Is 'now' the time to buy in Spain… is the wait finally over?

With a change of Government later this year will it be "same old"or a way forward. One thing that is coming clear is the blanket claims world wide on assets held by doms in Spain and you cannot treat this from a Spanish only perspective as it is being entrenched across the EU and really is a natural Government response to having so many other nationalities in there countries. Overall the trend seems to take fiscal advantage of foreign doms in Spain regardless of the fact that property fees are rapidly increasing to a point where they overtake property value.     

With a change of Government later this year will it be "same old"or a way forward. One thing that is coming clear is the blanket claims world wide on assets held by doms in Spain and you cannot treat this from a Spanish only perspective as it is being entrenched across the EU and really is a natural Government response to having so many other nationalities in there countries. Overall the trend seems to take fiscal advantage of foreign doms in Spain regardless of the fact that property fees are rapidly increasing to a point where they overtake property value.     

It’s not just Spain who are caning middle or higher income groups. Recently there has been some publicity about thousands of US passport holders giving up their US citizenship. Boris Johnson among them. This is because anyone with US citizenship is liable for US income tax and asset tax no matter if they never set foot in the country or earn their income elsewhere.

It is very clear to me because of more favorable tax rates in UK, any moderately wealthy Brit living in Spain should never become a fiscal resident and remain in the country only for the 180 days annually. They should also make sure they can prove it by retaining ferry tickets and credit card bills proof of the centre of economic interests etc. The Hacienda does not have to prove anything the onus is on you. This is not tax evasion it's sensible legal tax avoidance.

Of course the vast majority of British and other nationalities who are fiscal residents in Spain are probably not asset or income rich so it matters not. In this event you simply pay a fair share.

It has probably not occurred to the minds of the Spanish government that their tax policy simply forces wealthy people to either live under the radar or do as I suggest. They tried it in France and there was a mass exodus of wealthy individuals to Switzerland and Belgium. They have since reversed the policy or keep promising to do it, I'm never sure which.

For the fellow geeks out there here is a very interesting list of well know people who have relinquished their US Citizenship.

http://en.wikipedia.org/wiki/List_of_former_United_States_citizens_who_relinquished_their_nationality

This message was last edited by Mickyfinn on 21/02/2015.

We have not been out to our Spanish home for 3 years because of ill health. The last time we spent any time in our Spanish home I had a fall, which damaged my teeth and top lip, Blood everywhere. An ambulance came to take me to a local clinic, 5 mins Journey. Fee for the Ambulance €100, I had to go to the Hospital to get the lip stitched, Taken by a friendn in their car, The service was excellent, wonderful staff who were so knid. Our NHS Medical card paid both bills. UK born X service man we know resident in Spain, has suffered many medical problems over the last 12 years. He continually recomends the Health Service in Spain. I back his views.

It’s not just Spain who are caning middle or higher income groups. Recently there has been some publicity about thousands of US passport holders giving up their US citizenship. Boris Johnson among them. This is because anyone with US citizenship is liable for US income tax and asset tax no matter if they never set foot in the country or earn their income elsewhere.

It is very clear to me because of more favorable tax rates in UK, any moderately wealthy Brit living in Spain should never become a fiscal resident and remain in the country only for the 180 days annually. They should also make sure they can prove it by retaining ferry tickets and credit card bills proof of the centre of economic interests etc. The Hacienda does not have to prove anything the onus is on you. This is not tax evasion it's sensible legal tax avoidance.

Of course the vast majority of British and other nationalities who are fiscal residents in Spain are probably not asset or income rich so it matters not. In this event you simply pay a fair share.

It has probably not occurred to the minds of the Spanish government that their tax policy simply forces wealthy people to either live under the radar or do as I suggest. They tried it in France and there was a mass exodus of wealthy individuals to Switzerland and Belgium. They have since reversed the policy or keep promising to do it, I'm never sure which.

For the fellow geeks out there here is a very interesting list of well know people who have relinquished their US Citizenship.

http://en.wikipedia.org/wiki/List_of_former_United_States_citizens_who_relinquished_their_nationality

Out of curiosity I did have a look at the Wiki site about the Yanks who have given up US Citizenship, basically a load of rubbish from Wiki, many were born foreign anyway, the few Yanks who gave up were people who had moved overseas many years ago.

