The Government has confirmed plans to offer Spanish residency permits to foreign property investors from outside the EU who buy a home in Spain worth €500,000 or more. Savvy estate agents are gearing up for a surge in sales to wealth Russian and Chinese buyers looking to take advantage of the Spanish property crash to snap up a bargain with a residency permit thrown in.
After months of speculation, the Spanish government has given the go- ahead for a new law granting automatic residency to non-EU nationals purchasing property above €500,000. The law, set to be enacted in the coming months, provides certainty for estate agents in Spain targeting non-EU customers, particularly the Chinese and Russian markets, where interest has been very lively since the proposal was initially mooted. Chinese companies are already advertising Spanish residency in Shanghai and Beijing.
The new law puts Spain on a par with Portugal but behind Cyprus which has a minimum investment of €300,000 to qualify, and Greece at €250,000.
Upmarket agents are gearing up for the surge in business. Barcelona-based estate agency Lucas Fox, for example, are leading the way in catering to wealthy foreign real estate investors attracted to Spain by the possibility of residency permits, which comes on top of a sustained increase in Russian, Chinese and Asian buyers in the last few years. In 2012, approximately 90% of sales at Lucas Fox came via foreign buyers, and around 30% of those were to non EU clients.
In anticipation of the surge in demand, Lucas Fox have set up a new company called Residency in Spain (www.residencyinspain.com screenshot pictured above) in conjunction with a specialist Spanish law firm to provide advice and support to clients who want to get residency permits in Spain through investment in residential or commercial property.
Lucas Fox director Alex Vaughan welcomes the new legislation:
“We think this law is a positive move and will encourage investment in Spanish property from non EU buyers. We are also pleased that the Government has opted for a higher threshold which fits in perfectly with Lucas Fox´s position in the market and the profile of the majority of our buying clients. Now is a great time to buy in Spain, prices in prime areas are extremely attractive and this has been reflected in an increased number of transactions so far in 2013. Prior to this announcement the new legislation was already generating a great deal of interest and once the law goes through we expect a big increase in the number of non EU buyers coming to Spain hoping to take advantage of market conditions and the chance of obtaining Spanish residency”
Lucas Fox recently welcomed a delegation of Chinese investors to Barcelona and Ibiza, which signaled the potential impact of the new Residency law on the Spanish property market. A number of them put down reservations for apartments and further trips for larger groups are being organized for July and September. The visits are being organized by the Shangai office of Singapore-based SQFT, which, according to its Director Sylvan Ma, will now be focusing on the sale of Spanish property to their Asian clients.
“Chinese investors and potential emigrants are interested in property in Spain because you get much more for your money, particularly in Barcelona and Ibiza due to the unrivalled combination of lifestyle, architecture and location. The guests I brought with me on this first trip were impressed by what they saw and will all be returning full of positive news and urging their friends, family and business contacts to return to here as soon as possible.”
Overall foreign investment in Spanish real estate increased by 17% in 2012, to the highest level since 2004, and the trend is expected to continue in 2013. The British, Russians and Norwegians make up the largest contingent of foreign buyers.
Figures just released by the government show record sales of property among foreigners resident in Spain (expats) in the first quarter of the year, amassing over 8500 homes.