Real estate in Spain

Property prices in Spain

Main article: Real estate prices in Spain

Number of real estate transactions

Statistics on the number of transactions are updated here.

In 2006 - only 950,000 transactions.

2007: Record 775 thousand deals

In 2007, a record figure of 775,300 real estate purchase and sale operations was recorded (data from the National Institute of Statistics, INE).

In 2010, after three years of declining real estate transactions, the figure went up again (+ 5.9%) to 491,061 (according to Spanish Housing Ministry).

In 2011, the total number of real estate transactions again collapsed by 29% to 349,118.

According to Spanish registrars in 2012, the number of home purchase transactions in Spain decreased by 10%. Clients more often preferred objects of the secondary housing market, and the average cost of apartments decreased by 13%. The share of legal entities among home buyers has grown significantly. If two years earlier there were only 6.5% of them, then at the end of 2012 this figure is 18.65%.

2013

Q2: Number of deals up, sales amount down

In the second quarter of 2013, the Spanish real estate market apparently began to recover from the consequences of the economic crisis. The statistics of the Ministry of Development indicate some stabilization, which is facilitated primarily by the sale of secondary market facilities and demand from foreign buyers.

Thus, according to the statistics received by the ministry, 80,722 residential properties were sold in the second quarter of 2013, which is 4.2% less than in the same period last year. This indicator can be called negative, but it is strikingly different from the sharp falls of recent times.

A slight increase in the level of activity is mainly due to secondary housing facilities, which accounted for the majority of transactions made. Of the 80,722 operations carried out in the second quarter, 66,666 accounted for the "secondary" (82.6%) and only 14,056 (17.4%) - for the share of housing in new buildings.

In five Spanish autonomies, there was an increase in the number of purchase and sale transactions, while in 12 regions it decreased. The most significant increases were recorded in the Canary Islands (16.2%), in Catalonia (12.1%) and Murcia (9.5%), and downgrades in Extremadura (38.4%), Navarre (33.6%) and the Basque Country (33.1%).

The number of sales operations rose in 17 provinces topped by Girona (36%), Huesca (32.7%), Palencia (30.7%) and Malaga (21.2%), while steep drops occurred in 34 provinces, including Gipuzkoa (53.1%), Toledo (43.8%), Álava (42.6%) and Badajoz (39.2%). Among the cities, Madrid (5,269), Barcelona (2,813) and Seville (1,228) became the leaders in the number of purchase and sale transactions made.

In the first half of 2013, the turnover of transactions for the purchase and sale of residential real estate in Spain amounted to 16.779 billion euros. According to the Ministry of Development, this figure is 19.4% lower than the indicators recorded in the same period in 2012.

The above amount corresponds to 128,763 home purchase and sale transactions made between January and June 2013, which is 7.7% more than a year earlier. However, despite the increase in the number of transactions, the turnover was lower due to a sharp decrease in real estate prices^[1]

In the field of secondary housing, the turnover amounted to 13.610 billion euros (+ 10.7% compared to last year), while real estate in new buildings accounted for only 3.169 billion euros (-42.9%).

The largest number of purchase and sale operations was recorded in Andalusia - for a total of 3.256 billion euros. It is followed by Catalonia (3.171 billion), Madrid (2.504 billion), Valencia (2.316 billion), the Canary Islands (944.3 million), the Basque Country (741.8 million), the Balearic Islands (595 million), Castile and Leon (539.9 million), Galicia (525.8 million), Murcia (503.2 million), Castile-La Mancha (469.3 million) and Aragon (371.8 million).

The lowest turnover was in Asturias (221.9 million), Cantabria (172.7 million), Extremadura (170.9 million), Navarre (146.2 million), Rioja (91.3 million) and Ceuta and Melilla (36.9 million).

November: Sale Deal Count Crash

The number of property purchase and sale transactions in Spain in November 2013 fell by 15.9% compared to 2012 and amounted to 21,847. Growth recorded only in the Canary Islands, Navarre, Melilla and Ceuta^[2].

According to the National Institute of Statistics, this figure has been declining for seven months in a row. The November figure turned out to be the second lowest in the entire historical series, which dates back to 2007.

As for the type of real estate, 55% of transactions fell on the share of secondary objects and 45% - on the share of housing in new buildings.

The decrease in the number of transactions occurred in all autonomous communities with the exception of the Canary Islands, where this figure increased by 13.5%, as well as Navarre (9.7%), Melilla (59.1%) and Ceuta, where it doubled. The most notable declines occurred in Rioja (66.6%), Cantabria (55%), Asturias (37.1%) and Galicia (30.2%).

In total, 130,787 city and country buildings replaced their owners in November 2013, which is 3.2% less than a year earlier, and 6.5% less than in October. 82.2% of purchase and sale transactions fell on the share of urban real estate, and 17.8% - on the share of suburban.

In average annual terms, the number of donations decreased by 30.5% (to 3,363 transactions), exchange transactions - by 7.5% (to 854), and the number of cases of inheritance of real estate - by 5% (to 29,034). The number of other operations (transferring housing to the bank to pay debt, seizing real estate for loan debts, etc.) increased by 7.6% - to 44,379.