One, maybe a small factor, why Americans who have not been born in the States want to give it up is due to the terrorist situation, these days to be seen with an American passport, somewhere other then America can cause you a few problems should the worse situation arise. Have no doubt also paying two lots of tax don't help much as well.

Buffoon Boris had to pay his American tax on a house sale because it don't matter where americans live in the world, they pay U.S of A taxes regardless if they pay tax also, say in the UK, and he kicked up a stink about paying it on the house sale which he had avoided for years, but he had to otherwise he ran the danger of being arrested when he entered the US, which he wanted to do a couple of months ago anyway for business.

This message was last edited by baz1946 on 21/02/2015.

Doh! I thought the WIKI list was fascinating but there you, go horses for courses. Like houses, countries and people. We seem to have gone way off topic. To the OP is it a good time to buy in Spain is the long wait over? The answer from this Ithread seems to be - It depends as always.on your financial situation.

If you produced tickets, receipts etc to prove that you hadn't overstayed your welcome, all that the Spanish revenue has to do is to say that you haven't produced them all. If the Spanish mafia are out to get you they won't let the truth get in the way of a good scam. The smart move is to rent rather than buy, to use a pre charged UK cash card that you can top up from your phone instead of opening a Spanish bank account, there are some really cheap long term car hire deals if you don't want to risk bringing your UK car over.

Sod the Spanish tax man. 

When I watch the Spanish property buying programs, I more often than not wonder if the prospective buyers are just there for the free trip. Anyone who works in the UK for over 40 weeks a year cannot possibly do justice to holiday home ownership, and if they think that they can successfully manage profitable rental at a very long arm's length, they are sadly mistaken. Just because something has lost a fortune in it's value, doesn't mean that buying one is a good idea, we can rent a luxury 2 bed apartment 500 m2 from the beach for 10 weeks a year for circa £4K, the owner has to pay €3,000 p/a in community charges and local rates before other taxes, insurance, maiintenance costs and other sundry costs.

If you're going to live in it then by all means take advantage of current prices, but don't kid yourself that owning a holiday home is a piece of cake. 

We've already discussed the Place in the Sun and other programmes of this type. Yes, I think most were of the opinion they were just there for a free holiday or looking for a dream, luxury villa with pool for about 10 grand. Talk about unrealistic expectations.

However, I am curious as to where you got the 3,000 a year in community fees and local rates. Please let me know so I can avoid this place if ever I decide to move.

Out of interest, when we had a 2 bed flat our community fees were €450 a year with 4 swimming pools and 4 garden areas to maintain. This was a large community on different streets and everyone paid the same regardless of size of property. IBI for that place was €125 a year, non-resident income tax at around €80 each (total €160).

Now we have moved over permanently, we live in a 3 bedroom semi-detached house also on a community. The community fees, depending on size of property and land, comes to €550 a year, the IBI is €230 a year and we don't pay non-res tax. That is a community with its own satellite TV system, 3 large swimming pools and 4 smaller ones, gardens regularly maintained and outside painting done every so often. Apparently we are one of the highest community fee payers in the area. A 2 bed townhouse community fees come to less than €400 a year and the flats (those with no outside area) considerably cheaper.

Still, a bit like Spain being "cold and damp for 4 months of the year", a bit of exagerration always helps to put over your point of view.

I got the €3,000 from both visiting and researching the complex, the first thing that I noticed is that it didn't have a utility meter, it is infact an aparthotel. I will decline from advertising it, as it is pure luxury for a pittance in rent, I wouldn't want to miss out on our magnificent sea view rental, would I?  

So the advice on not buying a holiday home because of the community/local taxes was quite wrong, then? Glad we cleared that up.

It always was clear. 

The last 2 bed house I sold which I owned for about 8/9 years, never let it out, kids, us and family used it, all in all the cost of running this place came to a shade over 900€ a year, this figure includes everything, pool, maintenance of it and the garden, electricity, house insurance, water, community charges and anything else you can think of, we never cut back on services or skimped on anything.

