Buying in Spain - What to Consider?

Diceicle

SpencerJC wrote: »

Where abouts in Spain would you be looking? They never stop building in certain parts of Spain, there tends to be a lot of demand for new builds compared to 2nd hand. I know people who paid 250K for a nice 2 bed new build and down the road you could pick up something similar for about 100k, just second hand. Granted the former is closer to the beach but still a big difference. This is close to Alicante btw.

Thanks for the reply. I'm still very much at the tyre-kicking phase and getting things straight in my head. However, if I came into money tomorrow I would look in the Costa Blana region - or towns in and around Nerja / Calpe etc.

brisan

https://www.spanishpropertyinsight.com/buying-property-in-spain/costs/#:~:text=The%20tax%20rate%20is%20fixed,valor%20catastral%20of%20the%20property.&text=If%20non%2Dresidents%20rent%20out,and%20pay%20taxes%20on%20it.

Diceicle

krissovo wrote: »

We bought 10 years ago in Puerto Banus, long story short it was great when kids were young now they are a bit older and have their friends network its not our retreat for long summers as they once were.

Also the resort and the area around the property has been over developed and the clientele has gone down hill and these beautiful apartments are starting to get abused and not as well maintained as they could be. We would never retire there now.

We are now looking for an alternative location like Nerja that have local policies that restrict development plus it can be used for skiing in the winter. Early indicators are there is interest in the property and value should hold quite well. Interest is driven by the new work from home employees particularly Nordic based countries.

In terms of tips, get a local solicitor and ensure they are trust worthy. They can arrange local mortgages and fast track purchases. If you plan on letting it out get a good management company and pay a little over the odds for a good one. A cheap management company is a false economy. Visit the property both in season and off season before buying. Sea views And access to a beach hold their value much higher and easier to let. Property management fees add up, if they are low then the upkeep of the area will be maintained using short cuts, things like pool cleaning take a bit of a hit or maintenance of the gardens. Also maintenance fees do rise with inflation and sometimes higher until a new contract is sourced.

Thanks. Good input there.
In relation to Spanish mortgages do you ( or anyone else reading) have insights into how they work? By that I mean, in ireland we can get 3 year fixed for around the 3% mark - but in Germany (for example) you can get a 3 year or less fixed rate for 30 years. How is Spain in that regard?

Diceicle

Pelezico wrote: »

Covid will pass. Forget about it.

That is why I am looking at Oliva Beach. Close to Alicante and Valencia.

Very accessible. Cheap property and fabulous beach.

The town of Denia is very near for days away. I can get a cheap train to Valencia for five euros once I pass 60.

What is not to like? No TV licence, very cheap utility costs and food 40% cheaper than Ireland.

Holidayed in Denia and Valencia a couple of years ago. Lovely places.

DulchieLaois

Town called peniscola which is near Valencia is where I want to visit but it’s best to visit off season where there is nobody around such as October and November and u get apartments for 300 euros a month rent, far cheaper than buying and paying interest

jayjay2010

Interesting thread....I was thinking of posting a similar one!

Also interested in buying in Spain, in the Costa Del Sol, near Benalmedina. Properties there tend to be a bit more expensive I would imagine due to it being rather touristy and close to major airport.

Hoping to buy with a view to use as holiday home/ alternative living maybe in the next few years to spend a few months of the year there. Very affordable monthly repayments even if never rented out.

I think prices will fall over the next 6/12 months so for now just researching areas etc.... but seems to be great value for money!

pinksoir

The expectation is that prices will fall dramatically over the next couple of years. The country has been financially decimated by covid. Land prices in particular are set to fall as they did during the last recession. They only just started going up again in 2016 or so.

joeysoap

Can’t talk about Spain but I have a friend who has a Portuguese property, inheritance rules are much as here ie spouses are exempt as are descendants of owner and most properties are jointly owned. There is a property tax, electricity bills, water bills and gas bills to pay. The last 3 are by direct debit, the property tax is not. There is community costs( pool cleaning and pool water costs make up the bulk but if there are lifts (his apartment block is only 2 stories so there’s none) they have to be serviced and certified yearly. In Portugal the tv licence is added to the electricity bills ( nor dear - around €30 per annum ) water in and water out are cheap under 50c per 1,000 for the first 5,000 liters but go up after that. I have use of his property but with covid even he’s not using it and thinking of selling. As posted previously Nordic buyers seem to be active. He bought when sterling was strong ( he’s from NI ) and will make a profit (ctg is 28% in Portugal and 10% of the selling price is exempt) and the first £11000 of profit is exempt in NI). I was going in September but obviously not now.

krissovo

Diceicle wrote: »

Thanks. Good input there.
In relation to Spanish mortgages do you ( or anyone else reading) have insights into how they work? By that I mean, in ireland we can get 3 year fixed for around the 3% mark - but in Germany (for example) you can get a 3 year or less fixed rate for 30 years. How is Spain in that regard?

