy safely. Talk to us today.

Joanne Lynsdale, Your Place in Spain Ltd

Joanne Lynsdale, Your Place in Spain Ltd

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We are currently finding the property market across the Costa Blanca, Murcia and Almeria extremely buoyant.  The excellent euro/pound exchange rate combined with the keen prices we are seeing right now are a big plus for the buyer.  The media are reporting a growth in mortgage completions, and in some locations prices are now actually starting to rise.

Over the last year we have witnessed changes in the property market, for example, 12 months ago buyers had a high number of options and opportunities available to them which helped to drive the selling price of property down.  Fast forward a year and this is no longer the case in many locations.

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High quality re-sale stock is moving, and moving quickly, which creates demand, and that demand creates an upward price movement. All of a sudden the gap between good re-sale property and high quality new build options is smaller.

The entry level for a new build apartment, in a good location is currently circa 100,000 euro, (approx £71,500.00.)  The new build opportunities on offer right now are with a high level spec and a 10 year build guarantee that makes this option difficult for some to ignore.

New Build Apartment in Villamartin, Southern Costa Blanca – Click on image for details

Whilst at this time the market most definitely favours the buyer, anyone looking to purchase property in Spain should seek advice from an independent lawyer prior to purchasing.  This is to ensure that all obligations of owning a property in Spain are fully understood.  It is also essential for buyers to know how to buy euro in order to maximise their pound sterling’s buying power.

Penthouse Apartment in Ciudad Quesada – Click on the image for details

Your Place in Spain Ltd will always offer the service of a ‘Safe Purchase’ to clients, eliminating any unwanted surprises in the purchase process, and making sure that clients are ‘in the know’ at all times.  Be savvy and be safe.

Rob Lynsdale, Proprietor

Your Place in Spain Ltd

Did you see our feature on Townhouses and Bungalows from across the Costas this week?

A beautiful selection with amazing opportunities – http://eepurl.com/br4zsb

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