Real Estate in Spain

15 March 2021

Property Market in Spain

Information on real estate and property in Spain. Including links to further information and real estate sites for Spain.

The good news is that the builders have caught up to demand, so brokers cannot keep charging high rates."

When buying, the buyer chooses a notary, who acts as the middleman for both sides. Lawyers are not necessary, but you will probably find one useful. See this page from the Spanish Notaries site about buying a property in Spain

Spain’s real estate prices went up 173% during 1997 - 2004. Some think that’s a bubble waiting to burst, while others think prices will cool off, but not go down. Indeed, the average annual increase in real estate prices eased from 15.8% in 2003, to 12.5% in 2004, and down to 10.1% in 2005. During the boom, many real estate brokers were charging considerably more than the usual 3-5%. The good news is that the builders have caught up to demand, so brokers cannot keep charging high rates. The bad news is that you often don’t know exactly what a broker has charged you until the day of the closing, when you actually go to pay.

According to the Sociedad de Tasación, as of 3rd quarter of 2020, house/apartment prices:

  • House prices grow 1.1% despite COVID-19
  • The average price  reached € 1,681 / sqm in June 2020, 1.1% more than in December 2019. The trend is similar to the  trend before COVID-19 and shows moderation in the rate of growth of prices
  • Home prices grew 1.5% in the first half of 2020 in the Community of Madrid and 1.0% in Catalonia
  • ST Confidence Index falls 2.2 points in Spain to 40.8. This indicator only improves or stabilizes in Cantabria and Asturias
  • ST Affordability Index, which measures the debt capacity of Spaniards to access a home, stands at 109 in the third quarter and improves three points compared to October 2019
  • ST Effort Index remains at 7.4 years of full salary to acquire a medium-type home

The full Sociedad de Tasación quarterly report can be read from here (in English!!).

Sample maintenance fees when you buy a house in Spain range from 15€ - 60€. (or more with a doorman).

Buy The Dip?

By most accounts there appears to be a pronounced dip in property prices coming off the COVID19 pandemic lockdowns and economic recession. It could be anywhere from 5%-30% in some areas and, while we hope it won't last long, it could present an opportunity to pick up an property investment for your future retirement. 

On the other hand, when this was brought up in our Spain Expat Facebook group recently, it sparked the following response and advice to an American asking about purchasing an investment property in Granada as a near-term rental property and for personal/retirement use in the long term:

I would recommend not to do that. Consider the cost, risks and low upside. 1) taxes are going to be a hassle. 2) tenants have a lot of rights. If they choose not to pay rent, it could take 4 to 6 months to evict or even longer now with covid. 3) If the tenant chooses to stay they have the right to stay up to 5 years. 4) If you leave it vacant you risk having squatters (okupas) who then will be entitled to legal proceedings that can take months to get them out. 5) Managing the rental remotely is not easy in Spain, property managers aren't the same as in US. 6) In Andalucía you'll have to register the rental and pay the deposit. 7) Spanish tax liability, as others have mentioned. In the US you still do 1040 schedule E as you do with rental property in the US. 

Bottom line: In Spain if you're going to live for somewhere less than 5 years, renting is cheaper than buying because of the transfer tax and other closing costs when you buy.

Spanish Real Estate Jargon

Abogado – lawyer or solicitor 
Apostilla – an official stamp on the document which certifies the signature Ayuntamiento – city or town hall Ático – penthouse Baño – bathroom Bodega - winecellar Contrato privado de compraventa – contract of sale Comprador – buyer Calefacción – heating Calidad – quality Campo – in the country Casa – house Cocina – kitchen Comedor – dining room Ciudad – town Cuarto -room Dormitorio – bedroom Ducha – shower Dúplex – maisonette Escritura – Notarised deed of sale Escalera – stairway Finca – farm or townhouse Gastos – fees or expenses Granja – farm or farmhouse Hipoteca – mortgagee Honorarios – fees Huerto – orchard ITP – transfer tax payable when buying a re-sale property IVA – VAT Inmobiliaria – estate agent office Impuesto - tax Lavadero – utility room Lujo – luxury Muebles – furniture Nota simple – property registry information Notario – notary who handles all the conveyance work for property sales NIE – tax identification required by all foreign property owners in Spain Primera copia – signed original of the escritura or a certified copy Puerta – door Piscina – swimming pool Parcela – building plot Piso – apartment, or floor of building Pozo – well (of the water type) Precio – price Pueblo – village Propiedad – property Rústica – rural or agricultural Reformada – modernised Río – river Salón – lounge Se vende – for sale Trastero – storage room Urbanización – community development Vendedor – seller Ventana – window

Further Investigation

With a venture as important and expensive as real estate, we strongly recommend you do your due diligence. This includes learning as much as you can about the markets, the regions, and investment strategies in order to minimize your risk and maximize your returns, whether that's measured in euros or lifestyle. Get as much background information as you can before you start talking to realtors; these books about real estate in Spain have valuble information about the real estate market in Spain - for your curiousity and guidance: ...or search Amazon yourself. Try "spain real estate"

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