My mortgage was fixed at 2.72% for the term which was 15 years so it was quite a high rate at the time. We could have got it much lower if I recall by buying the insurances through the lender and including some other clauses like not being able to overpay or even pay off early. The penalties for early payment were quite severe.

Pelezico

joeysoap wrote: »

Can’t talk about Spain but I have a friend who has a Portuguese property, inheritance rules are much as here ie spouses are exempt as are descendants of owner and most properties are jointly owned. There is a property tax, electricity bills, water bills and gas bills to pay. The last 3 are by direct debit, the property tax is not. There is community costs( pool cleaning and pool water costs make up the bulk but if there are lifts (his apartment block is only 2 stories so there’s none) they have to be serviced and certified yearly. In Portugal the tv licence is added to the electricity bills ( nor dear - around €30 per annum ) water in and water out are cheap under 50c per 1,000 for the first 5,000 liters but go up after that. I have use of his property but with covid even he’s not using it and thinking of selling. As posted previously Nordic buyers seem to be active. He bought when sterling was strong ( he’s from NI ) and will make a profit (ctg is 28% in Portugal and 10% of the selling price is exempt) and the first £11000 of profit is exempt in NI). I was going in September but obviously not now.

To think what we pay for TV licence...listen to George Lee and Joe Duffy pontificate for massive wages.

Spain has no TV licence and utilities are dirt cheap. Healty care system is good too.

Portugal encourages retirees..by having mo income tax...not sure of rules but nice.

I prefer Spain myself.

Harper91

Spanish Eyes wrote: »

Yes I know that.

No way would I buy a property abroad though.

Renting is the way to go.

I was thinking of buying something abroad in a couple of years, but I think your right it's not the way to go, if you buy abroad you are stuck going over there every year,

I would rather rent if I was going for a week or 2 or just go to a hotel for a weekend away is very cheap.

I like going to different places cant see myself going to same place every year will soon get sick of it .

krissovo

Spanish Eyes wrote: »

Yes I know that.

No way would I buy a property abroad though.

Renting is the way to go.

A lot has changed for a lot of employees, I will not have to work in a office again with changes being made since COVID. This make a 2nd home more viable and if my kids were not in school I would be off in a flash to my apartment for the next 3 months.

Del Boy

Spain isn't a winter destination. If you want to rent for part of the year then it's the Canaries. Fuerteventura is cheaper and less developed. But no way would I buy in mainland Spain.....only 6 or 7 months sun. The busiest time of year in the Canaries is Christmas because it's the only spot in EU you'll get heat at that time of year. Easier to rent for a few months in winter too as loads of retired people go out for a few weeks in winter.

Diceicle

Harper91 wrote: »

I was thinking of buying something abroad in a couple of years, but I think your right it's not the way to go, if you buy abroad you are stuck going over there every year,

I would rather rent if I was going for a week or 2 or just go to a hotel for a weekend away is very cheap.

I like going to different places cant see myself going to same place every year will soon get sick of it .

Its not for everyone.
However, to push back on the 'stuck over there every year' argument - in my scenario of taking out a mortgage of ~€100k (lets say over 15 years at 3%) - that gives a monthly repayment of around €690 (€8280 per annum) . If you've bought in a place that can achieve an average rent of €100 a night and rent it for 90 nights over the whole year thats €9000 there. Even if I only rent for 50 or 60 nights - I still only have to cover a small mortgage.

With those numbers its still very possible for us to holiday wherever we like and still pop over to Spain when we feel like it and or when flight prices are positive.

SteelyDanJalapeno

Diceicle wrote: »

Its not for everyone.
However, to push back on the 'stuck over there every year' argument - in my scenario of taking out a mortgage of ~€100k (lets say over 15 years at 3%) - that gives a monthly repayment of around €690 (€8280 per annum) . If you've bought in a place that can achieve an average rent of €100 a night and rent it for 90 nights over the whole year thats €9000 there. Even if I only rent for 50 or 60 nights - I still only have to cover a small mortgage.

With those numbers its still very possible for us to holiday wherever we like and still pop over to Spain when we feel like it and or when flight prices are positive.

