Can you picture yourself living in Spain, sipping wine and eating tapas on your balcony? Listening and dancing to flamenco music on the weekends? Enjoying afternoon siestas?
Did you know you could do that in your own home in Spain?
Nearly 20% of all property buyers in Spain are foreigners!
If you have ever dreamed of owning real estate in Spain but wondered if you could make it happen, then continue reading to learn more about investing in the Spanish real estate market.
Real Estate in Spain
Home sales are increasing in Spain. This is because of the growing Spanish economy, increased rental prices, and more foreigners buying homes there.
Foreigners can buy and sell property in Spain without any limits. They make up almost 20% of the investment housing owners there. Foreigners can buy and sell property in Spain without any limits. They make up almost 20% of the investment housing owners there.
International buyers from Britain, France, Germany, and Russia are finding great opportunities in the Spanish market.
The Spanish housing marking remains upbeat, despite the challenges seen around the world in 2020. Housing costs rose by 0.10% in the second quarter of 2020.
Mortgages in Spain
The market is up because the mortgage requirements becoming easier.
Non-residents are able to get the same mortgages under the same as citizens do. The mortgage can cover up to 80% of the cost of a first home and between 60-70% of a second property.
Mortgages can be taken out for a minimum of five years, up to the traditional 30-year maximum. One thing to note is that the mortgage must be paid by the time the person is 75.
You need to provide at least a 20% down payment and have an additional 15% on hand for the taxes, lawyers’ fees, etc. Spain is unique in that the down payment is paid directly to the seller. It does not go into a separate escrow account.
Property Taxes in Spain
Non-residents who own property in Spain are subject to three different taxes. All homeowners have a 25% tax on gross rental income and a capital gains. Everyone must pay a property tax, but non-residents also pay an additional 3% Non-resident Property Tax.
Spanish Real Estate in Major Cities
Low prices have made real estate in Spain attractive but is it a good opportunity?
Absolutely! Spain is the perfect place for investing in property, offering some of the highest rental yields in Europe.
Here is a breakdown of some of the real estate benefits in some of the more popular cities in Spain.
Valencia Spain Real Estate
Rental prices and property sales are soaring in Valencia, mostly due to foreign demand. Over 35% of the residents here are from other countries, seeking out the Spanish Mediterranean lifestyle.
Malaga Spain Real Estate
A popular holiday destination, Málaga is perfect for those wanting to retire. Housing sales increased by 31% in 2019, and many believe they will continue to rise. Entry prices are still reasonable with apartments in Málaga still available under EUR 175,000. Rental prices have increased by 4% here in 2019.
Madrid and Barcelona Spain Real Estate
The interest in luxury properties continues to grow in both Madrid and Barcelona and they offer rental yields near 4.5%—some of the highest for European cities.
The rents between the two cities are similar with Barcelona having only a slight edge over Madrid. A 50 sq m apartment in Madrid will rent for EUR 950-1,000. A larger 120 sq m apartment goes for EUR 1,750-2,500.
Green Real Estate in Spain
A growing market in Spain is the green real estate market. People are buying properties with energy-saving and sustainable features that meet the EU’s regulatory agenda.
Sustainable property is a safe investment. It appeals to potential renters and increases the value for future sales. It’s also cost-effective, adding a lot of value for minimal extra renovation or development costs.
Spain’s Golden Visa
Spain is one of a number of European countries that offer a “golden visa” or residency by investment program.
Non-EU residents making a real estate investment in Spain (greater than or equal to EUR 500,000) are able to obtain a residence permit.
Where to Find Real Estate to Purchase
With the growth of foreign buyers in the Spanish real estate market, more websites and estate agents are available in various languages.
If you’re interested in exploring properties in Spain, search on Right Casa Estates to see what is available.
How to Buy Property in Spain
The process of buying real estate in Spain is similar to other countries.
The buyer makes an offer on the property, usually to the seller’s agent. Once that’s accepted, the buyer pays a 10% deposit and signs a contrato privado de compravento (preliminary contract) along with the seller.
Once the mortgage is arranged, the buyer and seller sign the escritura de compravento (contract of sale) and get it notarized. At this point, the buyer pays the full sale prices, taxes, and any other costs due.
If there are any debts (mortgage, property taxes, etc) on the property they are transferred to the new owners. Therefore, it’s important for the buyer to do their due diligence and confirm if there are any debts associated with the property before they finalize the sale.
Find Your New Home in Spain
Real estate professionals consider Spain a “Market to Watch”. With its low prices, high yields, and friendly buying opportunities, real estate in Spain is a growing investment market.
Explore other articles on our site to learn more about real estate investments.