The Spanish Statistics Institute has released figures for November 2018 Housing Sales. Nationwide, the Land Registries have been more active than the same time last year. Up by 9.4% on figures for November 2017. Of this number, sales have increased by 2.8%.
Winners and Losers
The highest number of transfers of ownership / title, (measured per 1,000 inhabitants), were in Rioja (723), Castilla y León (718) and Valencia (610). Whilst the highest variations in rates occurred in Madrid (21.7%), Cantabria (19.6%) and La Rioja (19.4%). Conversely, Aragón (-11.7%), Illes Balears (-6.0%) and Extremadura (-4.4%) registered the lowest annual rates. With respect to registered housing sales, the Autonomous Communities with the highest number of transfers per 100,000 inhabitants were Valencia (168), Rioja (144) and Cantabria (128). The Balearics (-7.2%), Andalucia (-5.9) and Extramadura, (-5%) all performed lower in November 2018 compared to the same month in 2017.
Stats for Andalucia – Gifts and Inheritances
Overall transfers were up 10.6 % in Andalucia compared to November 2017, but as this includes all transfers including gifts and inheritances as well as life interests and such, the increase is to be expected.
Changes in Inheritance Tax exemptions introduced in January 2018 created a sea change where beneficiaries could afford to accept their inheritance. Statutory Succession Laws apply in Spain for Spanish nationals – both intestate estates and for those who leave a Will. Spanish law assesses the estate of the individual who will receive the post humous gift. Unlike in the UK, for example, where it is the state of the deceased that is assessed. Andalucia has increased its exempt threshold for beneficiaries closely related – for example children. In such cases, the first million euros of personal assets are exempt now when assessing tax liability for the inherited asset. This, unsurprisingly, has led to many more individuals taking on their bequests.
Andalucian Property Sold November 2018
The figures for sales in Andalucia are down 5.9% on November of last year. Some of the absolute bargains have been mopped up – although there are still more out there. The most likely reasons for the fall in sales are Global rather than National. Uncertainty with the tariff import wars between the US and China and, of course, the UK leaving the European Union (Brexit). However, in general terms, the outlook is positive. The month of November 2018 saw 13,202 sales of land and urban property and 1,774 in rural areas of Andalucia. The total number of dwellings sold was 7,950, of which 1,516 were new builds.
The national statistics for all of Spain are again positive news for the ongoing recovery of the property market. In July, 169,683 properties were registered at land registry, 14.5% up on the same month of 2017.
Of these the number of property conveyances was 89,092, which is an annual increase of 13.5%.
Sales registered at Land Registry
The breakdown of rural and urban properties shows a high percentage of urban property sales in July of 87.8% and 12.2% for rustic properties. Among urban properties, 58.7% were housing sales. In July, the number of rustic property sales was up by 8.3% year on year, while that of urban properties rose by 14.3%. This was an annual increase of 16.2% for urban property.
Council Owned and Private Property
In July, 90.5% of the dwellings transferred by sale were free-market dwellings and 9.5% had protected affordable housing status. In annual terms, both the number of free-market dwellings transferred by sale and that of protected dwellings increased by 16.2%.
New and Resale Properties
In July, 16.9% of the dwellings transferred by sale were new and 83.1% were used. The number of transactions on new dwellings increased by 11.4%, while that on used dwellings increased 17.2% as compared with July 2017.
Figures for Andalusia July 2018
There were 27,743 property transfers recorded in the land registries for July 2018 and of these, 8,730 were free market sales. In percentages, this shows an increase year on year of 20.4%. This equates in Andalusia to 132 transfers per 100.000 inhabitants for sales. And 421 per 100,000 for transfer of title as a result of inheritance, free market sales, and other changes in property title. Andalusia came just a little above the national average, significantly below Aragón (32%) but only 6 – 7 percentage points lower than the next top performers Galicia (28.6%) and Castilla–La Mancha (27.1%).
These statistics show the supply and demand for holiday accommodation in June 2018 both nationwide and in Andalusia. More than 12.2 million overnight stays are great news for property owners interested in short term lets. This is slightly down on last year, but still shows strong demand.
Broad Stroke Figures Nationwide
The national statistics for overnight stays in non-hotel tourist accommodation are down by 3.8% in June compared to the same month of 2017. Yet, even so, numbers exceeded 12.2 million in June 2018 Figures may be marginally lower for several reasons including staff strikes at airlines and the heat wave which is affecting many countries this year.
Overnight stays in tourist apartments decreased by 8.1% in June. Those of residents decreased by 5.2% and those of non-residents by 9.0%. The average stay was reduced by 4.8% compared to June 2017, standing at 5.3 overnight stays per traveler. In June, 37.9% of the places offered by the tourist apartments were occupied, 7.1% less than in the same month of 2017. The occupancy rate by beds on weekends stood at 41.2% , with a decrease of 5.8%.
