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Yen,
Thanks for the reply, sorry it has take a while to get back to you.
I am a bit reluctant to say it but there seems to be a bit of a problem in Spain at present, the regional councils are basically bankrupt and many of the Banks are in financial dire straights and they seem to be clawing in money where ever they can find it, which unfortunately seems to be from non Spanish property owners and investors. Interestingly enough since we launched our site in November 2012 the majority of agencies uploading properties to our site seem to be British owned agents selling Spanish property and you can see how the prices have dropped over the last few year from expats wishing to sell up.
There are many bargains to be had and the holiday rental market is still strong, so for example you could buy studio flat in let's say Benalmadena on the Costa del Sol for as little as 60 – 70,000 Euros and expect to rent it out for 500 pounds a week sterling during the summer period (approximately 5 months) and 250 a week in the winter which is what many people do, but the top end of the market is where some of the biggest savings are available.
I saw a 3 bed house with pool advertised a few weeks ago for 195,000 euros which two years ago was on the market for 450,000 euros. However you would need to make doubly sure before handing over any money that you have a reputable solicitor and agent confirm in writing that you would not be paying purchase tax (10%) on the original valuation of 450,000.
Mortgages are next to impossible to get unless you want to borrow less than 50% of the total purchase price and due to the amount of illegal building that has taken place over the years, it is important to check that any property is mortgagable. If you do rent the property out legally, you would be liable to be taxed on the revenue you receive.
As for the Chinese and Russians. It seem Spain realizes that China is now a world leader when it comes to economic growth and they have offered automatic residencia to any Chinese or Russians who invest 160,000 euros or more in the country, however I don't believe anybody has taken them up on this offer as yet due to the multiple restrictions which have been applied to that offer.
Regards
Scott
My website was launched in November 2012 after a year of research and hard work, business is building slowly but that is because our marketing campaign will begin in earnest in 2013.
Main things to accomplish:
Contact 75,000 real estate agents worldwide, personally in January and February
Get in the studio to start filming the TV adverts in March
Hit 100,000 visits to our our website by June.
Not much to ask surely.
Merry Christmas and a Happy New year
Regards
Scott
As someone who lived in Spain for 6 years until earlier this year (2012) and who is the Marketing director for an online property advertising company which seems to be attracting a lot of listings from foreign run real estate agents in Spain. My advice would be this.
Think very very carefully, there appears to be a lot of bargains on the market and it is true the prices have dropped considerably, however the price you see isn't the one you pay. You must add 10% purchase tax to the price and be warned that 10% is calculated on what the banks valued the property at 6 years ago so you may get a bargain at 10,000 euros only to find you are required to pay 25,000 euros purchase tax. Depending where the property is you may be required to pay a monthly community charge whether you are living in it or not, you will be required to pay tax on the property every year and at present Spanish IVA (vat) stands at 21% with tax at 26%.
If you wish to buy a development project be warned the red tape and license fees can be a nightmare and expensive, for example forget structural work, even if you want to change your kitchen you will be required to obtain permission from your local town hall and will need to pay for the privilege.
Many foreign buyers have found it impossible to cope with the red tape and meet repayments and many properties have been on the market for up to 4 years with some people just locking up and handing back the keys.
I personally have heard so many horror sorties over the last 5 years that I am glad I stuck to renting and kept my property in the UK. That said yes the life style is a good one, so I would suggest before taking the plunge you take an extended break and rent in Spain for a minimum of a year before even considering buying.
Hope this doesn't put you off but does open your eyes a bit.
Cheers
