Spain 15 Oct 2007 12:21 pm
A Second Home in Spain
It’s everyone dream – jetting off the Spain’s endless sunny skies whenever you feel like it, not having to worry about accommodation – and feeling and being right at home as soon as you arrive.
Buying a second home in either Spain or the Canary Islands is a relatively uncomplicated process. There are, however a number of things you should consider, like getting a second mortgage, for example. This is often more difficult than a primary mortgage. Sometimes higher down payments are required too. These are just some of the financial considerations you’ll have to take into account.
Before you start your property search have a look at some of the pros and cons of buying a second home in Spain.
The Benefits of Buying in Spain
Provided you’ve chosen a good quality property in a good location, it should be going up in value every year. Spain has always been regarded as an excellent long-term investment option.
Rental income is the perfect way to pay off a mortgage. The property just pays for itself. Spain and the Canaries are two of Europe’s most popular holiday locations, meaning no shortage of demand for rental properties. On the Canaries, you can rent out your second home all throughout the year at tourist prices.
A holiday in your own “home away from home” is a delightful experience, much more enjoyable than staying in a hotel. Apart from having your own personal comforts and privacy you’ll have a lot more money to spend, having not paid for a hotel.
You could retire to the holiday home. Most people do. After a number of years making good returns through rental income you could decide to have the property all to yourself. By this stage it should have gone up in value significantly.
Thousands of people make the permanent move to Spain every year. Most never look back. It’s warmer, brighter, healthier and safer with a very laid back pace of life.
Things to Consider:
Additional Costs
These are ongoing and can mount up – things like property taxes, utility bills, and community fees etc – the same traditional costs you have to pay on your primary property. Even though you might just be there for short periods of the year, as the owner, you’ll be responsible for all of them.
If you’re going to rent out the property, you need to consider the tax implications – renting can greatly affect your own tax situation, meaning you’re sometimes liable for more tax payments and at other times you’re no longer eligible for certain tax exemptions.
Speak to a tax professional. They can give you advice about your individual situation (good or bad). In Spain and the Canaries there are plenty of English/Spanish speaking consultants.
Holidays
Will you (and your family) really use the place every year?
Staying in your own home is so much more comfortable than a hotel or holiday apartment but if you want to travel to new destinations every year, you might just end up paying for hotels and other services on top of your second mortgage.
Advice
Buying a holiday home in Spain is an incredibly rewarding experience – most UK buyers never look back.
Proper research often determines the success or failure of any local or foreign property investment - research the property, the area and the legal and tax implications. Spend as much time in the area as possible before you take the plunge.
Investing in the future
You might not be in a position to buy a second home now but in a few years time you might be. If you’d like your own home in Spain or the Canaries, the best time to start planning is now. If you remain focused, disciplined and start far enough in advance you too could become the happy owner of a dream home in the sun.
Speak to a financial planner or advisor. He or she should be able to come up with realistic financial targets that can help you reach this goal.