Touristic Apartments – INE Spain and Andalusia
Resident and Non Resident Overnight Stays
These figures are further broken down into Resident and Non resident occupancy of accommodation.
Overnight stays of residents decreased by 0.3 % and non-residents 6.0%. The average stay is 4.3 overnight stays per traveler. During the first quarter of 2018, overnight stays decreased by 2.9% with respect to the same period in the previous year.
Visitors to Andalusia – both Residents in Spain and Non Residents in Spain showed healthy figures in June 2018, up year on year to those of 2017. 2018 has been a success for many owners who offer short term lets.
It goes without saying that our advice when buying a property is to also take into account the short term holiday market and depending on where you buy your investment property, also consider the business community who make overnight stays for business purposes.
Rural Tourism Inland Andalusia
Statistically, the Spanish National Statistics Institute looks at 2 categories that affect ordinary small investors: Tourist Accommodation which is coastal usually – for example Sotogrande, and the rural sector, such as Jimena de la Frontera.
Contact us to buy or sell properties. We also offer long term lets for rental.
Protect Yourself with those Property Bargains in Spain.
It can be nerve racking or a breeze buying a property in Spain. We are an agency in Andalusia and different autonomous regions have slightly different taxes but all require 3 main things: a foreigner’s tax number called an NIE number, Title Deeds signed before a Notary and Land Registry of the property purchase.
An NIE number is something you get from the Police Station. If you use a lawyer for your purchase they will get this for you or you can apply yourself. Here are a couple of examples of how to fill the form out and each line translated. The reason for needing an NIE must also be stated.
There was a time when properties were sold for two different prices, coyly known as ‘A’ and ‘B’ monies. The ‘A’ price was on the Title Deeds and the ‘B’ was cash in hand counted with spit dampened fingers far from the Notary walls. Even today the Spanish tax office turns a blind eye on a 15 – 20% difference plus or minus from the normal market price. Don’t be tempted though. In general, they don’t trust you and suspect something is afoot if you get too much of a good deal or agree to a bad bargain on your part. A Buyer will end up paying tax on the amount the government thinks the property was really sold for, the imputed amount. The only way to avoid it is to get a property valuation done and take your claim to court. Costly and time consuming if you lose.
For those of you interested, the imputed amount or REAL VALUE is based on coefficients from town halls, the Title Deed Price and the Cadastral Reference – based on sometimes outdated surveys of land boundaries. By or before July 2018 a land law reform is being introduced. Current recommendations by a government commissioned think tank is to change the REAL VALUE to reflect only the Title Deed Price. Another idea being mooted is to start charging a local capital gains tax on rural properties as well as the current policy of applying it to urban properties on gains from selling your property.
As we’ve seen, sales have picked up, still not a high percentage of conveyances, although slowly improving. The years of recession from 2007 hit Spain well below the belt with repossessed properties and ghost towns of brand new housing estates. In the noughties so many people were dependent in one way or another on the construction industry. When it ground to an almost complete halt, so too did the country. Fortunately, people and things evolve; no-one wants to return to those dark days, but the unscrupulous soon left the industry – why would they stay? There were no longer any rich pickings. The agents and agencies that managed to hang on in there during the lean times came through with a limp and a smile. Many, like TMT Spain Real Estate, offer more to Buyer and Seller as a matter of course. We feel we have a duty to explain and inform, both to our clients selling and the applicant looking to buy. Clearly, both form part of the same process. Naturally, we believe we always have done and our team have transferred skills and knowledge accrued in other professions as well.
What is an Agent?
An agent is just that, an entity acting on behalf of another. When it comes to properties the relationship is a tad contrived. The Buyer is usually an interested party whilst our client is almost always the Seller – but both come together in a bargain of offer, acceptance and consideration. The process can be incredibly fast or proceed slowly and cautiously. We don’t mind, we’re there to help however long the journey. Our local knowledge and connections are relied on by Seller and Applicant alike. Whether it be by acting merely as a de facto tourist information service – every Estate Agent recognises that function, or making sure you understand how properties are bought and sold. Our neck of the woods is the autonomous region of Andalusia, Spain.
Buying & Selling Resale Properties in Andalusia.
There are many more Resale properties on the market than new builds, but you can once more see cranes along the skyline. This is happening because of unfinished promotions being revamped and also due to brand new green field sites being built – both courtesy of new Land Law Legislation for Developers and Promoters to take the plunge and invest in Spain.
