If this is the year that you plan on making your move to Spain it is important that you are up-to-date on the latest goings-on of the property market. Read on for some market insights from Sally Veall of the Spain Buying Guide who has outlined some need-to-know trends that will help you when you begin the search for property for sale and apartments to rent in Spain.
Unfortunately for Spanish property owners, 2013 opens with gloomy news. Buyers however will be spoilt for choice and will benefit from low prices across the board. The Spanish government has introduced new laws almost every day, some designed to encourage property sales, others designed to fill the ailing state coffers. All in all there are mixed messages related to the property market here, but it could be an excellent time to buy your home in Spain, where at least the sun continues to shine.
The good news for people seeking new Spanish mortgages is that some banks are lending again and the Euribor (the rate on which mortgages are based) is at its lowest level ever. This is unlikely to affect existing property owners as most mortgages have a collar which is well above the current Euribor rate. Some Spanish banks are offering fixed rate mortgages for the first time.
On the other hand, the Government has increased the IVA (VAT) on sales of new property from a low 4 per cent to 10 per cent, which will add somewhat to the purchase cost. They have also introduced a ban on cash transactions of over €2500 (approx. £2,030) when professionals are involved, so this will also affect house purchases in an effort to stop “black money” changing hands. This rises to €15,000 (approx. £12,180) for non-residents, however, providing they can prove they are domiciled outside Spain.
There is talk that the government will introduce an incentive to purchase property for those who are outside the EU by offering “easy access residency permits” for property costing over €160,000 (approx. £130,000). This will mainly affect Russians, Chinese and Moroccans, all of whom are keen to invest in the Spanish property market while prices are low. However, to implement this, the EU must agree and some countries apparently do not.
High-end property is showing some signs of recovery. Knight Frank, one of the main upmarket agencies, has reported that during 2012, they received more enquiries from foreigners than in the previous year. The weak Euro for much of 2012 encouraged many sales to those outside the Eurozone, however they also report a big increase in purchases by Scandinavians and Belgians. The most popular areas are the Costa Brava and Costa del Sol.
Another measure which will encourage property investment is the abolishment of the 3 per cent tax on revenue earned by foreign companies that own property in Spain, but this does not apply to companies based in tax havens. It will mean a large saving each year, for example a saving of €30,000 on properties worth €1million.
Spain is introducing Energy Certification for all properties and this will need to be shown when selling. The system is similar to energy classification for white goods and an expert will be required to come and survey the property, at a cost of between €350-550 (approx.£284-£447).
The tourism industry in Spain is growing which in principle is good news for those who let their property on a seasonal basis. However, there are new requirements coming in which will see licences needed to let such property and owners will need to provide authorities with information about each person renting the property.
All of this means that there will be a lot of paperwork to be done, certificates to be supplied and some additional costs for the property owner.
The message seems to be that the low property prices are encouraging buyers from all over the world, however some of the measures introduced by the government are preventing more sales at a time when Spain needs to see a return to a more buoyant property market. It is nevertheless a good moment to consider buying in Spain, providing of course, you employ a solicitor and have done some serious research. There are all types of property available, from large villas to village houses and, despite cutbacks and new laws, Spain is still a desirable destination for people seeking holiday homes or a new life in the sun.
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