Foreign home buyers return to Spain

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This topic contains 34 replies, has 13 voices, and was last updated by Profile photo of peterhun peterhun 3 years, 9 months ago.

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  • #57315
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    That’s the headline from this Cinco Dias article

    http://cincodias.com/cincodias/2013/03/01/economia/1362158084_173919.html

    Así, en 2012 un total de 38.312 ciudadanos extranjeros no residentes compraron casa en España, lo que representa un incremento del 28,4% respecto a 2011 y supone prácticamente equipararse al volumen de ventas de 2007, primer año de la serie histórica que elaboran los notarios y último antes de que estallara la crisis. Entonces, fueron 41.787 los foráneos que optaron por adquirir una propiedad en España.

    Maybe Rocker’s observations of things picking up on the coast, are true?

    The article also states that the Russians have become the second largest group of buyers (behind the Brits). Seems a little strange to me – surely they would have waited until they could get legal residency?

  • #115907
    Profile photo of Anonymous
    Anonymous
    Participant

    The Spanish tax man will fleece anybody owning a property in Spain for every Euro they have got. Sales tax on the Catastral valuation of the property, yearly property taxes rising, stealth taxes, money confiscation by a bankrupt Government desperate for funds. Annual wealth tax. It is only going to get worse.

  • #115908
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    @jakesuper wrote:

    The Spanish tax man will fleece anybody owning a property in Spain for every Euro they have got. Sales tax on the Catastral valuation of the property, yearly property taxes rising, stealth taxes, money confiscation by a bankrupt Government desperate for funds. Annual wealth tax. It is only going to get worse.

    And yet according to the published figures, over 38,000 foreigners bought property in Spain last year, an increase of 28.4% over 2011.

    Go figure, as they say.

  • #115910
    Profile photo of Fuengi (Andrew)
    Fuengi (Andrew)
    Participant

    @jakesuper wrote:

    The Spanish tax man will fleece anybody owning a property in Spain for every Euro they have got. Sales tax on the Catastral valuation of the property, yearly property taxes rising, stealth taxes, money confiscation by a bankrupt Government desperate for funds. Annual wealth tax. It is only going to get worse.

    I wish! most people would pay very little sales tax if that was the case!
    What yearly property taxes are rising? Mine have’nt.
    What ‘stealth’ tax? maybe you should tell Mark, seems to have forgot to include them here! http://www.spanishpropertyinsight.com/tax-and-pensions/property-taxes-for-non-residents/ tut tut mark 🙄

  • #115912
    Profile photo of katy
    katy
    Spectator

    Strangely sales are down in Andalucía and Murcia. Areas where the british have traditionally bought. 😕

  • #115915
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    @katy wrote:

    Strangely sales are down in Andalucía and Murcia. Areas where the british have traditionally bought. 😕

    The increase is mainly in Catalunya, but also Madrid and Valencia. Part of that may be the Russians (they are big in Catalunya we’re told). Perhaps buyers are looking for good fast train connections? 😉

  • #115917
    Profile photo of Chopera
    Chopera
    Participant

    Can’t say I’ve noticed that many Russians around Madrid, but I believe there has been a push to sell to the Chinese, of whom there are plenty. Indeed if it carries on at this rate they’ll have to rename Madrid “China town”.

  • #115919
    Profile photo of Anonymous
    Anonymous
    Participant

    @chopera: I drink to that if I can get a decent Chinese restaurant in the China town.

  • #115920
    Profile photo of Anonymous
    Anonymous
    Participant

    @fuengi wrote:

    @jakesuper wrote:
    The Spanish tax man will fleece anybody owning a property in Spain for every Euro they have got. Sales tax on the Catastral valuation of the property, yearly property taxes rising, stealth taxes, money confiscation by a bankrupt Government desperate for funds. Annual wealth tax. It is only going to get worse.

    I wish! most people would pay very little sales tax if that was the case!
    What yearly property taxes are rising? Mine have’nt.
    What ‘stealth’ tax? maybe you should tell Mark, seems to have forgot to include them here! http://www.spanishpropertyinsight.com/tax-and-pensions/property-taxes-for-non-residents/ tut tut mark 🙄

    Spanish property owners face a double tax shock

    In among a welter of new taxes that have been introduced by the new conservative-led Spanish government, are a couple which will hit foreign owners of Spanish property:

    (1) The non resident tax rate is set to rise to 24.75% from the current 24% level. That doesn’t sound much but it comes on top of the reintroduction of the wealth tax and a big crackdown on holiday home owners who neglect to pay their taxes (see our guide What to do if you get a letter from the Spanish tax office)

    (2) IBI or local property taxes are also set to rise across the country by an average of €30 for each of the next two years as the government seeks to let local councils raise about another €1 billion in taxes. It is supposed to be a temporary measure.

