The Spanish dream: sun, sea and returns
Spain, with its beautiful beaches, rich culture and wonderful climate, has long been a dream destination for many. But did you know that investing in Spanish real estate as a Belgian can also be a smart financial move? In this comprehensive blog post, we discuss the benefits of buying property in Spain, the different types of investment, the steps you need to take to realise your dream investment, and additional tips to maximise your investment.
Why invest in Spanish property?
High house price growth: The Spanish property market has been recovering strongly in recent years. Prices have risen, but there is still a lot of potential for growth, especially in popular tourist areas. The Spanish Central Bank predicts steady growth in property prices in the coming years.
Attractive rental income: Spain is a top tourist destination, with more than 80 million visitors a year. This means you can earn good returns by renting out your property to tourists. The average rental income in Spain is around 7%, with peaks of up to 10% in popular tourist areas.
Favourable tax benefits: The Spanish government offers several tax benefits for foreign investors, such as a reduced rate on property tax (IBI) and exemption from capital gains tax (IRPF) in certain cases.
Low cost of living: The cost of living in Spain is lower than in Belgium, allowing you to keep more from your rental income. The cost of food, transport and utilities is on average 20% lower in Spain than in Belgium.
Personal enjoyment: You can enjoy your property yourself during your holidays in Spain. This turns your investment into a double profit: you enjoy returns and your own holiday home.
What types of property investment are there?
Holiday homes: This is the most popular type of property investment in Spain. You can buy a flat, villa or house in a popular tourist destination, such as the Costa del Sol, the Costa Blanca or the Balearic Islands, and rent it out to tourists.
City flats: Apartments in cities such as Barcelona, Madrid and Valencia are in demand by tourists and expats alike. This can be a good investment if you are looking for stable returns and a diverse tenant base.
New construction projects: Investing in new construction projects can provide higher returns, but there is also more risk. Make sure you choose a reliable developer with a good track record. New construction projects may also qualify for additional tax benefits.
Commercial properties: Investing in commercial properties, such as hotels, restaurants or shops, can be an interesting option for experienced investors. However, this type of investment requires more expertise and capital.
How do you invest smartly in Spanish property?
Do your research thoroughly: Read blogs, forums, and news articles about the Spanish property market. Compare prices, locations and yields of different property types.
Determine your budget: How much do you want to invest? Take into account the purchase price, notary fees, estate agent fees, furniture and furnishing costs, and unexpected costs.
Choose the right location: The location of your investment is crucial. Choose an area with many tourists or expats, good infrastructure, and potential value appreciation.
Find a reliable estate agent: A good estate agent can help you find the right property, negotiate the price, and arrange all the formalities.
Seek legal advice: It is important to seek legal advice before buying a property in Spain. A lawyer can help you understand the purchase agreement and protect your rights.