Is there no tax due on rentals in Spain?

mikep

pinksoir wrote: »

Another option is to buy a plot of land and then build a prefab house on it. This is what we're going to do and it's becoming really really big over here. You can get an amazing place for less than 100k (finished and including VAT) Something like 150sqm +. Of course you can go smaller too. You can get plots for peanuts if it's not near a major city. 3-4 months for it to be built.

Hi there
Would these be timber frame houses?

What is the planning process like??

I'd be interested in looking at something like that..

Spanish Eyes

Spanish Eyes wrote: »

I'd buy a bolthole in Ireland............

That's what we did, never mad keen on the 14 days in the sun etc so suits us grand. Not for everyone though and if you like the sun, well Ireland :pac:

Baybay

Diceicle wrote: »

~€100k (lets say over 15 years at 3%) - that gives a monthly repayment of around €690 (€8280 per annum) . If you've bought in a place that can achieve an average rent of €100 a night and rent it for 90 nights over the whole year thats €9000 there. Even if I only rent for 50 or 60 nights - I still only have to cover a small mortgage.

Consider also tax obligations, insurance, furnishing, advertising costs, housekeeping logistics, local representation perhaps, maintenance, possible management fees, broken item replacement etc

Diceicle

pinksoir wrote: »

.....

Another option is to buy a plot of land and then build a prefab house on it. This is what we're going to do and it's becoming really really big over here. You can get an amazing place for less than 100k (finished and including VAT) Something like 150sqm +. Of course you can go smaller too. You can get plots for peanuts if it's not near a major city. 3-4 months for it to be built.

....

Thats something I'd not considered before. In relation to getting connected to utilties (water etc) whats the situation there? Is there any major cost involved?

IAmTheReign

Diceicle wrote: »

Its not for everyone.
However, to push back on the 'stuck over there every year' argument - in my scenario of taking out a mortgage of ~€100k (lets say over 15 years at 3%) - that gives a monthly repayment of around €690 (€8280 per annum) . If you've bought in a place that can achieve an average rent of €100 a night and rent it for 90 nights over the whole year thats €9000 there. Even if I only rent for 50 or 60 nights - I still only have to cover a small mortgage.

With those numbers its still very possible for us to holiday wherever we like and still pop over to Spain when we feel like it and or when flight prices are positive.

You really need to consider the fact that the times you'll want to use the house are the same times people will want to rent it. The bulk of those 90 days would have to be between May and August, particularly weekends.

I would seriously suggest visiting anywhere you're thinking of buying in the off season. Apparently the population of Denia doubles during peak season. If you've only ever visited during the summer you'll have a very distorted view of the place.

brisan

Diceicle wrote: »

Its not for everyone.
However, to push back on the 'stuck over there every year' argument - in my scenario of taking out a mortgage of ~€100k (lets say over 15 years at 3%) - that gives a monthly repayment of around €690 (€8280 per annum) . If you've bought in a place that can achieve an average rent of €100 a night and rent it for 90 nights over the whole year thats €9000 there. Even if I only rent for 50 or 60 nights - I still only have to cover a small mortgage.

With those numbers its still very possible for us to holiday wherever we like and still pop over to Spain when we feel like it and or when flight prices are positive.

You do realise there will be a non resident tax on all income earned in Spain
The penalties for tax evasion are severe in Spain

Diceicle

IAmTheReign wrote: »

You really need to consider the fact that the times you'll want to use the house are the same times people will want to rent it. The bulk of those 90 days would have to be between May and August, particularly weekends.

I would seriously suggest visiting anywhere you're thinking of buying in the off season. Apparently the population of Denia doubles during peak season. If you've only ever visited during the summer you'll have a very distorted view of the place.

Yes, thanks. I would be aware that peak-times will coincide with peak-demand. I don't think that would necessarily impact anything - theoretically anyway. I would not intend to spend multiple months there in the near term.

Your second point is something I was mulling over last night - towns like Denia etc - I've never been to them in November or February etc. I can obviously appreciate they're in their glory during the Summer months so wouldn't expect the same experience year-round. How are things in those towns in the depths of low season? Many places close I would assume.

HeidiHeidi

Diceicle wrote: »

Yes, thanks. I would be aware that peak-times will coincide with peak-demand. I don't think that would necessarily impact anything - theoretically anyway. I would not intend to spend multiple months there in the near term.

Your second point is something I was mulling over last night - towns like Denia etc - I've never been to them in November or February etc. I can obviously appreciate they're in their glory during the Summer months so wouldn't expect the same experience year-round. How are things in those towns in the depths of low season? Many places close I would assume.

I've been to Denia and Ibiza about four or five times just before Easter (traditionally the start of the tourism season) and they're like ghost towns!