    Older properties that haven’t been revalued for 10 years will be the worst hit as the tax will go up 10%

    If you want to see whether you will get off lightly or suffer then take a look at your last IBI bill and look for the “ano rev” or year of revaluation – if it is 2002 or prior it will be a 10% rise, 2002-6 6%, 2009 or later 4%. Properties revalued between 2007-8 will see no increase as they were the peak property bubble years and the properties are overvalued any way.

    Spanish drivers hit by ‘council stealth tax’

    Indebted town councils across Spain are targeting motorists in a bid to raise revenue much to the disgust of disgruntled residents.

    Removal of free parking zones and an increase in fines for minor traffic infractions have all dubbed “taxation by stealth” by protest groups.

    The latest measures to be unveiled in towns and cities across the north-eastern region of Catalonia include the removal of free parking bays.

    The biggest outcry has been in Tarragona, a city south of Barcelona, where since the start of July, the council has re-allocated 3,700 parking spaces, forcing residents to pay for parking where they could previously leave their car for free….. “It’s a blatant attempt by city authorities to raise revenue,”…..

    But it’s not just motorists who are feeling targeted.

    In Madrid, Metro passengers are bracing themselves for yet another hike in prices as the city hall announced an increase of two per cent on the cost of a monthly ticket, raising it from €51.30 to €52.20 from September 1.

    This follows an increase of 11pc by Madrid’s transport network four months ago. The cost of the fare to the airport has more than doubled in a year to 5 euros for a ticket from the centre to Barajas terminals.

    Tourists to Spain face extra airport tax

    Holidaymakers in Spain this summer (2012) are facing a surprise new airport tax imposed by the Spanish government as it tries to balance its books.

    Some airlines are passing the new departure tax on to passengers, even if they booked their flights months ago.

    Some passengers have received emails telling them either to pay an extra charge of up to seven euros (£6) per person – or to cancel their flights.

    Massive tax rises for Spain in 2012

    The Spanish government has been trying to cut their deficit for over two years now, mainly by spending cuts and tax rises. These have included a 2% rise in the rate of IVA (VAT) in 2010, and a return of the wealth tax in 2011, and now another rise if IVA of 3% in 2012. But it seems that after a change of government in December 2011 they are getting serious about plugging the gaping hole in the national finances with some serious tax rises.

  • #115921
    Profile photo of Anonymous
    Anonymous
    Participant

    And how much has the pineapple can gone up by ?

  • #115924
    Profile photo of Chopera
    Chopera
    Participant

    @shakeel wrote:

    @chopera: I drink to that if I can get a decent Chinese restaurant in the China town.

    Been years since I went to a Chinese restaurant here – too many bad experiences. Besides the Indian restaurants (run by Bangladeshis mainly) have improved a lot now (they’re nothing special, but you know what you’re getting) so that’s where I head.

  • #115936
    Profile photo of The Australian
    The Australian
    Participant

    @dbmarcos99 wrote:

    @jakesuper wrote:
    The Spanish tax man will fleece anybody owning a property in Spain for every Euro they have got. Sales tax on the Catastral valuation of the property, yearly property taxes rising, stealth taxes, money confiscation by a bankrupt Government desperate for funds. Annual wealth tax. It is only going to get worse.

    And yet according to the published figures, over 38,000 foreigners bought property in Spain last year, an increase of 28.4% over 2011.

    Go figure, as they say.

    I am happy to buy a brand new property…peanuts compared to Australian prices but I am confused about all the taxes I will have to pay.

    Can anyone help me?

    Thanks

  • #115940
    Profile photo of Anonymous
    Anonymous
    Participant

    @THe Australian. Jake is your man !!!!

  • #115942
    Profile photo of Chopera
    Chopera
    Participant

    @The Australian wrote:

    @dbmarcos99 wrote:
    @jakesuper wrote:
    The Spanish tax man will fleece anybody owning a property in Spain for every Euro they have got. Sales tax on the Catastral valuation of the property, yearly property taxes rising, stealth taxes, money confiscation by a bankrupt Government desperate for funds. Annual wealth tax. It is only going to get worse.