Year-end: 311,414 deals (-2.2%)

In 2013, the number of home purchase and sale transactions in Spain decreased by 2.2% compared to 2012 and amounted to 311,414, according to the National Institute of Statistics (INE). This figure has been falling for three years in a row, but the current decline has become the smallest since the beginning of the crisis.

Compared to 2007, when a record figure of 775,300 real estate purchase and sale operations was recorded, the level of activity in this area fell by 60%.

2013 was marked by the abolition of tax incentives for the purchase of housing and an increase in VAT on new real estate from 4% to 10%.

In December 2013, 22,723 properties were sold, down 11% from a year earlier. Thus, the number of purchase and sale transactions has been showing negative annual averages for eight months in a row. Compared to November 2013, the number of such operations during this period increased by 4%, and this increase, in turn, was the first in this period since 2009.

The number of home purchase transactions has grown in six Spanish autonomies. This list was topped by the Canary Islands (13.5%) and Murcia (6.4%). The most noticeable drop in the number of transactions, on the contrary, occurred in Asturias (24.2%) and the Basque Country (18.3%).

In December, Madrid (63.9%), Catalonia (2.6%) and Navarre (1.1%) were the only regions where positive average annual changes were recorded. The outsiders were Extremadura and Galicia, where the number of purchase and sale transactions fell by 48.8% and 27.9%, respectively.

In total, the number of urban and rural properties that changed owners and registered in 2013 exceeded 1.63 million, which is 1.2% more than a year earlier. 686,097 transactions accounted for the share of purchase and sale (-1.4%), 51,684 objects were rewritten by gift (-17.4%), 8,734 changed ownership as a result of the exchange (-16.6%), and another 352,725 were inherited (-3%).

In turn, the number of other real estate transactions (return to the bank to pay the debt, court seizure, etc.) increased by 13.8% and reached 534,453.

83.8% of purchase and sale operations in 2013 were accounted for by urban real estate (575,155 transactions, -2.7%). Rural property transactions rose 5.6% to reach 110,942.

High-end real estate out of crisis

The Spanish luxury real estate market in the crisis years not only did not suffer, but also experienced significant growth, according to Engel & Volkers, a company specializing in such housing.

In 2013, the company carried out 603 purchase and sale transactions in the amount of 435 million euros, which turned out to be 48.5% more than in 2012. Similar data were recorded against the background of the total fall in the number of real estate sales in Spain.

The average value of properties sold by the agency Engel & Völkers in 2013 was €719,759, up 11.6% from a year earlier. In addition, the company entered into 435 lease transactions, and the average amount of each of them was 2,496 euros (+ 11.3% compared to the previous year). Engel & Völkers CEO in Spain David Scheffler believes that these figures confirm the thesis announced in early 2013 about a different way to develop the elite real estate market located in the best areas^[3].

2014: The rise in the number of transactions due to tax growth plans for secondary sellers

Up-to-date notary board data is always available here.

The tax reform, one of the points of which provides for a change in tax tariffs on the increase in real estate prices (the so-called plus valia), has whipped up the secondary housing market, ABC reports. The changes come into force on January 1, 2015 and promise sellers "secondary" (namely, they pay plus valia) seriously increasing costs.

This will hit the property hardest, which was acquired before December 31, 1994. Money twenty to thirty to forty years ago was not worth so much as it is now. A typical three-bedroom apartment could be bought in 1978 for 6,000 euros (in terms of those pesetas). If you sell this apartment for 120 thousand before the end of 2014, then plus valia will be 6.595 euros. And starting from the first day of 2015 - already 26.240^[4]

This, according to the General Council of the Notary of Spain, explains the August rise in sales of "secondary housing" (by 22.6%) and a decrease in activity in the trade sector of new construction (a drop of 17%) compared to the same month of 2013.

In August 2014, 17,045 transactions for the purchase of residential real estate in Spain were completed, which is 13.9% more than in the same month in 2013.

From January to August, an average of 28,023 Spanish properties were sold per month. This is 18.8% more than in 2013.

2015

2016:457 thousand transactions (+ 15%)

In 2016, the number of real estate transactions in Spain rose by 15% to 457,689 (INE data). The growth was recorded mainly due to sales growth in the secondary housing market (+ 16.5% or 410,664 transactions). New buildings showed year-on-year growth of only 4.2% or (47,025 transactions).

The largest jump in the number of transactions was recorded in Catalonia (+ 23%), followed by the Balearic Islands (+ 22.3%), Madrid (+ 17.2%, Asturias (+ 16.9%), Valencia Community (+ 14%), Extremadura (+ 13.9%), Castile-la-Mancha (+ 13.9%), Cantabria (+ 12.8%), Basque Country (+ 12.5%) and Canary (+ 12.1%). The smallest increase in the number of transactions was recorded in Rioja (+ 4.3%) and Aragon (+ 3.4%).