If the house you want to buy has had others living there already, a Resale, termed ‘second-hand’ in Spain, you need to check the following documentation:
Title Deeds. Make sure the person selling the property really is the owner or authorised to sell. We check this as part of our general due diligence when we list a property.
Ownership and status of housing charges. (Simple Note of the Property Registry). For this you need to ask for ‘Datos Registrales’ which give ‘Finca, Tomo, Libro & Inscripción’ stating what the property registration number is and where it is filed – both literally and in which district. This information is on the Title Deeds or a copy of a ‘Nota Simple’
Last annual IBI receipt (Council Tax or Urban Tax, Impuestos Bienes Inmuebles).
Community of Owners’ receipts proving that the seller is up to date with payments of shared community expenses. (It’s a proprietor owned management company.)
Latest receipts of utilities: water, electricity, gas, etc.
Completion on Property. If the conveyance follows the normal convention the Seller pays the costs of cancelling his/her mortgage and the bulk of the Notary costs for drafting the new Title Deeds. The Buyer pays for the Title Deed copies, registration fees and, as appropriate, VAT or Property Transfer Tax. However, it is not mandatory to follow that convention although common.
The Buyer should allow approx. 12% – 15% on top for costs. You pay Stamp Duty, Transmission Taxes, Notary Fees and Land Registry Fees. Plus, lawyer’s fees should you decide to instruct one. (It is not obligatory.) In the past, you also had to pay the mortgage lenders’ Notary and Stamp Duty costs for putting the mortgage in place – which with the admin fee added up to about 4% of the amount borrowed. But this practice has been ruled out by the Supreme Court as an unfair contract term and now you only pay an admin fee on taking out the mortgage and any costs that fall directly to you. Those who paid this in the past can claim back these costs providing the mortgage is still in place or was paid up in the last four years. Refunds in Andalusia are on average 4,313 € according to the property portal Idealista and Legal Services Provider, Reclamador. (a ‘crowd complainer’ platform,). The protection available for the consumer does serve to underline how the legislature has acted to inject confidence in the property market once more.
Property Taxes are levied against the price of the property as stated in the Title Deeds. At the time of writing, assuming no special cases, THE BUYER pays 8% ITP on a property up to 400,000 €, 9% from 400,001 € up to 700,000 € and 10% thereafter.
Garages and Parking Spaces in Underground Garages can either have a separate Property Title Deed or be annexed to the Residence’s Title Deed. For separate Deeds it’s 8% tax up to 30,000 €, 9% to 50,000 € and 10% thereafter for a maximum of 2 garages or parking bays. Make sure you know which parking space belongs to the house or apartment that you are buying, it’s an area that can sometimes be overlooked. The applicable Property Taxes are the same as for properties when sold in the same Deeds.
Property Sellers are responsible for:
Certificate of Energy Rating. ‘Calificación Energética’. Drawn up by an architect evaluating the energy consumption of the dwelling. In Andalusia, almost all resale properties rate as Grade E, with Grade A being the highest, it may not be perfect, but it is normal.
Town Hall Capital Gains Tax – Incremento del Valor de los Terrenos de Naturaleza Urbana (IVTNU), more commonly known as plusvalía municipal. The clue should be in the name – you have to make a capital gain to pay this. But many local authorities have been exacting payment form Sellers even when they sold at a loss, basing the value on the cadastral reference as well as the old inflated market prices and opting for whichever price was higher. Note, a Supreme Court decision enshrined in law 15th June 2017, has made it illegal for town halls to invoice Sellers for this if they have sold their home at a loss. People who were forced in the past to pay it despite making a loss can now claim this tax back from the Town Hall. It’s an odd remedy called a revocation process (Procedimiento de revocación.) What makes it strange is how the decision to go ahead with the claim lays in the hands of the local authority. (IKR.) Court decisions are now starting to create their own precedent.
Buying Off Plan or New Builds confirm the following:
Works Licence in place
Bank Guarantee to protect in case developer goes belly up
Occupancy Licence issued before completion
Building Specifications have been adhered to
Stage Payments where appropriate coincide with actual completion of construction stage as described
Snagging List done and signed by both parties
Utilities supply and connection paperwork formalised
Value Added Tax is 10%
Other than that, enjoy your home in the sun, next to a pool in summer and a wood burning stove in winter.
There’s never been a better time this decade to move home or shuffle portfolios.
And if you are looking to buy or sell a property in Southern Spain, get in touch with TMT Spain Estate Agents – we’re happy to help.
The sales prices published on this Website do not include any costs or taxes. The information supplied has been prepared to the highest standards, however, the details are for information purposes only and are not binding. TMTSPAIN Inmobiliaria. Ctra del Corchado, 2, San Pablo de Buceite, Cádiz (Spain) • Telephone 956 642 171
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