With the continuing strong performance of the Spanish market and the optimistic forecast for the coming year, now is the perfect time to consider investing in property in Spain.
In the last three years, the Spanish residential property market has experienced a consistent period of growth. 2018 saw house prices in the country increase by 6.49 per cent, the most significant annual rise since 2006. Demand has continued to rise sharply, primarily driven by international buyers who have chosen to buy properties in popular coastal towns and cities such as Barcelona. At the same time, the construction of new properties in Spain is also on the rise with the area and number of residential building permits increasing by nearly 10 per cent.
In 2019, sales of residential properties are expected to increase from around 500,000 last year to between 625,000 and 650,000. Across the country, prices are projected to increase by between 5 per cent and 7 per cent.
The Spanish property investment lawyers at BCP provide a high-level, comprehensive service for all types of property investment transactions including acquisitions and disposals, conditional contracts, financing and asset management. We provide support for a range of clients, from private individuals to publicly listed or private companies based in the UK and overseas.
Additionally, we can provide support and guidance on commercial property transactions across Spain and the Spanish islands. Our lawyers can work closely with your other professional advisors, taking a strategic and proactive approach to achieve the best possible result for you. Whatever your commercial objectives, speak to a member of our skilled and knowledgeable property team today.
What do I Need to Consider when Investing in Property in Spain?
You will need to factor in transaction costs when purchasing property; however, these are moderate in Spain. Full transaction costs are generally between 9.5 and 15 per cent, including Property Transfer Tax which varies between regions and is usually around 6 to 10 per cent. Real estate agents will usually charge commission of between 2.5 and 3 per cent.
Property taxes in Spain are considered high when compared with other European countries. Rental income is subject to a flat tax rate of 19 per cent, and there is a special annual tax levied on the value of property owned by non-residents at 3 per cent. Capital gains tax realised by non-residents is charged at 19 per cent.
If you are considering renting out your property, the law in Spain is considered to be heavily focused on the rights of the tenant. While landlords and tenants are free to set the rent between themselves, rent increases are tied to the Consumer Price Index and can only take place once a year. Tenants are guaranteed tenure for five years, and the courts can be slow in resolving tenant eviction cases. Given these tight regulations and procedures, our Spanish property lawyers are on hand to guide you through the process to ensure your property investment in Spain runs smoothly.
Contact our English-Speaking Spanish Property Lawyers in London and Spain
If you are considering investing in property in Spain, call our expert Spanish lawyers today on +44 (0)207 936 9072 (UK) or +34 952 862 227 (Spain), or complete our online enquiry form, and we will be in touch.