Expatriates looking to purchase properties in Spain have been given a boost following a new tax change introduced by the Spanish government.
The new rule introduced by Spanish parliamentary officials now mean that mortgage tax, which previously was paid by expatriate buyers, must now be paid by the bank financing the Spanish mortgage. The new changes, which have taken effect immediately will dramatically impact on buyers’ charges.
Now new buyers will have a reduced need for funds to cover the costs of purchases, with a reduction of up to 2% in the offing. In the past, the cost of buying a house in Spain, including legal and taxation costs, might often easily amount to 10% of the sale price or even more. Now, this figure is expected to drop by up to 2%, according to Offshoreonline – a UK-based specialist expatriate and international broker offering advice on UK, French, Italian, Portuguese and Spanish mortgages.
‘Welcome and unexpected’
Offshoreonline spokesman Guy Stephenson, called the move a “welcome and unexpected change that benefits buyers who often might struggle to have sufficient savings to pay high notary and tax costs when buying in Spain”.
He pointed that while the credit crunch of 2008 caused Spain’s property prices to crash, since 2014, the market has shown a consistent and solid recovery. And this, supported by strong economic growth in recent years in region has led to a total of 465,000 properties being sold in 2017 – a 15pc increase on the previous year.
According to Spanish bank BBVA, house prices in the country are forecast to rise by 5pc in 2018; rental prices, too, are growing at rapid rates with major Spanish cities such as Barcelona, Palma and Madrid achieving new record-high average rental prices, as more and more homes go up for sale.