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Holiday Home in Spain
Posted: 16 January 2013 10:50:57(UTC)

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Is now the time to buy a bargain holiday Home in Spain for cash?

If so what is the best way to go about it?

What disadvantages / advantages should I be aware of?

Your your advice and experience would be appreciated.

Steve P
Posted: 16 January 2013 14:30:07(UTC)

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"Never invest in a business you can’t understand" - Warren Buffet. I'd say the same quote applies in the property market. If you have to ask, you probably shouldn't do it.

I've never seen the advantages of a holiday home abroad personally (as opposed to investing the money in the UK and going on holiday every year with the investment proceeds). My impression is that it can be a burden as much as anything.

That's my 2 cents, though I have no experience of this of course and would be interested to hear what others think.
1 user thanked Steve P for this post.
murry evans on 20/01/2013(UTC)
Jerry Latham
Posted: 16 January 2013 14:33:42(UTC)

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It is a minefield! Get a solicitor that is up to date with the Spanish national and local laws.
Posted: 16 January 2013 14:39:16(UTC)

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Definetely some good deals to be had particularly if you don't require a mortgage.

check out
al young
Posted: 16 January 2013 14:46:34(UTC)

Joined: 16/01/2013(UTC)
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If you want a holiday home in Spain in so much you don't give a stuff about talking a hit on the price, now is great.
If it's a pure investment move, try another investment.
Fiona D.
Posted: 16 January 2013 14:49:08(UTC)

Joined: 12/01/2013(UTC)
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It's not a bad idea if you feel you can enjoy it & if you have some money to spare. Prices have plummeted in the last few years and there are some incredible bargains - from 50-,000€ for a decent village house up into the hundreds for a beautiful country house with pool etc.

I don't agree with Steve P. - unless you're seeing it purely as an investment. Life is also about pleasure - & the house I bought 4 years ago in Spain (when prices had dropped, but not as much as now) has proved a wonderfully relaxing retreat. Advantages = you know the place & area, so don't feel duty-bound to sight-see, you know your neighbours, overheads are low if it's not a managed community, you don't have to waste agonising hours selecting & booking your holiday.
Disadvantages = money tied up for some time to come.

How to go about it? Identify the region you're interested in and go there to drive around. If you speak Spanish that will help. If you don't, look out for a bilingual abogado (solicitor) or para-legal - the latter cost less & can deal with everything right up to signing in front of a notary. Read up on expat websites first, there's masses of info out there.
Good luck!
Posted: 16 January 2013 14:54:26(UTC)

Joined: 20/01/2012(UTC)
Posts: 4

Dont bother. 20 Years Ive been stuck with Spanish property of some sort.
Its all aggro. Invest in something more liquid and use the income to go on holiday to differnt places.
When I did use my holiday home a few years back i did more visits to the DIY store than nice restuarants. Everyone wants to rip you off all the time.
When the market started tanking I couldnt get out.. Stuck in now and cant afford to sell as I now have enegative equity. Lawyers are all CROOKS in Spain. The banks are all the same. Because no one can remortgage the put a 3% margin on the loan now

Angela Hulme
Posted: 16 January 2013 15:23:13(UTC)

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Get a motorhome and then you are free to explore different areas too if you want to.
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colin wilson on 20/01/2013(UTC)
Jerry Jones
Posted: 16 January 2013 15:46:03(UTC)

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Or consider a boat, then you can move it around between places but treat it like a holiday home. Prices very depressed at the moment and always plenty of people wanting to sell because it didn't work out for them.
Cape Town
Posted: 16 January 2013 15:52:03(UTC)

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If buying in Spain remember to allow for the cost of barbed wire electric fencing around the property
john prescott
Posted: 16 January 2013 16:15:40(UTC)

Joined: 16/01/2013(UTC)
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As long as it enhances your life (not an only an investment) I'd say yes. I bought in Mallorca 2011 in a non tourist location. Its cheap, interesting, the same all year round, and a fantastic contrast to life in England. Do your research.
Posted: 16 January 2013 16:40:57(UTC)

