Spain plots 100% property tax to prevent new expats from buying homes 🇪🇸

escaped

Do the properties in Spain actually make much profit when it comes to selling though? I thought they sold pretty much for the price they were bought for, or even less. Whereas in the UK property increases in value, sometimes at an alarming rate, so are more of an attraction to wealthier buyers and less attainable for local people.

I have a friend (British, but now with Spanish citizenship) who moved to just outside of Malaga, near the coast, in a 2 bed flat she purchased outright for £65,000. Similar flats, 7 years later, are selling for £165,000.

I also have a friend who had a holiday appartment, on a lovely complex, in Turkey, purchased approx 11 years ago, 3 beds, 2 baths, and 2 fabulous terraces, bought for £68,000 now worth almost £200,000.

Wheniwasyourage

I was thinking more of people who actually want to come here to live, Lathyrus3, not of the investors you mention. I always find the use of the term "expats" for Brits who want to move abroad an odd contrast with the term "immigrants' for people who want to come and live here.

Entirely agree

PS I only kept my apartment for 5 years, 2006 - 2011, and that was at the time of the economic crisis.

Interesting, thanks.

Ooo, that's great, Pantglas2. You did well.
The plus-values on my apartment in France was minimal, barely 2%. My business properties, however, made a good profit. Luckily we were able to say the latter were our main residence/s!

I think it depends escaped.
Our tiny apartment would fetch double what we paid for it 21 years ago. Our communal gardener Cesar told me in November when we were last out that small properties near to good transport into Málaga city (train station is a 5 minute walk) are selling like hot cakes - either as starter homes for the young or 2nd holiday homes for especially Scandi’s who have great pensions.

We recently sold our property in Spain, Escaped, and made a tidy 60% profit and friends who sold last year made similar gains.

Do the properties in Spain actually make much profit when it comes to selling though? I thought they sold pretty much for the price they were bought for, or even less. Whereas in the UK property increases in value, sometimes at an alarming rate, so are more of an attraction to wealthier buyers and less attainable for local people.

Freya5

HousePlantQueen

Nice double there for you FGT; lots of immigrants from non white countries, and a Socialist administration. You immigrants expats must be worried

You do know the difference between expat and immigrant don't you ?The main difference between an expat and an immigrant isthe length of time they intend to stay in a new country:

Expat

A person who lives outside their home country for a limited time, usually for work.Expats may or may not intend to return to their home country.

Immigrant

A person who moves to a new country with the intention of settling there permanently.Immigrants may eventually seek out citizenship.

That is the THEORY Freya. The reality is that most anglo-saxon immigrants, call and consider themselves expats, even after decades in the country they moved to. And most foreigners who are not anglo-saxon, in the UK, are called immigrants, even when they are 'expats'.

Freya5

HousePlantQueen

Nice double there for you FGT; lots of immigrants from non white countries, and a Socialist administration. You immigrants expats must be worried

You do know the difference between expat and immigrant don't you ?The main difference between an expat and an immigrant isthe length of time they intend to stay in a new country:

Expat

A person who lives outside their home country for a limited time, usually for work.Expats may or may not intend to return to their home country.

Immigrant

A person who moves to a new country with the intention of settling there permanently.Immigrants may eventually seek out citizenship.

I am perfectly aware of the difference between an expat and an immigrant, thank you, Freya5, but during the high energy pre-referendum days, it appeared that many were not aware of the difference. The EU citizens, working here during the halcyon days of free movement, were very often referred to as 'immigrants', even though they did usually fit into the definition of expat.

To me it means 100% on the real estate purchase. So, if I want to buy a place for 100,000 euros, I've got to pay 200,000 euros.
In a way, I'd rather do that at the outset rather than be clobbered with taxation problems at a later date when selling.

Sorry for being a bit daft- but what does 100% property tax mean? Is that at the time of purchase, or on the profits above paying price, when you sell. Simple exemples would be welcome, thanks.

I think remote working offers a solution for many, I know a lot round me who do that. I’d love to see more enterprise in small towns, what seems to do best here are niche businesses - and trades, of which there are not enough people for the amount of work. There is no easy answer, as there isn’t in Spain, but I think many Spaniards must feel the same as those of us who live in tourist areas in the UK do about the impact of mass tourism and home ownership by outsiders on their lives.

Yes I’m well aware of those situations and certainly wouldn’t want locals not being able to afford houses while properties are empty.
One of the big issues is employment, where are the jobs if not in hospitality. Many of the rural skills are now automated and if the houses are available to buy who is going to buy them.
The answer may lie in economic revitalisation of rural areas.

I live in a tourist area in Wales (Brecon Beacons), and what is happening here is that the visitor numbers remain high, but many more people who stay are choosing camping, a caravan or the Youth Hostel as a means of keeping their budget in control - and they are spending less in the restaurants. Our Aldi has never been so busy.

