Buying a holiday home abroad: why choose Spain?

Are you looking to buy a second home abroad? Spain is one of the European countries where property investment is most profitable. Indeed, compared to France, Italy and Portugal, Spain allows investors to make interesting investments while benefiting from numerous tax advantages and a low tax system. In addition, Spain has an advantageous climate, magnificent coastlines, an inimitable lifestyle and growing accessibility thanks to very affordable costs.

A very interesting tax system

One of the main advantages of investing in real estate in Spain is that there is no property tax for those wishing to buy a second home abroad. There is no such tax. As far as property tax is concerned, the Impuesto sobre Bienes Inmuebles (IBI), which corresponds to property tax, is much lower than in France: up to -30%!

For example, in Spain, for a childless couple occupying a 100 m² flat, the property tax will be around €400 in Valencia, €500 in Madrid and €600 in Barcelona. The tax savings are estimated at between 100 and 200 €/month compared with France.

Moreover, in some municipalities in Spain, inheritance and gift taxes are virtually non-existent (up to 99% bonus). The seven municipalities that apply this measure are Madrid, the Canary Islands, Extremadura, Cantabria, La Rioja, Murcia and, more recently, Andalusia.

Great buying opportunities

During the year 2020, due to the health crisis linked to Covid19 , second-hand house prices in Spain fell by around 9%. Moreover, the spiral does not seem likely to pick up again with the continuation of the crisis.

For example, it is possible to buy and negotiate 1 m² at €1,000 (Algeciras), €1,500 (Galicia), €3,000 (Malaga) and €5,000 (Madrid or Barcelona). The city where real estate is most expensive in Spain is Ibiza with an average of €6,000 per m². Again, this is a far cry from the 10,000 €/m² in Paris (France) and the 11,500 €/m² in Zurich (Portugal).

In addition, the slowdown in the Spanish real estate sector in recent months has led more and more investors to sell their properties in order to diversify or to obtain liquidity. So not only will it be easier for you to find a home to buy, but you'll also be able to get it at a good price!

A fairly rapid return on investment

Spain has one of the highest economic growth rates in Europe. Buying a second home here is a sure way to make your money work for you.

Indeed, thanks to the strong tourist and annual rental demand, your second home can earn you money if you rent it out. Furthermore, the ever-increasing number of offers to purchase is encouraging the rapid increase in the value of properties.

The capital gains are therefore quite high and will remain so for several years to come in the major Spanish cities. Moreover, thanks to the combination of rental + capital gains, the gross annual profitability in peripheral areas can reach 10%.

In addition, deductions for rental costs are much higher than anywhere else in Europe. As a result, rental profitability is improving and attracting more and more investors.

An attractive climate and a highly diverse natural environment

Spain is one of the most popular tourist destinations in the world. And for good reason, the country has the highest level of sunshine in Europe. On average, the weather here is sunny for 300 days a year! This record amount of sunshine attracts a large number of tourists, all of whom are potential tenants for your holiday home.

Furthermore, Spain has great geographical diversity. For example, cities such as Madrid, Barcelona and Valencia have a cosmopolitan charm that is conducive to professional opportunities. If you are a sea lover, the beaches of the Canary Islands, the Balearic Islands or Andalusia are a real call to relax. As for the cities of Asturias or Galicia, they are full of natural landscapes of great beauty.

A unique cultural wealth

Spain also has an exceptional cultural wealth. Indeed, it abounds in a large number of monuments whose unique architecture attracts a large number of curious people every year. These include the mosque-cathedral in Cordoba, the Prado Museum (Madrid), the Alhambra (Granada), the Guggenheim Museum (Bilbao) and the Gibralfaro (Malaga).

In addition, there are more than 200,000 French-speaking Europeans in Spain. Therefore, if you are looking for a change of scenery, simply buy your second home on the Mediterranean coast and find yourself immersed in the heart of a predominantly French-speaking cultural atmosphere.

It should also be pointed out that Spain is very accessible. Indeed, the country has an important airport network that serves all the major cities of the neighbouring European countries.

It is even possible to travel by train from France to Spain and from Portugal to Spain. As for the journey Italy-Spain, it can even be made by bus.

When you buy a holiday home in Spain, you will never be really far from your loved ones.

A rather low cost of living

The cost of living is relatively low in Spain. For example, the purchasing power of a French pensioner in Spain will be 30-50% higher than in France.

Moreover, financial savings are not limited to real estate. The high level of sunshine means that savings can be made on heating. Better still, in a Spanish supermarket, you can fill up your shopping trolley for just €50. You can also treat yourself to lunch in a restaurant from €10.

As for rent, leisure and public transport, they are generally half as expensive in Spain as in other European countries such as Italy or Portugal. The same applies to the services provided by service providers and craftsmen. The only downside is the very high telephone rates.

Finally, remember that Euribor reached very low levels in July 2020: -0.279%. This is a factor that is beneficial to real estate investment, as it obliges financial bodies to offer potential buyers very attractive credit conditions.