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I am sitting in my RENTED Villa right now, overlooking the sea near Estepona, we have it for 3 months and it is worries about anything other than where to eat lunch.....biggest plus? No DIY .
We are renting for a bargain because there is so much property free that any rent is a plus for the owner. All the guys at the local golf club, most of them Anglos by the way, are renting over the winter, and all of them agree you would be mad to buy when you can rent, the tax you would pay on the purchase of a property alone will be enough for you to afford to rent for about 5 years. Keep your money! enjoy Spain.
5 users thanked Jamberoo for this post.
bb 42 on 18/01/2013(UTC), murry evans on 20/01/2013(UTC), Stephen Garsed on 21/01/2013(UTC), Daniel Mueller on 24/03/2013(UTC), Paul Davies on 21/05/2013(UTC)
gordon neale22580
Posted: 16 January 2013 17:16:24(UTC)

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rent in the area before you buy, look at Mallorca & EAST Algarve before you Buy
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murry evans on 20/01/2013(UTC)
Posted: 16 January 2013 17:17:51(UTC)

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jamberoo how much is the rent and for what? not criticising just interested.
Phil D
Posted: 16 January 2013 17:26:03(UTC)

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We bought a Spanish Apartment in 2004 and prices are roughly about equal on a Euro to Euro basis, with a reasonable profit (before tax) due to the declining £. I would not advise someone to buy a property on a purely investment basis.

To buy and run a Spanish property the main costs are

  • VAT - known as IVA in Spain (different rates for new or old property)
    Currency trading
    Total about 10% when I bought new in 2004

  • Property tax
    Council Tax
    Spanish income tax if you are renting - but there is a double taxation arrangement with HMRC
    Usual utilities
    Community charges for a property in shared environment, either villa or apartment

So far we have not made a taxable profit from renting out, but renting does cover variable costs

  • Estate agent fees (say 2-3%)
    Spanish Capital Gains Tax (17.5% ?)
    UK Capuital Gains Tax (who knows the %)
    Currency trading

On the plus side we had many wonderful holidays, with more planned.
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murry evans on 20/01/2013(UTC)
mark senior
Posted: 16 January 2013 17:46:12(UTC)

Joined: 20/09/2010(UTC)
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@ Jamberoo

You talk a lot of sense here.

I know the area you are in reasonably well, could you advise on best contacts for renting private villas and or apartments please.

Kind regards

ruth karp
Posted: 16 January 2013 18:08:05(UTC)

Joined: 07/07/2012(UTC)
Posts: 2

Dear Phil D...
you have probably put some good sense into
lots of people, the actual breakdown is quite
horrendous.... is there a new tax that you
are charged whether you rent out to tenants or
David B Jones
Posted: 16 January 2013 19:38:35(UTC)

Joined: 16/01/2013(UTC)
Posts: 1

It doesn't matter whether you let your property or not in Spain, you still pay Income Tax. If you are 'non letting', your tax is calculated by a formula based on the Catestral Value of your property. The Catestral is the local councils assessment of the property value and is similar in principal to the Rateable Value in the UK. As a rough guide, tax on a property valued at €100,000 would be circa £480. If the property is jointly owned, 50% is payable by each owner. The tax is paid following completion of a Form Model 210 issued online by the Spanish Tax Authority.
Posted: 17 January 2013 15:44:19(UTC)

Joined: 17/01/2013(UTC)
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Dont invest in Spain at all, you only have to look at the closed and shut up Building Sites over there. Spain is not done yet, and neither is the possibility of one almighty Crash over there. What goes around comes round as they say.
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snoekie on 17/01/2013(UTC)
Posted: 17 January 2013 15:55:55(UTC)

Joined: 09/08/2009(UTC)
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Spain has massively over-built it's coast line. The entire coastline of Spain is now built up with holiday homes. There are also many other countries people can consider moving where there is warm holiday weather so in my opinion prices aren't going to start going up anytime soon. so my advice would be buy one if you want to live there but not as an investment.
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