After months of speculation, the Spanish government has given the go ahead for a new law granting automatic residency to non European Union nationals buying property worth at least €500,000. The law, set to be enacted in the coming months, provides certainty for estate agents in Spain targeting non EU customers, particularly the Chinese and Russians who are increasingly interested in investing in property in Spain.
The new law puts Spain on a par with Portugal but behind Cyprus which has a minimum investment of €300,000 to qualify, and Greece at €250,000. Barcelona based estate agency Lucas Fox has reported a sustained increase in Russian, Chinese and Asian buyers in the last few years. In 2012, approximately 90% of sales at Lucas Fox came via foreign buyers, and around 30% of those were to non EU clients.
In anticipation of the surge in demand, Lucas Fox have set up a new company called Residency in Spain in conjunction with a specialist Spanish law firm to provide advice and support to clients who want to get residency permits in Spain through investment in residential or commercial property. ‘We think this law is a positive move and will encourage investment in Spanish property from non EU buyers. We are also pleased that the government has opted for a higher threshold which fits the profile of the majority of our buying clients,’ said Lucas Fox director Alex Vaughan.
‘Now is a great time to buy in Spain as prices in prime areas are extremely attractive and this has been reflected in an increased number of transactions so far in 2013. Prior to this announcement the new legislation was already generating a great deal of interest and once the law goes through we expect a big increase in the number of non EU buyers coming to Spain hoping to take advantage of market conditions and the chance of obtaining Spanish residency,’ he added.
Quote from PropertyCommunity.com : “Bargain prices in some areas of Spain are attracting more overseas buyers and in the luxury market the introduction of a residency visa for non European Union nationals is awaited with bated breath.”
Lucas Fox recently welcomed a delegation of Chinese investors to Barcelona and Ibiza, which signalled the potential impact of the new residency law on the Spanish property market. A number of them put down reservations for apartments and further trips for larger groups are being organised for July and September.
Figures from the Bank of Spain show that overall foreign investment in Spanish real estate increased by 17% in 2012, to the highest level since 2004, and the trend is expected to continue in 2013. The British, Russians and Norwegians make up the largest contingent of foreign buyers. Foreigners spent €5.54 billion on Spanish property last year, up from €4.7 billion in 2011, and a 52% increase compared to the total of €3.6 billion in 2009. Overseas buyers bought €1.8 million worth of property in the last quarter of 2012, a 56% increase on the same period in 2011 and up 92% compared with the final quarter of 2010.
Figures released by the government also show record sales of property among foreigners resident in Spain in the first quarter of 2013 with 8,500 homes being sold.