To buy or to wait.

Hi Russ,

As you probably know, unlike the UK, there isn't the extent of data available in Spain to give an accurate guide of the "going rate" for a particular type of property in a given area.  So, this is just my personal opinion, but I think you've always been able to get a bargain in Spain, because the housing market is saturated from the boom in the first decade of this century and now they're building modern, white boxes all over the place, while so many of those older properties sit empty.  While Brexit has forced illegal UK citizens to regularise their status in Spain, many others have decided to return to the UK; fewer "snowbirds" seem to be relinquishing their holiday homes, but there are some considering whether the reduced capacity to visit, post-Brexit under Schengen rules, makes the ongoing costs worth retaining them, and these issues have added to the housing stock available this year.  That said, the impact of the pandemic on travel this year and probably for at least another 6 months, could suggest there is potential for further price reductions, once owners are able to get to their holiday homes and carry out the administration of selling much more easily.  I think it's also clear that there are still many UK citizens who don't understand the implications of Brexit on owning property in Spain, either as a holiday home owner or a permanent resident, and this could add to the amount of property becoming available next year, when the reality of Brexit becomes apparent in practice.

It's also worth bearing in mind what appears to be a closely guarded formula that the Spanish tax office uses to decide whether a purchaser has paid too little for a property, which has the effect of reducing their revenue by way of the property purchase tax we have to pay.  This formula is used to calculate what is known as 'Complementary Tax' and can come back to bite a purchaser up to 4 years after they've bought.  The worst cases I've heard of are where buyers have renovated a property and then the tax office applies Complementary Tax to the value of the renovated property, rather than its value at purchase.  To get around this, and there have been a couple of examples reported on the forum this year, lawyers are obtaining 'official' property valuations upfront and then suggesting to their clients that they pay the additional tax when they complete on the property.  That's where you definitely need a crystal ball because you don't know whether, or not, Complementary Tax is going to be applied, so do you pay it upfront, or just keep your fingers crossed for 4 years?

I was involved in a thread earlier this year, where I did a calculation on another member's working example - I'll see if I can find it and add it to this thread.

Kind regards,

Kim

Wait, Prices are still dropping and will do so next year.

Hello

At this uncertain & confusing time, I would  advise you to wait a while to see what affects the  end of the Brexit Withdrawal Agreement & Covid 19 have had on this area. 

 I do agree with Kim that there are always bargains to be had here - I've lived here 17yrs & it's always been that way. Because of Brexit, people have been under pressure this year to purchase quickly & get here before the end of the year, you can take your time & have a couple of viewing trips, hopefully, before you make a decision.

Changes will take place from January 2021 that even we aren't completely aware of, so take all that on board  + any further help you get on here and you can then move forward with your plans.

Cheers

Elinspain

Hi Russ,

Coincidentally, having responded to your post this morning, I've just been reading this article from ThinkSpain, quoting a Spanish property market analyst, which you may find helpful:

https://www.thinkspain.com/news-spain/32559/post-covid-property-market-temporary-price-fall-and-changing-buyer-criteria-predicted

Kind regards,

Kim

Hi Russ 

Just  my opinion but there will always be some reason to wait. I completed 2 years ago on a property and I am so glad that I did. At the time Brexit was all over the news and there were loads of properties for sale. I was told to wait a bit longer - see what happens with brexit - see if the prices come down - wait for the euro to go up etc etc. 
In the end I went ahead so I’ve had 2 years of getting to know the place and been over loads of times. I’ve had flights for as little as €10 euros there and €15 euros back. Had I waited I would of still been dreaming and not had the outdoor life and chilled breaks of the last couple of years. I’m not bothered if prices have gone down or the euro has gone up just being over there has been good enough for me. 
Good luck. 

Hi Russ, I’ve a view that in real estate anywhere in the world there are properties which will sell and keep their value in almost any market and others that will only sell in a good market.  The market next year looks rough but for me I am upgrading my la zenia property as I’ve been able to buy what I really want for a good price.  If you are ready to buy do it but negotiate better terms as you will be able to do so with less buying competition than normal.  La Zenia has so much going for it, amenities, blue flag beaches and offers fantastic value for money, go for what you really like and negotiate hard would be my personal opinion.

Hope that helps. 

Hi Kimmy, interested in your views re your statement earlier, specifically what would these issues be ?

Ken

 I think it's also clear that there are still many UK citizens who don't understand the implications of Brexit on owning property in Spain, either as a holiday home owner or a permanent resident, and this could add to the amount of property becoming available next year, when the reality of Brexit becomes apparent in practice

Morning Ken,

From this and other fora I belong to, it's clear that there are still many people who don't understand the implications of the new Spanish Residency rules and also Schengen, as they will apply to UK citizens from 1 January 2021.  Even at this late stage, I'm hearing of people for who "the penny has dropped" and have decided to sell up and return to the UK.  There are also people who are saying they're going to sit tight and see what happens in the New Year - if those are people who still haven't regularised their position in Spain (and the EU) legally, I can imagine they will decide - they may have no choice - but to return to the UK too.  Just my opinion.

Kind regards, 

Kim

Morning Kim, thankyou for your explanation.

As a holiday home owner residing in the UK I thought that I was missing something in terms of ownership post Brexit.