Table of Contents:
- How is the Spanish Housing Market Holding on?
- Is It Wise to Invest in Spanish Holiday Villas?
- What are Spanish Real Estate Taxes?
- Is it Possible to Acquire Spanish Real Estate for less than £50,000?
How is the Spanish Housing Market Holding on?
According to the Spanish government, the economy should rebound by at least 7.2% and so should the Spanish housing market. That is due to the fact that the European Union has been doing as much as possible to save household income and help people survive the crisis. All countries have learnt from the impact of the 2008 crisis. The impact was so severe that millions of people lost their homes and jobs.
This time, countries wanted to handle the pandemic differently to keep the economy stable as much as possible. They did this by giving inhabitants and companies stimulus checks so that they can keep consuming goods and services with the goal of keeping the economy going. The housing market took a bit of a dip but still persevered as the price of houses in Spain are now 0.9% higher than last year. How is it possible when experts predicted that the opposite would happen?
As a crisis is usually a time in which uncertainty is at its peak, risk averse investors hedged against the possibility of losing money by pulling out of scheduled deals. As a result, a lot of housing projects are currently left unfinished. In 2019, 106,000 houses were complete while only 66,000 in 2020. As people were not comfortable with the idea of investing during covid, a lot of Spanish people decided to start renting.
Idealista has reported an 80% increase in rental listings with more than 1,0000 rooms available in Madrid alone. Consequently, homeowners are increasing their revenues by turning their empty Spanish property into profitable businesses. New trends in Spanish housing have also been observed as people are now looking to live outside of crowded cities. The demand for Spanish real estate outside of the city-center has increased by 30% whereas the demand for inner-city apartments has dropped by 14%. Farmhouses, beach houses, villas and rustic houses are now the new trend and will experience an increase in pricing. As soon as people get vaccinated, Spanish real estate will see its prices increase to levels higher than pre-covid numbers.
Is it Wise to Invest in Spanish Holiday Villas?
In our opinion, it is always a good idea to invest into Spanish holiday villas.
The best would be to have it listed on house renting websites such as Airbnb so that you can have people occupy it and charge them for it. If you happen to own a Spanish holiday villa near the beach, it is guaranteed that your holiday accommodation would be booked, giving you a high return on investment. In 2018 alone, there were about 80 million tourists in Spain. Clearly, these people need a place to stay at and your future home could be it.
What are Spanish Property Taxes?
Spanish property taxes are not simple. As soon as you purchase your home, you will have to pay taxes on it ranging between 8% to 11.5% depending on if the property is newly built or pre-owned. One important thing to know is that foreigners can buy houses as well but need to get a NIE number before doing so.
When selling a home in Spain, you will need to pay a Capital Gains tax and a Plusvalia. The payment of Capital Gains Tax is between 19% and 24% and Plusvalia would be a percentage of the sale. What makes Spanish Property taxes a bit complicated is the fact that they vary depending on your status. If you are a non-resident from the EU, you will have to pay a Capital gains tax of 19% whereas if you are a non-resident from other countries, the tax burden will be 24%. However, if you happen to be a resident, you could benefit from tax relief if you spent at least three years living in the house.
Last but not least, there is an additional Spanish Property tax which is paid yearly. The tax percentage varies between 0.4% and 1.1% depending on the region you will be living in.
Is it Possible to Acquire Spanish Real Estate for less than £50,000?
Indeed, the price of Spanish housing is quite low compared to the one of other countries such as the UK or France. However, it is quite difficult to encounter Spanish property at the beach for less than £50,000. Spanish real estate that has such prices are usually pieces of land or places that need months of work before you could consider moving in. Fortunately, there is a new company on the market that allows people to buy houses for tickets at a price of £2.
This company is named Cloverhut and is dedicated to changing people’s life by making them homeowners. Cloverhut is a startup that gives people the opportunity to own a Spanish property on the coast. The company organizes raffles in which participants can win a house on the coast of Spain. All you have to do is buy tickets at a price of £2 to get the chance to win the house. The process is 100% legal as it is supervised by a notary and the company as well as the homeowners possess licenses and documents as laid down by the Gambling Act of 2005. There are no strings attached and taxes will be covered by the company. As soon as you get the keys to your new house, you will be free to either live in it or rent it as a Spanish holiday house on Airbnb.
At the moment, the sister company of Cloverhut,Sesortea, is already the market leader in Spain with more than 50,000 elated customers.
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