2019: 503K real estate transactions (-2.5%)

In total, 503,875 residential properties were sold in Spain in 2019. This figure decreased by 2.5% compared to 2018 - the first decrease in five years.

In 2019, the autonomous community of Valencia became the Spanish region with the largest number of residential real estate sold per thousand inhabitants. According to real estate registrars, 15.19 transactions per thousand people were concluded in the autonomous community.

La Rioja is in second place in this indicator, where 11.89 real estate transactions per thousand residents were concluded in 2019. The Balearic Islands close the top three - 11.88 sales.

Madrid is the leader in mortgage loans issued. Andalusia, Catalonia and Valencia follow.

Deals involving foreigners

In 2008, foreigners participated in 37,714 real estate transactions in Spain.

After falling in 2009, in 2010 this figure increased by 21% to 29,615 transactions^[5].

In 2012, 8.12% of property purchases in Spain were made by foreign nationals.

According to Cinco Dias, in 2012, 38,312 people who are not citizens of Spain became owners of apartments and houses. Thus, the sales level increased by 28.4% compared to 2011 and almost equaled the sales level of 2007, the last year before the start of the crisis - then this figure was 41,787 people.

The most significant drop in the number of buyers occurred in Murcia and Andlausia, while in Catalonia in 2012 the number of buyers doubled the level of 2007. The recovery of pre-crisis sales is also taking place in Valencia and Madrid in the^[6].

At the end of 2012, 42% of transactions in which foreigners participated were related to housing more than 160,000 euros.

2013:11% of deals come from foreigners

In 2013, 11.15% of property purchase and sale transactions in Spain were made by foreigners. This is reported by the College of Registrars.

In the second quarter of 2013, the picture was slightly different: in total, foreigners accounted for 13,632 sales transactions, or 17% of the total. This figure became the most significant for the entire period from 2006 to 2013. Foreigners showed the greatest interest in real estate in Alicante (3,543), Malaga (1,771), Barcelona (1,008), Tenerife (921) and Girona (767).

In September 2013, the official statistics of the Ministry of Development destroyed the myth of a sharp increase in the number of foreigners purchasing real estate in Spain for a residence permit. Only 1% of the 80,722 transactions made in the second quarter of 2013 accounted for citizens of other countries that are not residents of Spain. In particular, between April and June 2013, they carried out 1,086 home purchase and sale transactions, which is significantly less than the figure of 5,000 transactions recorded in 2006.

In the second quarter of 2013, the Spaniards acquired 82.2% of the total number of apartments and houses in Spain, which approximately corresponds to the indicators that have been recorded since 2006. However, the most noticeable is the increase in the number of transactions involving foreigners who already have a residence permit in Spain - it increased both in the first and second quarters of 2013. They account for 15% of the total volume of operations.

In general, foreigners (both those with a residence permit and those who are not residents) made almost 17% of the total volume of transactions. At the same time, as noted by the Idealista portal, it is not the number of foreigners purchasing real estate in Spain that is growing, but their ratio with the total volume of transactions^[7].

Structure of real estate sales in Spain: citizens of the country, persons with a residence permit, persons without a residence permit 2006-2013

Canary and Balearic Islands became the favorite destinations for citizens of other countries to buy apartments and houses in Spain. In the first archipelago, 35% of purchase and sale operations were performed (in the first quarter of 2006 this figure was 19%), and in the second - 38% (against 18% in the first quarter of 2006). In some autonomies, for example, the Basque Country and Madrid, no such growth occurred.

Spanish Real Estate Sales Structure by Region, 2006-2013

In the first half of 2013, the volume of foreign investments in Spanish real estate amounted to 2.834 billion euros, the EFE news agency reports with reference to the Spanish Central Bank. This is the largest figure in the last nine years.

Against the background of loss of purchasing power, difficulties in obtaining financing, lower prices and an excess of real estate in the market, the interest of foreigners in Spanish assets has grown steadily over the past four years, experts say.

According to the Bank of Spain, the amount of private investment in the country's real estate made by foreigners in the first quarter of 2013 increased by 16% compared to the same period last year. However, despite the fact that the volume of foreign investments reached the highest mark since the beginning of the crisis, it still differs significantly from the maximum indicators of 2003 in 3.5 billion euros.

According to statistics of the General Council of Notaries, the number of real estate purchase and sale transactions made in Spain by citizens of other countries in the first 6 months of 2013 increased by 13.6% compared to the first half of 2012 and reached 24,552 operations.

2015: Foreigners bought 69,196 properties in Spain (+ 13 %)

In 2015, foreigners bought 69,196 houses in Spain, which is 13% more than a year earlier, according to data from the Ministry of Development. It turns out that every fifth housing in 2015 was purchased not by a citizen of the country.

Those without a place of residence in Spain closed 4846 transactions in 2015, which is 10.1% more than a year earlier. Those who before that time already had real estate in this country purchased 64,350 objects, 13.3% more.

Average sales growth in the housing market was 9.8%. This segment showed record volumes since 2010. The total number of purchases of vacant houses was 382,691^[8].

