A Guide to Property Investment in Spain

With any investment, doing your homework is often the key to success. Buying property abroad is no different and, for those who wish to purchase a property in Spain, this guide will help you get a handle on some of the dos and don’ts of Spanish property investment.

Why Spain?

For many, the global economic crisis was a disaster that they would sooner forget. Property markets across the globe were hit dramatically and many have struggled to make any gains at all since the storm hit back in late 2007. However, some analysts now believe that many of the markets that suffered through those dark years have now bottomed out and they are starting to represent great value for those who are willing to invest again.

tossa de mar spain

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Spain is one such market. Property prices there have been adversely affected since 2007, but things are starting to look rosy once more – especially at the higher end of the market. Spain is also well known to us Brits, and the familiarity that we have with the country gives us a sense of security that we simply wouldn’t have if we chose to invest abroad elsewhere.

The Spanish government has also recently made amendments to its so-called ‘golden visa’ scheme that should make the opportunity more straightforward and accessible for non-EU investors to gain residency. The scheme – which has been slow to take off since its inception back in January 2013 – has now been simplified and it is hoped that overseas investors will be tempted back by the offer, fueling growth once again in the housing market there.

benidorm spain

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How the market stands currently

Property in Spain has already been seeing the first shoots of recovery over the last 12 months or so. Annual price growth to June 2015 was reported at 5.12%, largely thanks to overseas investment in the luxury property market.

However, overall property transactions have also increased by 7.9% across the same period, which underlines the hope that the Spanish property market is indeed on the up.

Average house prices across the entire country are down by 29% on their pre-bubble levels, so the room for growth here is extraordinary. Many experts are strongly advising that now is the time to get back into the Spanish market as demand is expected to rise sharply again over the coming months and years.

spanish houses

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Buying a property in Spain for investment purposes

Now that we have an overview on the current situation in Spain, it’s time to dig a little deeper into how best to go about acquiring a property there. While each individual’s circumstances will be different, there are certain things that everyone who wishes to invest in property abroad will need to take heed of. Let’s get started

Finding the right property in Spain

Buying property as an investment is different to buying property to live in. There are certain things that need to be taken into consideration in order to get the best ROI possible and keep costs to a minimum.

spanish buildings

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Many of the basics of property investment remain the same regardless of where you are buying, these include:

  • Selecting a favourable location – Don’t let price influence your decision at this stage of the process. Look for areas that have obvious potential and good surrounding amenities and infrastructure.

Buying a property simply because it suits your budget will not guarantee investment success, so it’s vital that you choose a property based on the needs of others rather than your own.

Look out for places that people want to move to and research the local schools and transport links, and delve into the employment situation in the area.

  • Study the local market – Explore the local market as best you can. Try to find out how property prices have performed over recent months and what the turnover rate has been like in the area.

Ask about relative rental yields and occupancy rates, too. Any information you can gather prior to moving forward with your investment will prove invaluable at the decision making stage.

  • Do your sums – Once you have a certain amount of knowledge you will then be able to better calculate whether or not the investment will be right for you.

Take into account all of your costs and remember to add a margin of error into your equation too. Doing so will give you a buffer should your estimations fall short.

statue in spain

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Legal guidance

Even if you are completely familiar with the conveyancing process here in the UK it is vital that you seek the help of a Spanish land law specialist. Urbanismo (Spanish land law) is quite different to ours and the conveyancing system in Spain can prove to be challenging.

While it is perfectly fine to opt for a UK based lawyer or estate agent, it is important that you check their credentials prior to proceeding. Anyone handling property purchases for you should specialise in International Transactions and be registered with the UK Law Society. Drill down further by inquiring about their previous dealings with the Spanish conveyancing system and, wherever possible, try to obtain testimonials from previous clients.

spanish pavement

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Should you choose to have a Spanish lawyer handle your purchase, ensure that they are registered with the local bar association (Colegio de Abogados) and that they are currently practicing. Your legal representative should hold professional indemnity insurance too.

Do not, under any circumstances, sign anything or part with any money until you have received independent legal advice.

Dealing with the language barrier

Independent translators can be worth their weight in gold for those who do not have a good grasp of the language. While the vast majority of legal representatives you’ll deal with will be fluent in English, your contracts and documentation will all be completed in Spanish. Therefore it is vital that you get these translated into English so you know exactly what you are signing before you put pen to paper.

spanish language

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Obtaining a mortgage

Many British banks will be happy to give you a mortgage on overseas property, but, on occasion, better deals can be had if you deal with a local Spanish bank. Unlike banks in the UK, many Spanish banks set their own rates and fees.

So, within the same overall bank, different branches can offer different rates to borrowers. Shopping around is a must when looking for a mortgage in Spain as the variation between one high street lender and another can be vast.

spanish town

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The majority of mortgages issued in Spain will be variable rate mortgages. These can rise and fall according to the changes made to the base rate, which is set by the European central bank.