    And yet according to the published figures, over 38,000 foreigners bought property in Spain last year, an increase of 28.4% over 2011.

    Go figure, as they say.

    I am happy to buy a brand new property…peanuts compared to Australian prices but I am confused about all the taxes I will have to pay.

    Can anyone help me?

    Thanks

    For new build property the purchase tax (VAT or IVA in Spanish) is now 10% and I guess you have to add on maybe 3% to cover other costs (notary, mortgage, etc).

    there are other taxes as descri¡bed here: http://www.spanishpropertyinsight.com/tax-and-pensions/property-taxes-for-non-residents/

    but as a rule of thumb I’d budget for 13% purchase costs, at least €200/month on local council taxes, insurance, maintenance, community fees, etc, and then say €10k to sell the place.

    It all adds up, and when you compare it to renting I find renting usually wins.

    (Oh and take Jake with a pinch of salt by the way)

  • #115944
    Profile photo of The Australian
    The Australian
    Participant

    @chopera wrote:

    For new build property the purchase tax (VAT or IVA in Spanish) is now 10% and I guess you have to add on maybe 3% to cover other costs (notary, mortgage, etc).

    there are other taxes as descri¡bed here: http://www.spanishpropertyinsight.com/tax-and-pensions/property-taxes-for-non-residents/

    but as a rule of thumb I’d budget for 13% purchase costs, at least €200/month on local council taxes, insurance, maintenance, community fees, etc, and then say €10k to sell the place.

    It all adds up, and when you compare it to renting I find renting usually wins.

    (Oh and take Jake with a pinch of salt by the way)

    Many thanks for your reply…but how can be there:

    €200/month on local council taxes, insurance, maintenance, community fees

    ?

    Let’s say I am interested in a brand new apartment in the Canary Islands where maybe the IVA is even lower (I think?) and I don’t want to sell the place, just live in it as main residence.

    Thanks

  • #115945
    Profile photo of Chopera
    Chopera
    Participant

    @The Australian wrote:

    @chopera wrote:

    For new build property the purchase tax (VAT or IVA in Spanish) is now 10% and I guess you have to add on maybe 3% to cover other costs (notary, mortgage, etc).

    there are other taxes as descri¡bed here: http://www.spanishpropertyinsight.com/tax-and-pensions/property-taxes-for-non-residents/

    but as a rule of thumb I’d budget for 13% purchase costs, at least €200/month on local council taxes, insurance, maintenance, community fees, etc, and then say €10k to sell the place.

    It all adds up, and when you compare it to renting I find renting usually wins.

    (Oh and take Jake with a pinch of salt by the way)

    Many thanks for your reply…but how can be there:

    €200/month on local council taxes, insurance, maintenance, community fees

    ?

    Let’s say I am interested in a brand new apartment in the Canary Islands where maybe the IVA is even lower (I think?) and I don’t want to sell the place, just live in it as main residence.

    Thanks

    Prices for maintenance vary, but in Madrid for a 1 bed apartment with a pool, 24 hour consierge/security, lifts that need to be maintained, etc that also needs to be cleaned, lit at night, etc then I’d expect to pay around €100/month. It might be less in the Canaries. This information should be made available to you before you purchase a property anyway. The local council taxes (IBI) aren’t too high compared to the UK, and I can’t remember how much we pay in Madrid, but let’s say €50/month. I’ve also estimated €50/month for insurance and various unforeseens. If you want an alarm that might cost you say €20/month, internet/telephone maybe €70/month (depends on bandwidth, etc), on top of that you’ll have the usual bills (in the Canaries you won’t have to spend much on heating, but you might have to with air conditioning).

    Obviously you know your circumstances better than I do so I’m just trying to give you things to think about. Even though everyone on this forum will argue the toss about practically anything, one thing everyone agrees on is that you should rent first before buying. Ideally for a year or so, just so you can speak to the locals and get a feel for the area and the potential pitfalls. Property purchase costs in Spain are high and you don’t want to be paying that 13% all over again because it turns out you don’t like your flat.

    Also if you don’t plan to sell then you’ll need to look into Spanish inheritance laws (well you should do that anyway)

  • #115946
    Profile photo of The Australian
    The Australian
    Participant

    @chopera wrote:

    @The Australian wrote:
    @chopera wrote:

    Obviously you know your circumstances better than I do so I’m just trying to give you things to think about.