By region, Valencia leads. Here, foreigners purchased 20,219 housing units, of which 1,665 were purchased by non-residents. This is followed by Andalusia with 14,384 transactions, of which 1854 were made by people without local registration. Catalonia - 10,264 and 186, respectively. In the Canary Islands, 7,295 transactions were made to sell housing to foreigners, 386 to non-residents. In the Balearic Islands - 5061 and 218, respectively. Madrid closes the leaderboard with 4,951 units of houses and apartments purchased, 79 were sold to people without a local residence.

2016: According to registrars, the share of foreigners 13.25% or 53,500 transactions

Demand from foreign buyers continued to grow. Foreigners began returning to the Spanish property market in 2014. So, according to the registrars, if in 2009 their share in the total number of transactions was only 4.24%, then in 2014 it increased to 13.01%, in 2015 - to 13.18%, and in 2016 - to 13.25% or 53,500 transactions^[9].

2019: 63K deals involving foreigners

In total, 63 thousand foreigners bought real estate in Spain in 2019, compared with 65.5 thousand a year earlier.

In 2019, foreign buyers were most active in the Balearic Islands, where 42.28% of all sales were made by citizens of other countries. In second place Valencia with a significantly more modest figure of 27.08%.

2020: Decrease in the number of transactions by 20% to 46 thousand

Home purchases by foreigners in Spain registered a decrease of 26.3% in 2020 compared to 2019, to 46,303 transactions, which is far from the all-time high of 65,416 transactions reached in 2018. In particular, the fall compared to the record of two years ago reached 30%.

However, as follows from the report published by the Agency of Real Estate Agents (API) and FIABCI Spain, this figure is close to the level of 2014 and significantly exceeds the indicators of the previous crisis.

In relative terms, the share of home purchases made by foreigners was 11.32% of the total, down 1.13 percentage points from the previous year, maintaining the downward trend seen in recent years from a peak of 13.25% in 2016.

"Despite this decline, given the special circumstances, they represent very significant numbers for foreign demand," the study emphasizes.

The autonomous communities with the largest number of home purchases by foreigners in 2020 were the Valencia Community (13,493 transactions), Andalusia (9,443 transactions), Catalonia (7,748 transactions) and, in the distance, the Canary Islands (3,841 transactions), the Balearic Islands (3,146 transactions), the Madrid Community (2,761 transactions) and Murcia (2,617 transactions). In the remaining autonomous communities, the number of annual purchases did not exceed 1,000. All autonomous areas recorded sharp annual declines, with figures in double digits in all cases.

According to the study, the average price of buying a home by foreigners was 1,791 euros per sq.m., with an annual increase of 3.6%, continuing the growth trend of previous years.

At the average price for housing by nationality, Swedes (5,322 euros per sq.m.), Germans (4,668 euros per sq.m.) and Norwegians (4,662 euros per sq.m.) were in the lead. As for the area, 35.9% of apartments were more than 100 sq.m., 20.26% - from 80 to 100 sq.m., 24.7% - from 60 to 80 sq.m., 14.83% - from 40 to 60 sq.m. and 4.32% - less than 40 sq.m.

In addition, the number of home mortgages issued by foreigners amounted to 19,177, a decrease of 17.8% compared to 2019, in which a maximum in the historical range was reached (23,342 mortgage loans).

2021

Due to the COVID-19 pandemic, for the first time in many years, the percentage of sales made by foreigners has left the double-digit range. So, in the first quarter of 2021, according to statistics from the Register of Real Estate of the Spanish Association of Registrars, the volume of acquisitions by foreigners amounted to 9.72% of the total.

In any case, the difference between autonomous regions remains very significant, there are regions where it significantly exceeds 20%, and others where it is less than 1%. At the top of the list are the Balearic Islands (24.33%) and the Canary Islands (21.17%), foreign interest in these coasts is based on a large community of compatriots in places such as Mallorca or Santa Cruz de Tenerife.

It is also interesting to note the percentage of foreigners from mainland territories such as the Valencian Community (19.35%), the Murcia region (18.10%), Andalusia (10.85%) and Catalonia (10.18%), all of which exceed double digits and share a common denominator: the Mediterranean Sea.

At the provincial level, the first point on the map is Alicante, which accounted for 31.48% of purchases made by foreigners. It is followed by Santa Cruz de Tenerife (26.79%), Malaga (25.64%), Balearic Islands (24.33%), Girona (21.92%), Murcia (18.10%), Las Palmas (16.73%), Almería (16.71%), Castellón (12.60%) and Tarragona (10.48%).

The other extreme is Extremadura (0.81%) and Galicia (0.97%) as autonomous regions and Badajoz (0.28%), Salamanca (0.62%), Pontevedra (0.71%), Lugo (0.81%) and Cordoba (0.82%) as provinces.

Who buys property in Spain

2012: British, French, Russian

In 2012, the first place remained with the inhabitants of the UK (they account for 16.63% of the total number of operations involving foreigners). They are followed by the French (9.96%), who occupy almost the same positions with the Russians (9.62%).