Fixed rate mortgages are available, but they are not common. In fact, as little as 3 per cent of all mortgages issued in Spain are fixed rate. Similarly, mixed mortgages – those fixed for a certain period at the beginning of the mortgage, which then turns variable when that period has elapsed – can be found through most lenders, but they are not the norm.

Again, the importance of research cannot be understated. Make sure that you are fully aware of any clauses or stipulations set into your mortgage before you sign.

spanish lake

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Deposit levels

Current deposit levels vary across Spain, and things are getting better in this regard. Spanish banks have been risk-averse over the last few years for obvious reasons, but many are now loosening their belts and offering more reasonable deposit rates to purchasers.

Non-Spanish buyers can expect to be hit harder than Spanish nationals, however. In some cases, you will find that some banks are even willing to go as low as 90% with their deposits; depending on personal circumstances.

spanish fields

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This is largely done in the hope that it will stimulate overseas investment once again, and this can only be a good thing for those looking to turn a profit in Spain, but don’t have a big deposit to offer. As long as you are willing to invest your time and efforts, this is a great moment to seriously consider venturing into the world of Spanish property investment. That is, once you know all the facts of course.


Spain has introduced a raft of new taxation laws over the last year, so it is important that you consult with a Spanish tax specialist prior to moving forward with your purchase.

Tax levels in Spain can vary between resale properties and new builds, and completion taxes can be high in some instances. La Complementaria, or ‘bargain hunter tax’ as it is known, has caught many unawares.

spanish park

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This supplementary tax is added to properties after completion as the Spanish tax office alleges that purchasers have underpaid their property transfer tax. Thankfully, there are preventative measures that one can take prior to purchase to ensure that you do not fall foul of this stealth tax.

A good taxation specialist will be able to help you through the potential minefield, ensuring that you do not incur any nasty surprises after your purchase goes through.

spain in autumn

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Getting a return on your investment

As an investment, you will naturally want to see a decent return on the money you invest initially. While capital gains will potentially give you the greatest reward, you will obviously want a more immediate return too. This can be achieved in one of two ways: short- or long-term lets.

Short-term lets

Short-term lets to tourists can be a great way to get higher returns from the property, but it is not without issues. Short-term lets require more work from you or your property manager to ensure good fill rates are maintained throughout the year, and there are legal implications as well.

benidorm skyline

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The regulations for letting property to tourists will vary by region, so your lawyer or estate agent will be best placed to advise on this once a suitable property has been found. It is worth bearing in mind that fines for non-compliance can be extremely large, up to €30,000 in some cases.

Long-term lets

Longer-term lets are subject to the national rental law rather than the more complicated regulations laid down for short-term rentals. That being said, it is always worth seeking the advice of a professional to ensure that you and your property are fully compliant with Spanish law.

You will need different contracts for your lettings depending on how long the let is for. These contracts are easy to come by, and they are an essential part of the process that should not be overlooked.

spain beach property

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Consider using a letting agent

Letting out property overseas can be a headache so it is well worth considering using a local letting agent to handle the day-to-day running of your property. They will be able to keep occupancy rates up and deal with any niggles that your tenants may have while they are renting from you.

Certain areas of Spain, such as Murcia, require you to have a specialist agent from a tourist apartment management company to handle all short-term lets to tourists, anyway. Again, this is something that your lawyer or estate agent can advise you on when you make your initial inquiries.

spanish ocean

Photo Credit: Paulo Brandao via Flickr


While the above will stand you in good stead when choosing your property, it is also important to have the right people on your side too. Be sure to do your due diligence on anyone you deal with throughout the process.

The amount of companies offering investment opportunities both at home and abroad is growing by the day, so it is essential that you stick with an established name such as Aspen Woolf for added peace of mind.

If you enjoyed this blog post then perhaps you would like to read “Why Now is a Great Time to Invest in Spanish Property“?

Feature image credit: mariusz kluzniak via Flickr.

Why Now is a Great Time to Invest in Spanish Property

Spain – synonymous to all Brits with sun, sea and sangria – has, over recent years, had its reputation tarnished somewhat. Thanks to the global financial crisis of 2008, many Britons had their fingers burnt when investing in property abroad, and Spain was one of the biggest culprits.

However, listening to numerous tales of woe does not tell the full story. Many of those who were worst affected bought at the height of the Spanish property boom and left themselves with nowhere to go but down. Today, however, the situation is very different indeed.

Why invest in Spain today?

spanish flag

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Things have slowly been improving across the country over the last year or so. The Spanish government brought in timely measures that, although painful for many at the time, seem to have helped turn this beautiful country around. Things are on the up in Spain.