Interesting, and lovely to see in contrast to the bustling full-on packed tourist season - but seeing that once would be more than enough. (We go for a particular event that happens over the Easter weekend, hence the repeated visits)

Regarding taxes, is there an agreement with Spain regarding double payment of taxes, or would you have to declare the income here as well? (I know you can arrange to pay tax on UK income here, no idea if that's available elsewhere)

Diceicle

HeidiHeidi wrote: »

I've been to Denia and Ibiza about four or five times just before Easter (traditionally the start of the tourism season) and they're like ghost towns!

Interesting, and lovely to see in contrast to the bustling full-on packed tourist season - but seeing that once would be more than enough. (We go for a particular event that happens over the Easter weekend, hence the repeated visits)

Regarding taxes, is there an agreement with Spain regarding double payment of taxes, or would you have to declare the income here as well? (I know you can arrange to pay tax on UK income here, no idea if that's available elsewhere)

Care to take a stab at the % of bars and restaurants that are open in the lower part of the season?
Once I'm further along on this journey taking a trip out in the low-season is something to make a point of doing. Though, again theoretically, I can appreciate that the atmosphere in July will be vastly different to the trip in November.

Eric Cartman

Phishnet wrote: »

Maybe you should also consider if there is an airport near your proposed purchase, and if this is the case, will Irish carriers continue to fly into that particular airport due to reduction in flights because of covid.

this, never ever buy near one of those dinky airports that needs just Ryanair or one other airline to keep it afloat. If there isn't a few operators going to the UK or here from it don't bother.

HeidiHeidi

Diceicle wrote: »

Care to take a stab at the % of bars and restaurants that are open in the lower part of the season?
Once I'm further along on this journey taking a trip out in the low-season is something to make a point of doing. Though, again theoretically, I can appreciate that the atmosphere in July will be vastly different to the trip in November.

I was in Ibiza a few years ago about three weeks before Easter, and from memory it was about 10% or less. The whole place, including Ibiza Old Town, was basically completely shuttered.

The other times we've arrived on the Tuesday or Wednesday of Easter week, so places are beginning to open up, but it's still eerily quiet.

You'd really need to go and take a look see yourself though (we've been busy with preparations for the event so not really concentrating on touristy stuff).

IAmTheReign

Diceicle wrote: »

Yes, thanks. I would be aware that peak-times will coincide with peak-demand. I don't think that would necessarily impact anything - theoretically anyway. I would not intend to spend multiple months there in the near term.

Your second point is something I was mulling over last night - towns like Denia etc - I've never been to them in November or February etc. I can obviously appreciate they're in their glory during the Summer months so wouldn't expect the same experience year-round. How are things in those towns in the depths of low season? Many places close I would assume.

I don't know this town in particular but I've been in a few holiday towns before outside of the regular season and they can be pretty grim. Lots of places close up, and the ones that don't could be half empty most nights

Ush1

Del Boy wrote: »

Spain isn't a winter destination. If you want to rent for part of the year then it's the Canaries. Fuerteventura is cheaper and less developed. But no way would I buy in mainland Spain.....only 6 or 7 months sun. The busiest time of year in the Canaries is Christmas because it's the only spot in EU you'll get heat at that time of year. Easier to rent for a few months in winter too as loads of retired people go out for a few weeks in winter.

I've been in Benalmadena lots of times in November and January and it's lovely, 20 degrees often.

HeidiHeidi

Ush1 wrote: »

I've been in Benalmadena lots of times in November and January and it's lovely, 20 degrees often.

I'd agree with that poster that the only place practically guaranteed sun and warmth all winter is the Canaries (and obv that's not completely guaranteed either!)


As I said before, I go every year to Ibiza and Denia before/at Easter, and we've had some absolutely horrendous weather (ironically, the worst was the year Easter was the latest it could be) and the place is SO not set up for inclement weather, it was just miserable!

Ush1

HeidiHeidi wrote: »

I'd agree with that poster that the only place practically guaranteed sun and warmth all winter is the Canaries (and obv that's not completely guaranteed either!)


As I said before, I go every year to Ibiza and Denia before/at Easter, and we've had some absolutely horrendous weather (ironically, the worst was the year Easter was the latest it could be) and the place is SO not set up for inclement weather, it was just miserable!

I don't mind too much as it's usually warm, at least warmer than Ireland.

My rough plan is to move there for 3 to 4 months every winter and just rent when my kids are older. You'd get a place for very cheap in off season and cost of living is tiny. I could still potentially work remotely as well.