The new Coastal Law allows refurbishments of homes close to the seafront, and creates a market for longer leases, opening up investment opportunities for those in the know.
In 1988 Spain introduced the Ley de Costas, or Spanish Coastal Law, which nationalised the whole coast. This troublesome piece of legislation expropriated private property without compensation, whilst spectacularly failing to achieve its stated objective of protecting the coast for the public good. Owners of expropriated homes that were legally built before the Ley de Costas were given a 30-year concession of use (a type of lease), many of which were due to expire in 2018.
Now, finally, the Ley de Costas has been reformed; the present Popular Party Government passed the changes in May without any cross-party support, extending concessions from 30 years to 75 years (adding 40 years), and making it legal to buy and sell concessions that before could only be inherited. As a result, concessions are now much more valuable; some could have increased in value by hundreds of thousands of Euros.
The market has already reacted. “The changes to the coastal law are affecting the value of homes,” confirms Juan Fernandez-Aceytuno, head of the Sociedad de Tasación appraisal company, in comments to the Spanish press.
In some areas the new law has liberated the market, and I have heard reports of a frenzy of transactions. I’ll cover this in a follow up article.
The new law also makes it possible to refurbish homes in the “zone of special protection” (servidumbre de protección) close to the seafront, though new building and extensions are still forbidden. So owners of homes on the prime land closest to the seafront – some of the most sought-after locations in Spain – can now invest in upgrading their properties, which before they were forbidden from doing (only minor repairs were allowed). Better, refurbished homes should mean higher prices and a more attractive coastline.
Regions fight new Ley de Costas
The new law has passed onto the statute book, but some autonomous regional governments, namely: Andalucia, Asturias, The Canaries, Catalonia and the Basque Country, have announced plans to challenge it in the Constitutional Court, on the grounds that it infringes on their powers over town planning. For example, the national government can override municipal town plans under the new law. We will have to wait and see what happens.