20 Jan The Pros and Cons of Buying a Property in Spain
Buying a property in Spain might seem like the dream, but is it all it’s cracked up to be? Read on to find out more…
If you’re thinking about buying a property abroad, then you’ll no doubt be considering Spain as a possible location. After all, it remains one of the most popular tourist destinations in the world, so why not buy a property there?
Well, before you start looking up your dream villa on the Costa de Sol, or a modern apartment in Barcelona, you need to make sure that you’re fully clued up on what buying a property in Spain entails. It’s not always plain sailing!
That also applies if you’re inheriting a property; wills in Spain may leave a home with your name on it. In this case, you will also need to think carefully before making the decision to keep hold of it. Read on to learn more about the potential benefits and pitfalls that you could experience either way…
Pros of Buying a Property in Spain
Buying Process is Relatively Simple
First thing’s first, the buying process itself is relatively easy to follow, which is especially important if you’ve never invested in property abroad before.
There are no special requirements that need to be fulfilled for someone to buy a property in Spain, and the Spanish government encourage foreign investment in Spanish real estate. That can only be good news for you!
Properties Can be Great Value for Money
Like so many countries in Europe, Spain was hit hard by the global recession, but the housing market is slowly on the rise. Property prices are following suit, which makes now as good a time as any to invest in a Spanish property.
Comparative properties in other European countries may be much more expensive, making Spain an incredibly attractive destination if you’re looking to buy a quality property on a slightly tighter budget. And who doesn’t love a bargain?
Cheap Cost of Living
If you’re buying or inheriting a property in Spain, you won’t need to worry about facing expensive living costs. In fact, you’ll likely experience quite the opposite if you decide to stay put.
Of course, this is all dependent on where you choose to live. As is the case in pretty much every country, living costs will vary from location to location. So, why not do a little bit of digging and see how much it’s going to cost to get the essentials?
High Seasonal Rental Income
If the property in question isn’t somewhere you intend to live but, rather, is one you want to rent out, then you’ll probably be able to benefit from the high seasonal rental costs that exist in Spain.
That’s especially true in the tourist-heavy parts of the country, where you can afford to raise rental costs in line with the surging demand that you’ll experience in Spring and Summer. Sounds good, right?
There’s a Wide Variety of Locations on Offer
Spain isn’t just golden beaches (though there are plenty of them). There’s a lot of variety on offer here, which means you have plenty of options at your disposal when it comes to buying a property.
There are glorious coastal regions, bustling cities and breath-taking mountain ranges, all of which have something different to offer. That’s even true if you end up inheriting a property that isn’t to your tastes – it’s bound to appeal to someone.
Cons of Buying a Property in Spain
You are Taxed on Your Worldwide Income
If you’re thinking about making a move to Spain on the back of buying or inheriting a property, then you’ll need to take tax into consideration.
Yes, taxes are going to apply wherever you choose to buy a property, but in Spain you will have to deal with being taxed on your worldwide income. That means your annual income tax in Spain will be affected by your income in other countries. Not great if you’re going back and forth between countries.
Real Estate Prices Vary Across Spain
As was mentioned earlier, variety is not something you’re going to have to worry about in Spain. The varying real estate prices? Now that is something, you’ll have to pay close attention to.
If you want to buy a property in Madrid or Barcelona, then you’re going to have to be prepared to dig deep into your pockets. Compromises exist in the form of smaller towns and villages, but that’s not going to be for everyone.
Additional Costs to Buying a Property
If you’re buying a property, or even inheriting one, then there are going to be plenty of hefty additional costs to worry about.
That includes a 10 percent commission fee for an estate agent, a 7 percent Stamp Duty fee and a Capital Gains Tax to pay when you sell a property. That’s going to quickly add up if you’re not prepared! So, if you’re eyeing up a property in Spain, do be careful and make sure that the additional costs aren’t going to burn a hole in your pocket.
The Job Market Is Scarce
If you’re thinking about moving to Spain off the back of buying or investing in a property, and are yet to retire, you’ll likely need a job to pay for your living costs.
Unfortunately, that’s much easier said than done. Unemployment is high in Spain, which means if you’re looking for a job, you might find yourself struggling. That’s especially true if you aren’t fluent in Spanish!
Are You Looking to Buy a Property in Spain?
And there you have it! As this post demonstrates, inheriting or buying a property in Spain can be an incredibly exciting venture, but it does come with its potential pitfalls if you don’t make careful preparations.
Have you previously bought a property in Spain? Or perhaps you’ve inherited a Spanish property through a Will? Feel free to leave a comment below and share your own tips to help out those who are still sitting on the fence.