J52 here’s an alternative viewpoint;

The 2021 census revealed that around 70,000 addresses were used as holiday homes across England and Wales. In some areas, more than 1 in 10 addresses were being used as holiday homes.

The demand for second homes in coastal areas, or near national parks has caused house prices to soar. Locals have complained that they’re priced out of their towns, blaming holiday lets for raising house prices.

In many tourist hotspots, house prices don’t reflect the income of locals who can’t afford to buy. In Coniston, in the Lake District, average house prices are £608,222 but average annual earnings across South Lakeland were £26,193 in the year to September 2021, ONS figures show.

If locals can’t find anywhere affordable to live in second home hotspots, this leads to a shortage of workers to staff the pubs, cafes and shops.

Second home hotspots are often like ‘ghost towns’ in the off-season because owners don’t visit and the rental market dries up. This has seen communities where local services are cut back or closed.

Locals also struggle to rent, as there are not enough properties for long-term rental. This is because landlords have switched from buy-to-lets to holiday lets because landlords can earn more money, pay less tax and there’s less legislation.

I agree that following the cost of living squeeze, people are spending less. Here are some quotes from traders in Tenby.

Becky Munn, who has been running her shop Cariads since September, described the 200% as “incredibly high” and said she had seen a "huge increase" in properties that are second homes going up for sale as a result.
The less properties that are available for people to come and visit the area, it takes away the opportunity for people to spend money in the area,” she said.”
“Matthew Ronowitz, who owns a restaurant in the centre of Tenby, said second home owners were “a big chunk of our trade.”
“Emma Downey, who owns Tides Kitchen and Wine Bar in Newport, Pembrokeshire, said as well there being a high number of properties on the market, visitor numbers to the town also fell over the summer.”

I have nothing to do with Tenby myself, but the issue was in the news last summer as the 100% increase was a year in and evaluated.
Yes you’re right that other councils are charging up to double council tax for holiday homes. For example Bath, North Devon, North Norfolk and East Devon to name a few.
Just say that the obvious solutions bring their own problems.

J52

A lot of Local Authorities have taken up the option to charge second home owners double council tax on their properties. Regardless of whether they are let out or not. Tenby is one, but has found that local spending by visitors has gone down. Owners who visit are recouping/ saving money by not eating out. Holidaymakers are being charged more for rentals and have less spending money.

I’m not sure that’s the specific reason why people are spending less. If you looked at a comparable resort in England, the picture would be the same. Hospitality is struggling, because people no longer have as much disposable income.

A lot of Local Authorities have taken up the option to charge second home owners double council tax on their properties. Regardless of whether they are let out or not. Tenby is one, but has found that local spending by visitors has gone down. Owners who visit are recouping/ saving money by not eating out. Holidaymakers are being charged more for rentals and have less spending money.

Many such homes are no longer bolt holes for the well to do but investments as part of a property portfolio with the properties being Airbnb/holiday rentals.
That's part of the problem, and Airbnb certainly has a lot to answer for.
In addition to that, the falling birth rate in tourist areas especially isn't helping the economy in those areas. Here in Cornwall and Devon, we have one of the lowest birth rates in the country, and of course this makes for a different demographic with problems finding people to work in agriculture, fishing and tourism. I'm guessing that could be similar on the Costas?

Second homes, particularly smaller ones, cause lots of problems in this rural part of Scotland. Four close members of my family - and their children - are unable to get homes in the village where they were brought up. The school struggles to keep enough numbers to stay viable and, meantime, large numbers of houses and flats remain empty for long periods. I do know of a couple of non-UK second homers, but most are British.

Second home ownership is causing huge problems for people living in Cornwall and parts of Wales where locals cannot afford to live in their own towns/villages anymore, is the same problem Spain is encountering, but the majority of second home owners in Cornwall and Wales are British. Many such homes are no longer bolt holes for the well to do but investments as part of a property portfolio with the properties being Airbnb/holiday rentals.
The government do need to do something about this.

I don't know Spain at all well, but my thinking is that this was inevitable after the past decade or so. Just like the 20% VAT on school fees, it's probably gesture politics to influence public opinion. I agree, there is a need fornsomething to be done, but I'm not sure this proposal/plot (Telegraph's wording), will make any great difference.

As I’ve said before on GN, I believe second home ownership is wrong - in whatever country. It inflates property prices, making ordinary property unaffordable for the local citizens.

If people wish to visit other areas / countries there are hotels, which contribute to the local economy through employment far more than second homes standing empty much of the time.

Until everyone has an affordable roof over their head, I believe no-one should have the right to own more than one home.

Freya5

Think we should do the same. Just think all those empty flats in our cities bought out by foreigners and left empty,probably solve our housing problem in one fell swoop.

Yes!