| Buying
a Home in Spain |
| By David
Hampshire |
| If you
want guaranteed sunshine, miles of glorious sandy beaches, excellent
food, an abundant choice of entertainment, and a wide choice of homes at
affordable prices, then you will find Spain hard to beat. Although the
vast majority of holiday makers (and residents) come to Spain to
recline on a beach, there’s much more to the country than the costas and
its islands.
Spain has
Variety
Spain offers
infinite variety with something for everyone, including magnificent beaches
for sun worshippers and spectacular unspoiled countryside for magnificent
vistas and peaceful strolling. There are also an abundance
of mountains and seas for sports fans and a vibrant night-life for the
jet set. |
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| For those
who are comfortable living in cities, there are bustling sophisticated
metropolises. For those with gourmet tastes, there are superb wines
and fabulous cuisine. There is a wealth of art, culture and serious
music for art lovers and numerous festivals and fiestas for inveterate
party-goers. And, there is tranquillity for the stressed.
Not for nothing
do the Spanish claim to have “Everything Under The Sun!” When buying
a home in Spain you aren’t simply buying a home but a lifestyle, and as
a location for a holiday, retirement or permanent home, Spain has few equals,
particularly if you’re seeking year-round sunshine.
Why Buy
in Spain
There are many
excellent reasons for buying a home in Spain, although it’s important not
to be under any illusions about what you can expect from a home there.
To get a firm handle on what you expect, ask yourself exactly why you want
to buy a home in Spain.
For example,
are you seeking a holiday or a retirement home. |
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| The Costa
Blanca and Costa del Sol have the highest percentage of retired persons
in the world, when both Spaniards and foreigners are included. If you’re
seeking a second home, will it be mainly used for long weekends or for
lengthier stays? Do you plan to rent all or a portion of it to offset mortgage
and operations costs? If so, how important is the property income? Are
you primarily looking for a sound investment? Do you plan to work or start
a business in Spain? These are questions that need answers no matter where
you purchase, but especially in Spain because of the variety of choices
Spain has to offer.
Often buyers
have a variety of reasons for buying a home in Spain. For example,
many people buy a holiday home with an idea of living there permanently
or semi-permanently after they retire. If this is the case, there are many
more factors to take into account than if you were simply buying a holiday
home that you |
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| will occupy
for just a few weeks a year. If, on the other hand, you plan to work or
start a business in Spain, you will be faced with a whole different set
of criteria. You may be thinking of buying a home in Spain and commuting
to another European country to work. Many people are doing just that
because Spain has a lot to offer.
Don’t Stretch
Your Financial Resources
Can you really
afford to buy a home in Spain? What of the future? Is your income secure
and protected against inflation and currency fluctuations? In the ’80s,
many foreigners purchased holiday homes in Spain by taking out second mortgages
on their family homes abroad and stretching their financial resources to
the limits.
Not surprisingly,
when the recession struck in the early ’90s many people had their homes
repossessed or were forced to sell at a huge loss when they were unable
to maintain the mortgage payments. Buying a home abroad can be a good,
long-term investment, although it’s possible to get your fingers burnt
in the occasional volatile property market in many countries, including
Spain. |
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| There’s
A Stable Property Market In Most Of Spain
Property values
in Spain generally increase at an average of less than 5 per cent a year
or in line with inflation (with no increase in real terms), although
in some fashionable resorts and developments prices rise faster than average,
which is usually reflected in much higher purchase prices. For example,
prices increased by up to 25 per cent in some parts of the Costa del Sol
in the last few years. There’s a stable property market in most of Spain,
barring recessions, and this may act as a discouragement to speculators
wishing to make a fast buck. This may be particularly important when you
consider that capital gains tax can wipe out much of the profit made on
the sale of a home, especially a second home. You also need to recover
the costs associated with buying a home in Spain when you sell. You shouldn’t
expect to make a quick profit when buying property in Spain, but should
look upon it as an investment in your family’s future happiness, rather
than merely in financial terms. |
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| The Benefits
Outweigh Drawbacks
There are both
advantages and disadvantages to buying a home in Spain, although for most
people the benefits far outweigh any drawbacks. Among the many advantages
are guaranteed sunshine and comfortable Mediterranean temperatures.
Some areas of Spain, especially the resort areas, are some of the least
polluted areas of the world.
There’s good
value for your money, and Spain is easy and inexpensive to get to, at least
for most western Europeans. There are great rental possibilities and good
local tradesmen and services. There are fine foods and wines at reasonable
prices and a relatively low cost of living. There’s the slow, relaxed
pace of life; the friendliness and warmth of the Spanish people; the dramatic,
rugged beauty of Spain on your doorstep; and, last but not least, a superb
quality of life.
A Few Disadvantages
Naturally,
there are also a few disadvantages, not the least of which are the relatively
high purchase costs associated with buying property. There could also be
unexpected renovation and restoration costs if you don’t do your homework.
Check with local officials to see if there’s a high rate of burglary and
housebreaking that are present in some areas. Be prepared for overcrowding
in popular tourist areas during the peak summer season and traffic congestion
and pollution in many towns and cities. Beware also of a number of admittedly
small taxes for non-resident homeowners. The phrase, “In Spain,
the rain falls mainly on the plane,” can be all too true when occasional
draughts cause severe water shortages in some regions, particularly during
the summer. Finally, don’t overlook the expense of getting to and from
Spain if you own a holiday home, and you don’t live in a nearby country
or a country with good air connections.
Get Familiar
with the Area
Unless you
know exactly what you’re looking for and where, it’s advisable to rent
a property for a period until you’re more familiar with an area. As when
making all major financial decisions, it’s never advisable to be too hasty.
Many people make expensive (even catastrophic) errors when buying
homes in Spain, usually because they do insufficient research and are in
too much of a hurry, often setting themselves ridiculous deadlines such
as buying a home during a long weekend break or a week’s holiday. Not surprisingly,
most people wouldn’t dream of acting so rashly when buying a property in
their home country! It isn’t uncommon for buyers to regret their decision
after some time and wish they had purchased a different property in a different
region.
Do your
Research
Before deciding
to buy a home in Spain, it’s advisable to do extensive research on buying.
Two good resources are, Buying a Home in Spain and Living and Working in
Spain, both written by the author of this article and published by Survival
Books. It also helps to study specialist property magazines and to visit
overseas property exhibitions. Bear in mind that the cost of investing
in a few books or magazines is tiny compared to the expense of making a
big mistake. |
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