Where should you be buying a house in Spain? 🏘🇪🇸
Foreign investment has returned to Spain after the crisis caused by Covid-19. Home purchases in Spain are going through a good moment. However, although many are certain that they want to invest in Spain, we receive many doubts about where to do it.
That is why we have prepared this post with some tips and information to take into account when buying a house in Spain. This is our small guide on where to buy!
The first and most important thing to keep in mind is that the location will always be a very personal decision and will vary depending on your taste and budget. However, we hope to be able to give you some useful information to help you make a decision.
Our first recommendation goes around the use you want to give to the property.
First of all, when buying a house in Spain it is important to determine the use you’ll give to the property. Will you use it as a first residence? Do you plan to rent it out? Will it be a house you will use for the summer? Something that would seem so obvious often goes unnoticed but will be fundamental when determining where you should be buying a house in Spain.
It is true that budget is also important, but without knowing what you will use the property for it will be quite difficult to know what you are looking for.
– Profitability 💰
If your motivation for buying a house in Spain is to get the maximum return on investment, here is a list of the most attractive communities to invest in from a fiscal and tax point of view:
Applicable rates of ITP (Property Transfer Tax) for the purchase of a property in the different Autonomous Communities.
In addition, you have to take into account that if you are going to live in Spain you will be considered a tax resident if you live more than 183 days a year and therefore, you will have to pay taxes here.
Another motivation for buying a house in Spain is the “exit” that this house can have. And by an exit, we mean the sale of the property. Keep in mind that there may be areas or places for buying a house in Spain that are fashionable or generate an investor interest for a period of time, but that in the long term may no longer be of interest.
In this sense, it is important to assess where you should be buying a house in Spain. It is essential to determine whether it has a mere tourist interest or if it also has other attractions. Thus, consolidated cities such as Madrid, Valencia, San Sebastian, or Barcelona are practically guaranteed that at the time of sale they will generate an investor interest almost from the moment they are put on sale.
2️⃣ Budget 💸💸
Your budget is a very important factor to take into account when deciding where you should be buying a house in Spain. Currently, the average price is 1,911€/m². The price has increased, compared to the last quarter of 2021 when the average price was 1,853 €/sqm.
Regarding the prices of newly built houses, the average in Spain is 2,069 €/m², compared to second-hand housing with an average price of 1,873 €/sqm.
– Average housing prices by city
We have prepared this brief summary with a breakdown of average housing prices in the cities where buying a house in Spain is most attractive for foreigners.
- Barcelona: 3,474 €/sqm
- Madrid: 3,444 €/sqm
- Palma de Mallorca: 2,565 €/sqm
- Valencia: 1,687 €/sqm
- Alicante: 1,489 €/sqm
- Murcia: 1,212 €/sqm
Keep in mind that these cities often have higher average prices than the average in Spain. That is why if you do not have many preferences, we invite you to discover other areas of Spain. We’re sure you will love it!
Favorite areas to buy a house in Spain 🏖🏙🏞.
The favorite destinations for foreigners when buying a house in Spain are usually the coastal areas. The Autonomous Communities where most sales and purchases have been made during the previous quarter (1Q 2022) are the Balearic Islands, Canary Islands, Valencian Community, Murcia, Andalusia, and Catalonia.
📝 #LuxtonTip. Madrid is not a coastal area, but being the capital and having quite competitive tax rates has made it into the list. In other words, you’ll always have a market in Madrid.
Who buys more houses in Spain?
Regarding the nationalities that buy more houses in Spain, we tell you the following:
The first place is occupied by British nationals accounting for 12.03% of total purchases by foreigners. In the second place, are nationals from Germany (9.47%) and France (7.05%). Moroccans also account for 5.80% of purchases. They are followed by Swedes, Belgians, and Dutch with percentages of 5.76%, 5.67%, and 5.04%, respectively.
What type of houses are bought in Spain?
In this section, we are going to analyze, in general terms, what is the type of housing that was bought in Spain in the previous quarter of 2022.
- In new housing (new construction), 32,316 sales and purchases were registered. Since the beginning of 2014, it is the highest result.
This means that second-hand properties have represented 80.33% of total sales and new construction 19.67%.
In terms of the type of housing purchased (both second-hand properties and new construction), apartments accounted for 81% of the housing sales and purchases in the first quarter. Single-family homes accounted for 19% of sales.
As for the size of these homes, the average surface area of homes sold was 100.8 sqm in the first quarter of 2022.
Once you know where you should be buying a house in Spain, you can start the process. To start, you’ll need to obtain the Foreigner’s Identification Number (NIE). As a tip, we ask you to not sign anything if you are not sure, first you should seek advice from professionals!
If you are curious about the costs and procedures of buying a house in Spain, check out our previous post or the following video!