According to the annual statistics compiled by the registrars of Spanish real estate, the most active buyers in 2012 were the British, French, Russians, Germans and Belgians. In 2006, the main buyers were Latin Americans, Moroccans and Romanians, who were attracted primarily to cheap mortgages.

While most purchases are made in the secondary housing market, some nationalities prefer property in new buildings. These are citizens of those countries whose residents have the highest purchasing power - the Netherlands (58.61% of home purchases in new buildings), Russia (56.82%), Sweden (54.69%), Belgium (52.96%), Norway (52.83%) and Great Britain (52.1%).

The wealthiest buyers make a choice in favor of apartments and houses with a large area (from 100 square meters and above). The Dutch (49.59%), Norwegians (43.46%), Swiss (43.04%), Russians (40% of transactions), British (38.24%), Danes and Germans (36%) are also leading here.

Among autonomous communities, the most popular destination is the Balera Islands, where 1 out of 4 properties are bought by foreigners (24.95%). They are followed by Canary (22.11%), Valencia (18.01%), Murcia (11.24%), Catalonia (9.34%) and Andalusia (8.86%). Among the provinces, Alicante (33.39%), Tenerife (27.19%) and Girona (25.35%) lead.

According to the results of the first half of 2013, foreigners who are not residents of Spain make up the largest group of buyers. The most active among them were Belgians, French and Germans: the level of their activity in the Spanish real estate market increased by 78.1%, 70% and 35.3%, respectively.

Despite the fact that the British remain the leader among non-residents in the number of acquired real estate (1,244 operations in the quarter), they began to lose their position in the market.

The number of transactions made by representatives of other nationalities has decreased significantly. Thus, among Colombians, this figure decreased by 27.7% and among Romanian citizens - by 1.1%.

2013: British, French, Russian

According to the results of 2013, Russians entered the top 3 foreign buyers of real estate in Spain. In 2013, 11.15% of property purchase and sale transactions in Spain were made by foreigners. This is reported by the College of Registrars. The leaders in this group again turned out to be the British, who accounted for 15% of the total number of such operations, and the second and third places went to the French (10%) and Russians (8.6%).

During this period, the average foreign real estate buyer is looking for a summer home in Spain for a vacation. During the period of growth of the Spanish economy (2003-2006), the first places in the rating of foreign buyers were occupied by labor migrants who came to Spain to work and bought housing for permanent residence. Then the rating was headed by Ecuadorians, Romanians, Moroccans and representatives of other nations. In 2013, many of them disappeared from the top 20.

2016: British, French, German

At the end of 2016, among foreign buyers, the largest share was in the British (19%), French (8.05%), Germans (7.69%), Swedes (6.72%), Belgians (6.03%), Italians (5.41%), Romanians (4.53%) and Chinese (4.14)^[9].

The Balearic Islands account for 33% of the total number of transactions involving foreigners in 2016. This is followed by the Canary Islands (30.49%), Valencia (Autonomous Community) (26.66%), Murcia (18.57%) and Andalusia (15.06%).

2020: Brits. French, Germans

In 2020, the largest share among foreign buyers of real estate in Spain fell on the British - 13.05% of the total, followed by the French (8.16%), Germans (7.75%), Moroccans (6.74%), Belgians (6.39%), Romanians (5.53%), Italians (5.08%), Swedes (4.63%), Dutch (3.32%) and Chinese (3.08%).

2021: British, Moroccan, French

During the first quarter of 2021, the largest percentage of transactions involving foreigners were British (12.1%), Moroccan (8.7%), French (8.2%), German (7.1%) and Belgian (6.5%).

Construction volumes

A sharp decline in demand since 2008 has led to a collapse in the construction of new residential buildings in Spain. If at the time of peak in 2006 construction of 760,179 houses began, then in 2009 - 159 300.

In 2009, the number of unsold residential buildings in Spain reached 1 million (according to Spanish Housing Ministry). Local experts said their sale would take another 6 years.

In 2010, 931,615 properties remained unsold. Due to significant demand, the surplus of housing decreased by 41% by 2014 to 662,761 houses and apartments and to 389 thousand in 2015.

According to the National Institute of Statistics:

• From 1990 to 1996, the construction of about 240 thousand objects began annually.
• From 1999 to 2002, during the period of rapid price growth, more than 500 thousand per year.
• From 2003 to 2004 - 650 thousand per year.
• 2006 - 700 000,
• 2007 - the rise in material prices reduced the launch of new construction to 615,976 facilities.
• 2008 - 328 500,
• 2009 - 159 286,
• 2010 - 123 616,
• 2011 - 86 252,
• 2012 - 50 000

The dynamics of putting the facilities into operation was similar. Despite the huge volumes of housing on the market, 2008 thousand new objects were put up for sale in 630. In 2009, their number decreased to 424,000, in 2010 - 276,883 objects were completed, in 2011 - only 179,351 and only 133,415 in 2012.