2014 saw unemployment drop by a quarter of a million and the country’s GDP grew by 0.9% in just the first quarter of 2015 alone. This growth is 18 times that of the United States, and the country’s output for the same period rose at three times the rate of the UK. Spain has beaten all expectations to become an economy to watch over the coming months and years.

The Pound Vs. the Euro

pound verses euro

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Thanks to all that is currently happening in Greece, the Pound has gained strength against the Euro in recent months. Historically too, the Pound has been the dominant currency despite its 2008 low period. Many analysts are predicting strong times ahead for the Pound with further uncertainty across the eurozone.

International money transfers have never been easier either, thanks mainly to the increasing use of the World Wide Web. Here at Aspen Woolf, we have our own international money transfer service which enables our clients to obtain far better rates than those offered by the High Street banks – a choice that simply wasn’t available a decade or so ago.

Where to invest?

spend or invest

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While Spain on the whole may be experiencing a move in the right direction, it’s essential to know exactly where to invest your money in order to see the best returns. One such area is often to referred to as Spain’s Golden Triangle; the three points of which are Estepona, Benahavis and Marbella.

Property prices are low in this region, despite its solid reputation. Developments such as Hoyo 19 Los Flamingos – part of the Los Flamingos Golf Resort – which sits almost centrally within the three points of the triangle, offer investors a fantastic opportunity to purchase property at a price that should allow for growth in the future. It’s provision of specialist golfing experience, easy access to beaches and restaurants, and it’s vast range of incredible, awe-inspiring views make this resort the envy of almost any location in the world.

murcia spain

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La Manga Club in Murcia (among those nominated as “the most attractive” area in 2012,) also offers absolutely breathtaking scenery alongside beautiful interior designs and comforts. This sports and leisure club currently boasts 40/50% below peak selling prices, so there’s really not much to wait for at all if you’re considering your first or next move in international property investment.

It is not just us who are predicting good things for the Spanish property market. Global billionaires such as George Soros, Bill Gates, Carlos Slim and John Paulson have all been investing heavily in the country’s real estate too. When you look at the track record of renowned businessmen such as these, very few mistakes are made.

While riding on other people’s coattails may not seem like the most intuitive reason to make an investment, if you’re going to follow anybody, these guys are the ones to fall in behind.

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Look to Spain for Bargain Properties

Thinking of buying a home in the sun? Look to Spain for bargain properties as housing crisis comes to an end say experts

Prices of homes on the Mediterranean coast rose 0.2 per cent in March

First increase since January 2008 – since when average values across that region have fallen by 48%

Bargains galore: Zoopla advertising four-bedroom townhouse in Almeria for £19k

After what seems an eternity, it’s over. No, I’m not referring to the General Election, but the long-running Spanish housing crash.

‘After seven years of consecutive declines we’re starting to see signs that Spanish house prices have bottomed out, and even started to rise in some segments,’ says Mark Stucklin, the Barcelona-based British editor of Spanish Property Insight, a website for buyers.

Tinsa, a Spanish valuation service, says prices of homes on the Mediterranean coast rose 0.2 per cent in March – the first increase since January 2008, since when average values across that region have fallen by an extraordinary 48 per cent.

Spanish property - Mallorcan coast
Sunny forecast: The Spanish economy is picking up so consider investing in an apartment such as these on the Mallorcan coast

That’s not all. Spanish house building is finally under control, with planning applications for new homes just 4 per cent of the level in the boom days of 2006.

Spanish banks, which once had a million repossessed homes, now have a reasonable 120,000. All that is translating into buyers returning to find a dream home in the sun.

There are bargains galore. Zoopla is advertising a four-bedroom townhouse in Almeria for £19,200. A two-bedroom apartment in an Alicante city block, complete with communal rooftop pool, can be yours for £25,100.

Even the high-end estate agents such as Savills and Chestertons are now selling new flats on the Costa Blanca for well under £120,000 each.

Agents say most British buyers are particularly attracted to the Costa del Sol thanks to 20 flights daily from the UK to Malaga.

Spanish property - Alicante, Las Brisas de Alenda
Bargains: 3 bedroom, 2 storey townhouses in this new development in Alicante, Las Brisas de Alenda, go for £105,604 through Savills

Coastal properties in established resorts and developments are selling for just £40,000, while high-end purchasers look at the cities – especially Valencia and Barcelona – and favourites like Mallorca and Menorca.

And experts are confident this upturn will last, with some buyers making commitments not just for get-rich-quick new-build schemes, but serious restoration work.

‘In prime areas, we see a substantial increase in older homes bought for refurbishment or total renovation,’ says Michael Corry-Reid of Aylesford International, an agency with offices in Spain.

But be careful if you need a loan to buy your villa, flat or finca. The Spanish mortgage system is stricter than the UK’s and particularly hard on self-employed borrowers.