    Also if you don’t plan to sell then you’ll need to look into Spanish inheritance laws (well you should do that anyway)

    I am very thankful for your replies.

    Yes I read about setting up a foreign based company but I need to read more about that.

  • #115948
    Profile photo of GarySFBCN
    GarySFBCN
    Participant

    Can’t say I’ve noticed that many Russians around Madrid, but I believe there has been a push to sell to the Chinese, of whom there are plenty. Indeed if it carries on at this rate they’ll have to rename Madrid “China town”.

    There are many Russians in Barcelona. Last Thursday, after having pintxos at a restaurant, we wandered into a peculiar bar across the street. It was Russian owned and operated, a rag-tag group, very friendly and they spoke perfect Spanish.

    This is coming from ‘gut feeling’ and not analytic observation: It seems as if some Russian’s are happy to get out of Russia and have sufficient money to open businesses and not feel pressured to make a profit for a few years. They don’t seem like ‘Russian mafia’ types, nor do they seem like they want disobey Spanish laws. Who knows how they initially got the money.

    And on an earlier post, I spoke of Barcelona’s ‘Chinatown.’ As someone who has lived on the Pacific Rim all my life, I am absolutely pleased that I can now buy authentic foods at the dozens of Asian food markets and prepare decent Chinese, Vietnamese and Filipino food in Barcelona.

    Last week, I made Sinigang, a traditional Filipino tamarind and pork soup, and it was wonderful.

  • #115950
    Profile photo of Anonymous
    Anonymous
    Participant

    I too have come across more Russians of late and the visible ones at the front end (running businesses) seem perfectly normal people who do indeed learn Spanish quickly.

    But the mostly invisible underside is never far away according to reports in the local newspapers. A Spanish notary and property developer have both been shot dead in broad daylight by Russians, in separate incidents.

    And the Chinese, increasing in numbers like an influx of rabbits, are just as friendly and sociable at the front end while further reports in local newspapers talk about Mafia gangs extorting their own people behind the scenes, chopping them to pieces if they don’t pay up.

    While talking about foreigners, I could mention the Albanians but what would be the point?

    I show respect most people in life, especially those who seem to have easy access to choppers and guns.

  • #115952
    Profile photo of Anonymous
    Anonymous
    Participant

    €200 is indicative amount. Of course it can be more or less depends where you buy & your life style.

    You may want to live there & do not want to sell. As it happens everything has a begining & an end.
    The 10% is as and when the day comes that you may need to depart from the world and may only need a few M2. Do not forget even that piece of land attracts VAT and the last i heard they are not sure if it attracts a standard or higher VAT rate. To me it emplys that dying is a luxury, hence the higher rate of tax.

  • #115959
    Profile photo of Anonymous
    Anonymous
    Participant

    @mgspain wrote:

    Talking of Ruskies, I was chatting to the young Russian guy who lives in the same building. I asked him if he could drive in Spain, he explained
    that he couldn’t as his licence wasn’t valid and he had not got a Spanish licence. At that point we we’re both leaving the building, I got into my car and he got into his BMW, we both drove off.

    LOL

  • #115960
    Profile photo of peterhun
    peterhun
    Participant

    They don’t seem like ‘Russian mafia’ types, nor do they seem like they want disobey Spanish laws. Who knows how they initially got the money.

    Russia economy has being doing quite well, it has no debt for instance.

    I met a Russian accountant, earned $7k per month and was looking to buy a $250k 1 bed apartment in an ok-ish area of Moscow.

    So don’t assume the worse about Russians.

    @The Australian wrote:

    I am very thankful for your replies.

    Don’t forget you will have to declare your world wide assets and pay annual tax on the value.

  • #115961
    Profile photo of Chopera
    Chopera
    Participant

    @peterhun wrote:

    Don’t forget you will have to declare your world wide assets and pay annual tax on the value.

    Only on assets above €700k I believe, and there’s a €300k allowance for your house

  • #115964
    Profile photo of katy
    katy
    Spectator

    Correct me if wrong but why would any Russian want to become resident of Spain when Russian tax is only 5% 😕 The least you will pay in Spain is around 22%.

  • #115965
    Profile photo of Chopera
    Chopera
    Participant

    Yes it does make you wonder why Spain on the one hand is trying to tax worldwide assets while at the same time encouraging immigration from countries where it is impossible to check what assets people hold. I mean I can really see your average funcionario at Hacienda trying to track down someone’s account at the Xiangyang branch of the Hua Xia Bank!

