Spain’s PP Government, dubbed the “Pro Property” Party, has play an ace card in its efforts to turbo charge the country’s now recovering real estate market.
From summer 2013, investors can apply for Spanish citizenship, and with it a valid European passport, if they spend a minimum of EUR 500,000 on property purchase in the country. The move is designed to help the jobs and revenue generating property sector recover after six years in the doldrums. This has resulted in the loss of one million jobs and EUR billions in vital tax revenues.
The Spanish Parliament has approved the new Citizen Spain legislation eight months after the idea was first floated in the early months of the PP return to power. Subsequent discussions have raised the minimum purchase from the proposed EUR 160,000 to EUR 500,000, a move designed to attract major investors from the Middle East, Russian, China and India for whom a “European passport” is highly prized and could provide travel without the need for a visa.
Spain’s real estate is now recovering thanks to peak to present price discounts averaging 44% as banks and troubled developers clear their books of unwanted villas and apartments. The toxic sub-prime property has been dumped into SERAP, the country’s new “Bank Bank” at discounts of 65% while the better quality, better located prime property is being offered to foreign buyers with big discounts and generous mortgages.
Foreign investment in Spanish real estate reached an all-time high in 2012 as EUR 5.54 billion was poured into the sector and the first quarter of 2013 is even higher. The money has come from northern European countries and Russia, but British buyers are now becoming more active.
The effects of Spain’s property decline since peak year 2007 have included rising redundancies, increased household repossessions and growing outrage from citizens demanding partial or total debt forgiveness by banks. Protesters claim the banks were partly to blame for the tarnished reputation of the country’s property sector with their reckless spending, easy mortgages and worthless construction guarantees.
Bank property investment specialists, Walker Property Spain have a Citizen Spain service covering Barcelona, Costa Brava, Mallorca and Ibiza “the main areas of interest because of good equity growth and an increasingly strong rental market”. As inward investment consultants to the Government of St Kitts and Nevis, the first country to offer citizenship-by-investment arrangement to high net worth individuals, they saw a strong level of interest that has grown in recent years.
Ben Walker said: “This is a growing trend in attractive and stable countries around the world and Spain can benefit as Europe’s most popular tourist destination. We have luxury apartments in Barcelona, coastal estates and palaces and mansions in the Old Towns of Ibiza and Majorca that are all sound investments and there is generous funding from banking partners that can be used for acquisition or refurbishment or a combination.”
Author: Kevin Barnett, Walker Property Spain