Spain remains a popular holiday destination for many Belgians. More and more citizens are heading south to buy real estate there. But what should you pay attention to when buying a holiday home in Spain?
The latest official report on real estate transactions for foreigners in the Spanish province of Alicante shows that Belgians are now the main buyers of real estate there. Our country has recognized this in the United Kingdom. It is true that the British buy more homes than we do, but the amount of the Belgian’s investment is greater.
As noted by Carl Vorsselmans of Nieuwbouw in Spain, a real estate agent specializing in Spanish real estate, Spanish real estate is increasingly going to the taste of Belgians. It seems that “since the beginning of 2021, we have felt that people want to buy a home in Spain as quickly as possible.”
Warm climate and additional purchasing power
“Based on our customer base, we can say that the majority of property buyers are buying a Spanish home to enjoy,” Vorsselmans confirms. “We have noticed that there is a huge demand for homes in the so-called AAA locations. In the past, people were mainly looking for homes in their own country, but due to internationalization, more and more people are thinking of investing in foreign properties. Location plays an important role in this” .
According to Vorsselmans, there are many reasons why people are looking for a vacation home in Spain. “It is clear that a good climate plays a decisive role. But we must not forget that getting to Spain is very easy. There are many flights to the southern holiday destination. You can fly to Spain from Brussels, Ostend, Durn and Charleroi.”
He also remembers that life in Spain is cheaper than in our country. “In principle, this way you see your quality of life increases, because your purchasing power increases,” Forselmans says. He also adds that real estate prices on the Spanish coast are on average lower than on the Belgian coast. Spanish property prices have risen systematically since the 2008 crisis. We expect this trend to continue in popular destinations. The rise in commodity prices is likely to have an impact on real estate prices.”
Moreover, the lower interest rate on the mortgage makes financing such a purchase cheaper. The government in our country has learned that the interest on a home loan for 25 years and the ratio (the ratio between the loan amount and the present value of the home) above 80 per cent fluctuates around 1.8 per cent. interest rate scale.
What should you pay attention to?
If you dreamed of a house or apartment on the Spanish coast, then you should take into account a number of things. For example, Vorsselmans says that purchasing costs in Spain can vary greatly depending on the region in which you buy a home. “Spain is divided into different regions that define their own tax rules. For example, the value-added tax on new construction in the Canary Islands is 7 percent, while it is 10 percent on the mainland.”
Moreover, you should not forget that in Spain you have to pay taxes on rental income. This rate is 19 percent for non-residents. In addition, you have capital gains tax. It is not limited to time, as in Belgium. In our country, you pay capital gains tax (16.5 percent) if you sell a second home within five years. Therefore, some people are shocked that they will tax capital gains if they sell the house after several years.”
Finally, he warns that the profession of real estate agent is not regulated in Spain. Of course, this can involve some risks. “It is therefore important to educate yourself well before engaging in a Spanish real estate adventure. This way you will not encounter unpleasant surprises”, concludes Vorsselmans .
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