Owning Property in Spain

As the Brexit negotiations are nearing their conclusions, it is currently looking like there might not be a deal between Britain and the EU (as of 10th Dec 2020). Consequently, many Brits who currently own property, or are thinking of purchasing property, are understandably concerned as to how the situation will directly affect them. Here, we try and allay some of the concerns and explain how the details will work. Fortunately, Britain and Spain have already issued some guarantees to its citizens that currently reside in each other’s countries, so this article is more concerned with holiday home owners and tourists.

Will I still be able to buy property in Spain?

As the current legislature stands, Spain does not impose any requirements to be a national of an EU country in order to buy property in Spain. Indeed, there are very few restrictions on ANY country in the world and therefore there should be no affect in this regard when Brexit comes to pass.

Will there be additional purchase taxes for British after Brexit?

No, the taxes due upon purchase are the same for any buyer, regardless of nationality and this will almost certainly remain the same after Brexit. The British are one of the biggest market segments for buying Spanish property, so it is extremely unlikely that the Spanish government will do anything to undermine this market.

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Travelling to Spain - guide for those who want to visit Spain

In these unprecedented times of the COVID virus situation, the rules for each particular country and the regulations on travel are changing frequently. Here we are trying to keep our clients updated on the present situation and will post regular updates as the situation changes. We concentrate more on Andalucia, where we are based, so some of this information is different in other regions of Spain

 

What are the new rules in Spain?

At present (27th November 2020) there is no National lockdown in Spain. However, last month the government declared a second “State of Emergency” which allows them to impose such restrictions if they deem them necessary and allows local authorities the power to legally enforce these restrictions. The following is a summary of the regulations and will be in place until 10th December when another review will be made :

  1. A national curfew (everywhere except the Canary Islands) which requires everyone to be at home between 11pm – 6am. Regional authorities are allowed to adjust these times by one hour, either side of the limits.
  2. Nightlife activities are severely restricted – bars, cafés & restaurants are obliged to close at 6pm
  3. Wearing of Face masks are obligatory at all times – this now includes when doing sport or even sitting in a café / restaurant when not actually eating or drinking.
  4. All movement between municipalities is restricted, so that you can only enter or leave them with justified cause. Justified causes include work (you need to have written authorization from your employer to show the police should you be stopped), caring for a person with ill health or attending an emergency.
  5. Social gatherings are limited to 6 people unless living together
travel restrictions 2020

What does this mean for visiting tourists?

Effectively this means that if you are staying in for example Marbella, you are obliged to stay within Marbella’s municipal limits and cannot travel to even the neighbouring municipalities such as Estepona without valid reason. In the case of a tourist, about the only valid reason that would be accepted is visiting a hospital for health reasons.

 

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the buyers has new aspect

The luxury market is performing strongly with multiple sales of villas with large price tickets, the buyers has some new aspects. We feel this is partly as a result of the COVID situation. People have become aware that life is both short and precious, and this in turn has inspired people to enjoy a better quality of life, the buyers has new aspect

holiday home segment

On the other end of the scale, the value market and inexpensive holiday home segment has also performed strongly. Although not such a prevalent market in Marbella, agents from other areas of the Costa del Sol have also reported a flurry of activity since the quarantine restrictions were eased.

 

Some segments are more active - House with garden and pool

Quality of life

 Although not sold by our company, we are aware of the sales of at least six properties with price tags above 10M€ having been sold in the last months. Some of these have been on the market for several years, so it came as somewhat of a surprise to see so many sell in such a short space of time. Some market segments seem to be actually more active since our emergence from quarantine. We have more request for private houses with garden and pool, for villas with larger plots among the buyers and the potential tenants as well. The value of the quality of life is higher than before.

Boom - After the quarantine

About the only notable negative impact on the property market has been that of bank lending.  

It is not so much the interest levels have changed with any significance but more that the banks are lending less and asking for more security. One client of ours who had purchased an apartment off-plan was told at the time of purchase that the bank would offer to finance 70% of his purchase cost.  

