The Spanish Property Market
- Make or break in 2012? Spain has always been a very popular destination. Buying a holiday home in Spain has gained international interest in the last months, more and more people understand there are great bargains to be had right now. If you have a dream of a holiday home in Spain, pay attention. It might be a long time until we see similar prices and conditions again!
Why are the prices so low? Developers who started big projects before the financial crisis are now struggling with an ever-increasing debt and need to get rid of their mortgages. The same goes for the private market. Owners, who purchased properties at a peak time when the prices were high, believed they made a great purchase. Now, developers and private owners need to sell their properties fast, resulting in low prices for a quick sell. It is not unusual to see discounts between 50-60 per cent, we even see some properties with up to 70% off original price.
Incentives The Spanish government sees this problem and has already put in place several measures to stimulate sales in this sector. By reducing the purchase tax on new properties in half and reducing the property gains tax with 50% for purchases in 2012, buying a property this year will most probably be a great investment.
A stable market in popular demand A lot of people interested in Spanish property are worried about the future. Looking at the market from a statistical point of view, Costa del Sol and Costa Blanca have always been in high demand, even through rough financial times. There are always going to be buyers interested in properties in Spain, especially the most popular areas like Costa del Sol. Costa del Sol remains popular because it is a prestigious area driven mostly by international money. World famous Puerto Banus and Marbella are superstars, offering easy international access to one of the best areas as far south as you can come in the whole of Europe. The properties in this area retain their value the most and are a bit pricier than Costa Blanca. Costa Blanca, also known as The White Coast, offers a more dramatic coastline with white beaches and a more traditional Spanish atmosphere for young and old. Some areas come close to being as international as Marbella and Puerto Banus, but not quite. The prices here are a little cheaper, offering better value for money. There is also a wider choice of contemporary and modern designed properties for sale. Both areas are fantastic places to buy a holiday home, you are as far south as you can come in Europe with the Costa del Sol region bordering 46
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on Africa, offering one of the healthiest climates in Europe with soft winters and more than 300 days of sun. You’ll find that southern Spain offers something for everyone.
Incredible tax reductions only in 2012 The financial crisis is to blame for the fantastic prices available right now, but the Spanish Government also plays ball and now offers some lucrative tax reductions for purchases this year. You now get a whopping 50% off the property tax (IVA) on purchases of new properties, reducing it from 8% to only 4%. This said, it will only be available in 2012. From January 1st 2013, the taxes will increase to 10% To further stimulate sales, the government introduced a 50% reduction on your Property Gains Tax, cutting it in half on purchases made in 2012. This means you can save a lot of money buying a property this year and then selling it when the prices are higher. The next 5 months will be a winner for sure!
Positive trends A lot of things are happening in Spain, too much to cover here. Some projects will have more impact on the regions than others, like the building of a Cruise Ship harbor in Marbella and Paramount Hollywood Theme Park in Murcia. These two projects alone will generate an increased interest in the regions and stimulate further growth and sales in the property sector. It might not get better than this. The property market in Spain is rapidly growing; the incentives from the Spanish Government are working. We are selling properties like hot cake. Some of the popular areas are even starting to sell out. Waiting around for a further 1-3% price reduction will only make you lose out on your dream home and narrow your possibilities. With the fantastic tax incentives and prices at an all time low, there could be no better time to buy than 2012. Make up you mind. If you need help, we are here for you.
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