  • #115968
    Profile photo of Anonymous
    Anonymous
    Participant

    I’ve got a friend who’s a Guardia Civil and have frequently asked him how they can possibly cope with all the foreigners, especially the Russians and Chinese with their strange language.

    His party line is to point to his service revolver. ‘They all understand me when I speak to them.’

  • #115970
    Profile photo of GarySFBCN
    GarySFBCN
    Participant

    Correct me if wrong but why would any Russian want to become resident of Spain when Russian tax is only 5% The least you will pay in Spain is around 22%.

    Have you visited Russia? In winter? It’s got to be worth 50% just to get the hell out.

  • #115972
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    @garysfbcn wrote:

    Correct me if wrong but why would any Russian want to become resident of Spain when Russian tax is only 5% The least you will pay in Spain is around 22%.

    Have you visited Russia? In winter? It’s got to be worth 50% just to get the hell out.

    Heh. There is a big reason why Spain attracts over 55 million tourists a year, and it isn’t the cheap wine (although that may help)!

  • #115973
    Profile photo of The Australian
    The Australian
    Participant

    @dbmarcos99 wrote:

    @garysfbcn wrote:
    Correct me if wrong but why would any Russian want to become resident of Spain when Russian tax is only 5% The least you will pay in Spain is around 22%.

    Have you visited Russia? In winter? It’s got to be worth 50% just to get the hell out.

    Heh. There is a big reason why Spain attracts over 55 million tourists a year, and it isn’t the cheap wine (although that may help)!

    Hot WOMEN?

  • #115977
    Profile photo of Anonymous
    Anonymous
    Participant

    That turn into their mothers, just like the Italians 😉

  • #115984
    Profile photo of Anonymous
    Anonymous
    Participant

    Spain’s National Debt Clock

    Spain’s national debt currently stands at 620 billion Euros (excluding bank bailout). This is a debt to GDP ratio of approximately 73%. Spain is paying 33 billion Euros per year just to service interest on the debt.

  • #115986
    Profile photo of katy
    katy
    Spectator

    @garysfbcn wrote:

    Correct me if wrong but why would any Russian want to become resident of Spain when Russian tax is only 5% The least you will pay in Spain is around 22%.

    Have you visited Russia? In winter? It’s got to be worth 50% just to get the hell out.

    They can get out for the winter months without getting into the tax system 🙄

  • #116003
    Profile photo of Anonymous
    Anonymous
    Participant

    There are a few reasons why Russians like to visit Spain, being weather the first and foremost.
    Did you know it can get to -25C in Moscow in the winter?

    Also, Russian women love spanish guys. Mainly because there is a lack of men in Russia. They are still unbalanced since the last century wars that got most of the men killed.

    Recently, the buy-a-house-and-get-a-residence-permit news got them even more interest in buying a house in spain.

  • #116008
    Profile photo of DBMarcos99
    DBMarcos99
    Participant

    One thing the Spanish and other European countries get right (and it seems the Brits are increasingly failing to do) is encourage visitors.
    We read that the Spanish made a big effort to attract the Russians
    http://www.france24.com/en/20130224-russian-tourists-boost-spains-tourism-sector

    “During the Soviet era very few Russians had the privilege of travelling abroad. When Russia opened up to the world, Russians did not have any experience of travel and Spain was one of the countries that was most active in trying to capture clients,” he said.

    Meanwhile the xenophobes in UK (not just UKIP but some in the ruling Conservative party) are doing their best to discourage visitors
    http://www.standard.co.uk/comment/comment/andrew-neather-foreign-visitors-are-an-economic-boon-not-a-curse-8524461.html

    The net result, Ward says, is that “either a visitor has to make an exceptional effort to come to the UK or they understandably give up and go to mainland Europe”. France gets up to six times more Chinese visitors than us. Earlier this year, a group of West End businesses estimated that lost Chinese spending could cost London £750 million a year. As shadow Home Secretary Yvette Cooper warns today, it’s simply bad for business.

  • #116053
    Profile photo of peterhun
    peterhun
    Participant

    @fradem wrote:

    There are a few reasons why Russians like to visit Spain, being weather the first and foremost.
    Did you know it can get to -25C in Moscow in the winter?

    Some Russians like the winter, its not like the wet and windy six months you get in the UK. I prefer Polish winters to the UK, anyday.

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