In August 2013, construction volumes in Spain increased by 7% in average annual terms, the European statistical agency Eurostat reported. This increase was the third largest in Europe. But at the end of 2013, the number of new housing units under construction annually fell below 60 thousand. Between 2005 and 2008, more than one and a half million were built each year.

In 2015, the housing stock in Spain grew by only 0.19%. During this period, only 50 thousand new real estate objects appeared for a total of 25.5 million euros. This is 11 times less than in 2006, at the peak of the boom, when 566,390 housing units were built. This is evidenced by data from the Ministry of Development.

Since 2010, by the end of 2015, a little more than 630 thousand new facilities have appeared, compared to almost 3 million that were built between 2004 and 2009. Some of this housing is still trying to sell on the market^[10].

Between 350,000 and 400,000 properties remain unsold in Spain at the end of 2016. Most of them are in difficult places for life and the demand for these facilities is very small. Thus, the highest level of empty objects (38.9%) are in Almeria, 37.1% in Cuenca, 36.1% in Castellón, 34.7% in Toledo, 32.7% in Murcia.

Upscale neighborhoods in major cities

In Madrid, as of June 2013, houses in the Salamanca area are in greatest demand, especially on the site between Recoletos, Castellana and Principe de Vergara. Housing is on the rise in Conde Orgas and Viso neighborhoods, as well as outside the urban center - La Moraleja, Mahadaonda, Aravaca and La Florida neighborhoods.

In Barcelona, ​ ​ the districts of Diagonal Mar, Sarria, Pedralbes and La Bonanova are of particular value, and outside the city limits - San Cugat del Vales.

The Swedes, Norwegians, Russians and Swiss are showing the greatest interest in Valencia. They are looking for large apartments near the City of Arts and Ensanche District, as well as mansards in the historic center.

Mortgages

The average mortgage loan in June 2013 amounted to 76.9% of the cost of the object. The number of mortgages in June 2013 decreased by 39.8%, and their average size - by 10.1% (to 108,602 euros).

Bank real estate

As of August 2013, in total, more than 160,000 banking housing facilities were represented on the market. The main emphasis is on vacation real estate. Most often, it is located on the Mediterranean coast and in the Costa del Sol region, and it is the most significant discounts that apply to it - up to 80%.

Sareb - "bad" bank

In mid-June 2013, it became known that the Spanish "bad" bank (Sareb) decided to reduce the prices of real estate assets transferred to it due to low sales.

Since February 2013, only 550 transactions have been closed, while in 2013 Sareb plans to sell 7,528 properties. Therefore, the management of the "bad" bank decided to remove the 25 percent mark-up on the cost of housing. Initially, it was installed at the request of the banks that transferred the property they owned to Sareb. The markup was supposed to provide an annual return of 15% for the shareholders of the "bad" bank (the Banking Restructuring Fund and the main Spanish banks with the exception of BBVA) and high bonuses for the sale of real estate to financial institutions and real estate companies.

However, housing prices set by a "bad" bank exceeded market prices, making its activities ineffective.

Websites of real estate branches of banks

The sites of real estate branches of banks are the largest catalogs where investors can get information about the existing offer. It should be borne in mind that nationalized banks (Bankia, CatalunyaBanc, NCG, Banco de Valencia, BMN, Liberbank, España Duero and Caja 3) sell two types of housing. One is the property, which is still owned by the bank and on its balance sheet. As a rule, these are low-quality objects worth less than 100,000 euros. In this group you can find accommodation from 30,000 euros on the island of Gran Canaria and in Valencia. The second type of real estate is better assets transferred to a "bad" bank to improve the balance sheet.

All banks periodically launch special offers. Experts advise to receive more detailed information about them directly in the offices of financial organizations.

Profitable financing

Another advantage of buying bank housing is favorable financing conditions: the buyer is provided with up to 100% of the cost of the object for up to 40 years and at a reduced rate. Banks make sure that the client's debt is spent on more than 40% of monthly income. Sometimes the buyer is allowed to make a counteroffer.

Real Estate Purchase Procedure

Main article: The procedure for buying real estate in Spain

Real estate taxes for foreigners

Change of Ownership Tax (ITP)

Change of ownership tax (ITP - Impuesto de Transmisiones Patrimoniales).

It will have to be paid within 30 days from the moment of signing the notarial contract of sale (escritura). The basis for tax is the purchase price.

With a real estate price of up to 1 million euros for 2020, this tax is 10% (if the price is higher, then it is a little more).

Usually it is calculated and paid by a notary.

You pay ITP if you buy a property on the secondary market (from the previous owner). If this is new housing (from the developer), then instead of ITP you pay another tax - IVA (VAT). But this does not change the essence, because its size is also 10%.

Property Tax (IBI)

Property tax (Impuesto sobre Bienes Inmuebles, IBI) will be calculated annually from the moment you become an owner. It is calculated on the basis of the cadastral value, which is revised every 8 years. The tax can be raised by municipal authorities, but as of early 2013 is usually within 0.4% per year for urban real estate and 0.3% for rural real estate. In 2021, it was reported that its rate ranges from 0.14 to 1.16% of the cadastral value.

