EU Property Solutions- Experts in all Spanish property issues

There is currently an increasing problem in Spain with ‘Squatters’ unlawfully occupying unused holiday homes.

With Covid-19 travel restrictions ongoing, many holiday homes across Europe have been sitting empty for over a year. This has made the likelihood of Squatters in Spain invading properties more likely than before the pandemic.

This blog is not us trying to scaremonger but spread awareness for holiday-home owners that there are options and solutions if you or anyone you know is experiencing squatters occupying their Spanish home.

Squatters are moving into these empty properties, making it their home and fitting new locks. They also avail of the properties water, electricity, and bins; leaving property owners left with increased bills and bins which cannot be used.

In a recent interview with Ena Cummings; squatters were described as “vile, evil beasts” who should be thrown out immediately. Unfortunately, due to Spain’s insufficient legal system, Community Presidents not taking action, Banks being irresponsible and the countries water and electric board turning a blind eye, therefore, this means that property owners are left to deal with these squatters themselves.

In Ena’s community, there are 8 squatters who not only have moved into the development but have displayed public indecency. They have thrown bleach and wine at homes on top of stealing water, electricity, and their bin facilities. Ena expressed that the community wanted an AGM with the community presidents.

“It was arranged in 2019 to get the removal mafia in from Madrid. This was to remove the squatters, to get a loan, and pay it through our community fees (which was agreed.) But our two so-called presidents won’t sign the forms as they don’t want to throw people out on the street.”

The only guaranteed way to get squatters removed from a property is to hire a removal mafia from Madrid. This comes at a fee of €5,000. The other option to protect an empty home is to pay €35 a month for a photographic alarm system. The alarm system will notify the Guardia Civil who can throw them out within 48hrs. Nonetheless, both options add further expense to unused holiday homes in Spain.

Ena is adamant that “Spain needs to change their law, but it’s going to get worse before it gets better."

This blog will be providing you with tailored advice on how to avoid these pitfalls when buying or selling property in Spain.

The Spanish property market has been through a turbulent period over the last decade. It's important to work with borrowers assisting them out of difficult situations often not caused by themselves as they fell victim to the Property Crash.

The 2007-2008 crash has led to people looking to sell and get out of the property burden and those looking for a bargain investment.

We have a few pointers if you’re considering buying or selling a property in Spain.

SELLING:

Price the Property to Sell

• The property market in Spain has masses of supply currently, especially in the British/Foreign investor market.
• Your property needs to be priced to sell, or it will sit on the market for a long time.

Will you clear any outstanding mortgage and debts?

• Will your sales proceeds (sales price less costs) clear your outstanding mortgage?
• Do you owe any debts for IBI taxes or Community Fees?
• If you do not clear the mortgage your lender will not release their charge on the property and the sale cannot complete.

 Sales Costs

• 3% Capital Gains tax if you are a non-Spanish Resident.
• Estate Agent fees are 3-6% of the sales price.
• Energy Efficiency Certificate typically €150-€300.
• Plus Valia Tax – this is a local tax on the increase in the value of the rateable value of the land.

BUYING:

Purchase Costs

• Legal conveyancing fees
• Land Registry Fees
• Notary Fees
• Income Tax Provision when purchasing from non-residents.
• Bank fees for money transfers and mortgage fees.

 Future Costs of Ownership

• IBI Taxes
• Community Fees
• Utilities
• Insurance
• Non-resident tax

It all adds up.

 Understand what you are buying.

• Research is essential
• Is your mortgage affordable in the long term? Does the rate change?
• What rental yield can you achieve – be careful if you have been promised a yield. These often don’t materialise.

Brexit and your registrations.

• Have your NIE number ready well before starting the purchase process
• Open a Spanish Bank account well before the purchase process.
• Brexit implications for use of property need to be understood.