‘An option may be to extend the mortgage against your UK property and use the money to buy in Spain,’ says Miranda John, international manager at broker SPF Private Clients.

As always in Spain, care must be taken over tax and legal issues. Agents advise buyers to use only experienced lawyers and not to sign documents in a language they do not understand.

Allow 10 per cent of the purchase cost for property tax, notary and land registry bills and the cost of switching on utilities. On new-build homes, you may have to pay VAT, too.

But the holiday home dream could be back.

Original article written by Graham Norwood for Daily Mail

Why UAE Investors Look to Spain

Golden visa rule allows investor and family to travel within Schengen area without visas.

10 reasons why Middle East investors should look at Spanish real estate

Investors from the Middle East are seeking to diversify their investment portfolio and today there are many possibilities and opportunities in the marketplace. But one of the countries that is attracting attention among private and corporate investors is Spain, thanks to the potential of price growth and the Golden visa rule that allows investors and their family to travel within the Schengen area without visas.

Here are 10 reasons why investing in Spain’s real estate market is ideal for any Middle Eastern investor.

1) Low prices post-recession

Since 2007, the economy, and the real estate sector in particular, suffered a severe readjustment with a decrease of 30-40% in the prices across the country. This negative trend slowed down during 2014 and prices started going up in the big cities: Madrid and Barcelona. Therefore, opportunistic investors are taking advantage of these low prices in order to diversify their portfolio across diverse industries. Commercial, offices and residential, in this order, are the sectors that offer higher short-term returns and big potentials in the long term. Furthermore, the current dominance of the Dollar – and Dirham – over the Euro makes the investment even more accessible.

2) Economic recovery

The growth of the Spanish economy during 2014 and the prediction of its GDP to grow on an average of 2% per year from 2015 onwards have favored the amount of transactions during 2014. In total, €7 billion have been invested in the non-residential real estate sector across last year, a huge increase from €2.5 billion during 2013, according to consulting firm Savills. Residential investments, dominated by foreign buyers, have reached €6 billion.

3) Strong tourism

Spain remains one of the most popular touristic attractions worldwide. During 2014 the number of visitors reached 65 million, 5 million more than in 2013, just behind the US and France. With a total of more than €1 billion in investments in the hospitality sector, an increase of 37% from 2013, Middle East investors have also targeted the Spanish market. Qatari groups, Qatar Armed Forces Investment Portfolio (QAFIP) and Katara Hospitality purchased the Renaissance Barcelona from Marriott International for €78.5 million and the Intercontinental Hotel in Madrid for more than €70 million.

4) Opportunistic market

Whereas traditional Middle Eastern investment locations such as London or Paris are suffering from high prices that limit the ability to enter these markets, Spain offers lower barriers of entry for investors seeking opportunistic investments. Especially in regards to areas of growth and regeneration, like Murcia.

5) Easier access to credit

The economic recovery goes hand-by-hand with the credit availability and investment opportunities for local and international investors. Banks are starting to lend more money since the beginning of 2014 and developers are slowly starting new developments. Demand never diminishes in the big cities.

6) Golden Visa

Since 2013, non-resident investors that acquire real estate for a value of, at least, €500,000 are eligible to obtain a residency by investment which allows the investor and its family to travel within the Schengen area without visas. At the same time, it is possible to stay within the Spanish territory for as long as desired but there is no minimum stay necessary in order to maintain the residency.

7) Increase of rental among nationals

Due to the economic downturn since 2007, many Spaniards do not still have the economic power to purchase a property and, consequently, renting has become more popular in this period. In the last decade the number of residential rentals has increased by a 36%.

8) Big investors

Bill Gates, George Soros or Goldman Sachs are just a few of the big names who have invested heavily in the Spanish economy during 2014. Likewise, Middle Eastern companies such as National Bank of Abu Dhabi, United Arab Bank, IPIC (International Petroleum Investment Company of Abu Dhabi), Emirates or Qatar Airways have made their moves to penetrate the Spanish market. The fact that these brands are investing in the country creates are trend that is being followed by investors worldwide.

9) Prices increase potential

A big difference between investing in Spain and in other countries, like the UK, Germany or France is the potential for price growth. Whereas rental and selling prices are already reaching maximum levels in other European countries, Spain offers big margins for improvement in the short and long term.

10) Direct flights from UAE

Direct flights from Dubai to Madrid and Barcelona and Abu Dhabi starting to fly from March 2015 to Madrid, makes the journey for UAE residents easy and short. Furthermore, Spain allows easy and short transit to all European countries by air, train and road.

The author of the article is the Co-Founder of Hispalux Consulting.

Note: The views expressed are the author’s own and do not reflect in any way, the views of Aspen Woolf. Readers are advised to carry out their own due diligence before taking any decision.