The specific size is calculated by the city authorities and payments for its payment come by mail. Or you can link his payment to your bank account and then it will be debited automatically (this is useful if you live at this address inconsistently).

In practice, the property tax on apartments in 2020 is approximately 300-1000, and on houses 500-5,000 euros per year.

In Spain, the practice is common when a property owner who rents it out transfers the payment of this tax to the tenant of the housing under the contract.

Check the size of the IBI before making a purchase decision.

Non-resident income tax (IRNR)

Income tax on non-residents (IRNR - Impuesto sobre la Renta de No Residentes).

If you don't rent out an apartment

All non-residents with property in Spain pay something like income tax annually. And do not pay attention to the word "income" in the name - we are not talking about actual, but about potential income (potential opportunity to rent).

The basis of this tax is also the cadastral value. The actual cadastral value is indicated in the receipt for payment of IBI tax or it can be requested through the personal account of the Ayuntamiento website at the location of the real estate or the personal account of the Cadastre under an electronic certificate (EDS).

The IRNR declaration is filed by the owner for each property he owns. That is, for example, if you own an apartment and a garage in Spain as two independent real estate objects, you must file two declarations: one for an apartment, the second for a garage. You cannot combine all properties that are owned in one declaration.

When calculating it for 2020, there may be 2 options (depending on how long the cadastral value has changed):

Cadastral value * 24% * 1.1% i.e. 0.264% of cadastral value

or

Cadastral value * 24% * 2.0% i.e. 0.48% of cadastral value.

Usually, if the cadastral value was updated less than 10 years ago, then the coefficient will be 1.1%, and if more than 10 years ago, then - 2.0%. The dates of the last update can be clarified in the Ayuntament of the corresponding city^[11].

Here is an example of calculating the IRNR tax for 2015 for a citizen of Russia - a non-resident of Spain, who owns an apartment, the cadastral value of which is 100,000 euros (the cadastral value was revised after 01.01.1994).

For real estate in Spain, whose cadastral value was revised after January 01, 1994, the 1.1% coefficient is applied. For the rest of the real estate - 2%.

In 2015, the IRNR tax rate for non-residents - citizens of the Russian Federation - 24%.

IRNR tax calculation for 2015 is carried out according to the following formula:

Cadastral value 100,000 x 1.1% = 1100

1100 x 24% = €264.

Importantly, unlike property tax, this tax does NOT come to your post office. You or your accountant must calculate it and file a return (Form 210) with the tax office by December 31 of each year (starting with the next purchase).

As practice shows, many Russians do not know this. And when they find out, it often turns out that the deadlines have long passed and it is necessary not only to pay all the debts, but also to pay a fine (up to 50% of the tax amount).

There have been cases when a non-resident owner did not pay this tax for 5-6 years, and then under some circumstances (for example, when receiving a residence permit in Spain, when selling real estate, this tax suddenly "surfaced" and surprised). Therefore, if you have not paid IRNR for several years, being the owner of real estate in Spain, you will still have to pay it sooner or later for all years with fines and penalties.

In this regard, there are two most acceptable options:

The first option: you can wait for Requerimiento or the so-called "letter of happiness" from the Spanish tax and file returns as required. In this case, it is IMPORTANT for you not to miss this letter and pay tax within the prescribed period - 10 working days from the date of receipt of the letter. Letter - Requerimiento is considered received, even if it was not handed to you personally, but simply left in the mailbox. In case of non-payment on time, serious problems are possible up to the seizure of bank accounts and real estate^[12].

The second option: voluntary payment of IRNR tax, i.e. before receiving Requerimiento. You can voluntarily file and pay the IRNR declaration without waiting for Requerimiento, but fines and penalties will be minimal. Here the principle is this: the sooner you submit an overdue return and pay the IRNR tax, the less the fine and penalties.

In any case, after voluntary payment of tax in violation of the deadline, you will receive a letter - PROPUESTA DE LIQUIDACION DE RECARGO POR PRESIDACIÓN FUERA DE PLAZO DE AUTOLIQUIDACIÓN, according to which you will be asked to pay a fine and penalties for late payment of tax.

The penalty for voluntary payment of IRNR tax (payment before receipt of Requerimiento) with a violation of the submission period of no more than 12 months is 15% of the tax amount and reduces its amount by 25% upon voluntary repayment within the established period.

The penalty for voluntary payment of IRNR tax (payment before receipt of Requerimiento) with a violation of the submission period of more than 12 months is 20% of the tax amount and reduces its amount by 25% upon voluntary repayment within the established period.

If you have received PROPUESTA DE LIQUIDACION DE RECARGO POR PRESENTACIÓN FUERA DE PLAZO DE AUTOLIQUIDACIÓN and you do not agree with the accrued penalty and penalties, you may, within 15 working days, appeal against this decision on the form of this Propuesta, which accompanies this letter in separate forms: MODELO PARA EFECTUAR ALEGACIONES EN EL PROCEDIMIENTO DE LIQUIDACIÓN DE RECARGOS with your identification and your case number.