After the quarantine ended and he was preparing to sign for his new property, the bank told him that due to the COVID situation, they had reduced their offer to only 60% finance. Travel restrictions are also stifling the market from regaining its previous strength. We have several clients that are eager to come here to buy a property but are simply unable to because of travel or quarantine restrictions. Hopefully, this will soon end.

 

 

 

Healthy lifestyle and high level of services

Marbella, with its wonderful climate, open green areas and advanced infrastructure is an obvious choice to enable this. From talking to our recent clients about why they are looking to purchase a property here, many have cited Marbella as a more agreeable place to be confined in the event of a second wave. Others have taken the decision to relocate here permanently for similar reasons. 

The healthy lifestyle coupled with a high level of services and communications makes Marbella an ideal location for many businessmen. 

One thing COVID has taught us is, that it is possible to continue working while being confined and we see this from recent client requirements. Almost all are now searching for homes that offer office space and fiber optic internet connections. 

Worry about the second wave

Of course we are not out of the woods yet and the recent surge in new cases gives all of us cause to worry, but life goes on and we have to move with it. Whatever, your opinion on the COVID situation, most of us now accept that it is not going anywhere soon and we have to learn how to live with it. I think most governments now realise that having a second lockdown would spell disaster for their economy and has to be avoided at all costs. I think the new aspect of the buyers is a trend, that will continue in the future

 

Regan Berger

Managing Director
Move2Marbella

The beginning of 2020 saw a buoyant property market in Marbella and great optimism for the year ahead. All segments of the market were performing well and most professional real estate agents had a pipeline of prospective clients in the offing. Move2Marbella enjoyed this positive start by closing a deal on the sale of a luxury villa in one of Marbella’s premier gated community with a price tag north of 3M€.

Thank the Lord we did, as only a few short weeks later, COVID-19 arrived in Europe and forced us all into a period of confinement and an inability to work (especially for those of us in the property business).  This obviously had an immediate impact on the property market and sales grind almost to a halt immediately. After all, if you cannot show a property to a potential buyer or speak with an owner and evaluate their property, there is little one can do to create business. Thankfully, in the previous year we had invested quite heavily into new technology and we have a decent inventory of properties where we had made a Virtual Tour. This worked remarkably well during the quarantine and as a result we actually managed to close four sales, without ever having met the clients.

 
Admittedly, this is significantly down on what our normal sales figures would be like at that time of year, but we were very happy that we had at least managed to generate some income for the business.  Of course, this was also possible by the fact that people were spending far more leisure time on their computers, phones and tablets than they normally would!! However, we, along with many of our colleagues in the real estate business, have realised how important it is to utilise new technologies in the marketing and promotion of our portfolios. I suspect that many real estate professionals will invest even more time and effort into Video and Virtual Tours as a result of the COVID-19 situation.

The impact of the quarantine and subsequent travel restrictions on the property market was significant, especially in Marbella that has a much higher percentage of foreign buyers than other areas of Spain. Property purchases in the second quarter declined to 8.000, down from 15.000 in the first quarter (source: National Register of Property Statistics)

 

 

So, as the restrictions began to ease, we eagerly returned to work to try and regenerate the business that we were enjoying before the virus hit us.  There was much speculation, both amongst clients and industry professionals about the property market and how it has been impacted by the quarantine. Of course, there was the “doom & gloomers” who feared another crash in the economy and subsequent fall in the property market.

Likewise, many investors have liked to use this as a way to leverage a better price on the purchase of an asset. However, although it may be early in the day to venture this opinion, it seems that not only has this not happened but there has actually been an increase in enquiries. This may be down to the fact of enforced confinement for 3 months and are simply the same clients that were originally intending to visit earlier in the year. Whatever, the reason, the actual result has been a gradual return to normality. The dreaded “Crash” has not materialized and prices have not varied from what they were pre-COVID-19.