I also own 2 detached 3 bed villas now and both together don't come to nothing like 3000€ a year.

I get asked quite a few times about buying in Spain and its future, the problems Spain have, the problems with buying a house in Spain, nearly always I say much the same, if you can afford it, and want to do it, then do it, don't be one of those people who always regret what they haven't done, or be jealous of others who do it. 

That is an extremely low amount.

I would be interested to know of others costs and experiences

That is an extremely low amount.

I would be interested to know of others costs and experiences

I have similar figures. A two bedroom detached property in an up-market part of town on a 600m2 plot and I'm spending well under 1000 Euros a year including all taxes, bazura, water, electricity. I don't rent it out mind you, I do the garden myself and have a friendly builder who does small repairs.

I did a quick survey on another site about community fees. The clear winner was quite a large one with 2 pools that came in at 150 euro a year. The loser was a 4 bed detached on a community (if I could afford one like that I think I'd pick a stand alone one) that was 1600 euro a year. Most came back with 350 to 550 a year.

And no, hep, it wasn't "always clear". It seemed as if you were quoting 3000 a year for a holiday home owner which others appear to have read it as well.

Anyhooo. I do agree the holiday home bit has to be looked at very closely. I think the standing charges for electricity (who called it electrickery a while back?) would be off putting.

My outgoings are:

Community charges    548

IBI                                   230

Electric (last year)        845

Water                             246

Home insurance           190

Car insurance               370

Internet/telephone         300

Taxes (Spain)                Nil (Army pension taxed in UK, NHS and wife state pension within tax allowances)

So that's around the 3000 euro a year in total. Obviously not what a holiday home buyer would pay,

Potential holiday home owners should also facture in to their outgoings the annual air flight costs, utility bills and car hire when they use it. They would of course have these with any holiday they took. So you could argue that buying a holiday home is simply like paying in advance for your holidays for the next thirty years at the same place and the annual outgoing could also represent paying outgoings for holidays you don’t actually take.

It’s a dumb idea and I struggle to understand, apart from the herd instinct and one upmanship why people do it. I have read one explanation is that they want a ‘home from home’. However holidays are precisely the opposite of that emotion. Holidays are supposed to be a different and more rewarding experience and a complete change from being ‘at home’ Also if you rent it to total stangers how can that still be a home?. It's a puzzle but each to their own I suppose.

It’s a dumb idea and I struggle to understand, apart from the herd instinct and one upmanship why people do it.

You could also argue that it's a dumb idea when someone buys a New car, say like a top model Range Rover or Merc just because many others have one, same goes for a 5 plus bedroom detached house with large grounds, in most case's it's because they can, and want to, not many other reasons.

As I said the house that I sold was used by us and family, I have no idea what the flights or car rental cost me overall for the year, I used to fly out for the day sometimes, why not if you want to. We both went to Spain at least 8 /10 times a year, including Christmas and winter times.

But I can tell you what a 4 day trip for us two last year to Cornwall cost me, including fuel, lodgings, food, roughly £704, 00, and this is only for the costs that I can remember clearly.

An owned sited holiday used caravan in the UK could cost about £2000 / £3000 per year easily, for what? Wet and cold..No thanks.

Good post Mickyfinn,

When we come to Spain we don't want any mundane every day problems, if a light bulb goes out we pick up the phone and a guy appears with a new one in the complex where we will be staying in April. When we used to rent a villa off a guy that I know we have suffered the following:-

Electric drive gate falls off its runners because the tracks hadn't been cleaned.

Oven kept tripping out the fuse box because the owner had opted for a supply that was sufficient for a small house/apartment, not a 4 bed, 3 bath villa with air con and a heated pool.

No linen change or clean on second week, we simply changed beds and had been cleaning the place daily.

Having to clean the pool ourselves.

I can fully understand why someone would buy on an apart-hotel complex and pay higher community charges in order to have no maintenance problems, but only if they intend to live in it, and not use it as a holiday home, for the same reasons that I posted relating to costs.