If you agree with this penalty charge and penalties, you can send nothing to the tax office and wait for the receipt itself, which will come along with the letter LIQUIDACIÓN DE RECARGO POR PRESENTACIÓN FUERA DE PLAZO DE AUTOLIQUIDACIÓN. You can pay for this receipt using a barcode at the branch or ATM of any Spanish bank or online through your personal account.

If you rent out an apartment

If you rent out your property, then the IRNR tax is calculated quarterly and using a completely different formula.

If you own a property in Spain and rent it out, then IRNR tax is calculated on the basis of rental income. A non-resident property owner in Spain who rents out their property is required to file an IRNR declaration each trimester. The deadline for filing a return and paying IRNR tax is April 20, July, October and January for each trimester.

Example:

Here is an example of calculating the IRNR tax for 2015 for a citizen of Russia - a non-resident of Spain, who owns an apartment, and he rented this apartment from January 01 to December 31 2015 for 1000 euros per month.

In 2015, the IRNR tax rate for non-residents - citizens of the Russian Federation - 24%. IRNR tax calculation for 2015 is carried out according to the following formula:

For each trimester of 2015, he needs to file an IRNR declaration and pay tax based on: ��1000 x 3 = €3000.

3000 x 24% = €720.

'Luxury tax '(Impuesto de Patrimonio)

The people call it a tax "on luxury." The base of this tax is quite complex, it takes into account all Spanish assets and liabilities of an individual. But in the absence of other assets, mortgages, husband/wife,... - the base will be the purchase price.

This tax has a progressive scale, which for non-residents starts from 700,000 euros. I.e. if you bought an apartment/house for 650,000, then this tax will be zero.

If you bought a house for several million, then the amount of this tax can be quite significant. However, as usual, where there are taxes, there are also options for their optimization.

The 'luxury' tax amount must also be calculated by you on your OWN (or better by your accountant) and you must file a return (Form 714) with the tax office by June 30 of each year (starting with the next purchase).

Foreign Sales Tax

3% of the cadastral value must be paid by foreigners when selling real estate in Spain.

Property maintenance in Spain

Main article: Property maintenance in Spain

Residence permit for home buyers

Main article: Residence permit in Spain

Real estate rental market

In the first quarter of 2017, the average rental rate for an apartment in Spain increased by 5.9% year-on-year to €7.93 per square meter (Fotocasa website data). Rates have risen in almost all regions of the country. In the regions of greatest business activity, demand significantly exceeds supply.

The largest growth was recorded in Catalonia - 5.4% by the 4th quarter of 2016. The country's highest average rental rates were recorded here: €15.15 per square meter. Despite the overall rise in rental prices in Spain, they still remain 21.7% below their historic peaks, with rates hitting pre-crisis levels in Barcelona alone.

According to the Global Property Guide, as of July 2016, in some places in Spain, buying a small apartment due to extremely low mortgage rates becomes more attractive than renting a home. This situation is completely new for Spain.

Commercial Real Estate

2023: Commercial property deal volume collapse

In the second quarter of 2023, the volume of commercial real estate transactions in Europe fell by 58% to the lowest level since 2010.

The office segment suffered the most - the fall was 68%, while in the hotel segment the fall was 36%. In all major markets, there was a significant decrease in the volume of transactions.

Foreign real estate investment in Spain's economy

In 2013, 33% of all foreign investment in the Spanish economy was in the real estate sector.

The second place in terms of foreign investment is occupied by the energy sector (19%). In third place is the financial sector and insurance (17%)^[13].

In total, foreigners invested 6.632 billion euros in real estate in Spain. Buyers purchased a wide variety of assets: company offices, real estate branches of banks, shopping centers, apartments, office buildings, hotels, houses and villas.

Among the most notable operations were the sale of Aliseda and Altamira branches owned by Popular and Santander banks, Carrefour's purchase of 63 shopping centers in Spain for 380 million euros, as well as the sale of the famous Agbar high-rise in Barcelona, ​ ​ the new owner of which was Emin Capital. Soon a hotel under the brand name Hyatt will open in this building.

In addition, a new tenant, Cepsa, has appeared in the Foster skyscraper in the capital. The building also changed ownership, which was the Abu Dhabi-based Ipic Foundation. He can buy the skyscraper until 2016 for 450 million euros.

The "bad" bank, state administrations and banks became the main sellers of real estate. They were also joined by the department store El Corte Inglés, which in 2013 got rid of several facilities in Madrid and Barcelona for 150 million euros.

Seismic activity

Шаблон:Main 'Seismic activity in Spain

Map of the largest earthquakes in the history of Spain and a description of the last of them.

Useful links

• Idealista.com is the largest property selection site in Spain
• GlobalPropertyGuide - financial information for real estate buyers around the world
• ThinkSpain - a useful section on real estate on the main English-language portal about Spain

See also

• Spain
• Economy of Spain

Notes