Spain’s government recently unveiled plans to give residential status to non-EU foreigners as an incentive to buy real estate from the country’s enormous surplus of housing stock. Estate agents are already using the promise of such a measure to attract buyers from China and Russia to Marbella’s property market, despite the fact the new measure is not official legislation, yet.
Buyers from China in particular have discovered the joy of living at the Costa del Sol. Non-EU property investors buying Spanish real estate for more than EUR 160,000 per unit are supposed to receive residency status under new incentive measures to get the property market going again.
At present some 15,000 new homes await purchase at the Costa del Sol where Russian investors in particular are currently the largest number of non-European buyers, accounting for 5% of all property sales. For Chinese investors matters are little more complicated, as they must overcome many bureaucratic hurdles – guaranteed residency status would make this problem go away and property group Grupo Peñarroya are already speculating on the new measure attracting a great number of Chinese buyers to Spain’s Costas.
The group has entered into partnership with a Chinese agency in a bid to tempt some 100 Chinese investors to purchase homes from the luxury La Reserva estate in Marbella, where around 260 empty new homes await buyers. The estate’s 700 properties range in price from EUR 218,000 to EUR 400,000.
Although the group of Chinese investors, who came to inspect the properties before the end of the year, were urged to make a decision before the Spanish government increases VAT on purchases from the current 4% to 10% next year, they hesitated to buy. For Chinese purchasers the residency issue is a stumbling block and without a guarantee in place, none of them wished to go ahead with a purchase.
Estate agents up and down the Costas hope the Spanish government will hurry to put this new legislation into place – Russia and China are emerging markets with more disposable income than most and their numbers featured largely among this year’s record tourists numbers visiting Spain.
While buying a property in Marbella or elsewhere at the Costa del Sol is fairly easy for European citizens, anyone from outside the European Union faces a number of obstacles. There are two different ways in which property can be acquired, neither one of them are satisfactory at the present time.
Firstly, potential buyers can enter Spain on a temporary tourist visa that covers a total of 90 days. When this tourist visa ends, the potential buyer must return to their country of origin and reapply for a new visa.
Secondly, the potential buyer can apply for a temporary resident’s permit that covers one full year, but involves a number of obligations and stipulations such as a minimum stay of six months in the country, sending children to school in Spain and obtaining private medical insurance, which can be costly.
Spain’s government proposes to increase the temporary residency permit to two years with the proviso that the country’s social services should not be exploited by temporary residency visa holders. Non-EU foreigners obtaining such a visa must be able to prove they can support themselves and their families, while they live in Spain and must also conform to any other stipulations that form part of the temporary residency.
Foreign buyers flock to the Costa del Sol because of the great choice of properties offered at prices resembling 2004 levels. Two to three bedroomed apartments in East Marbella’s sought after Eliviria district are listed for between EUR 180,000 and EUR EUR 280,000 in developments located within 5 minutes’ drive of Santa Maria Golf Club – many of the properties are bank repossessions offered with 95% financing.
At Los Monteros upmarket developments, some of which form part of the Santa Clara Golf Club, estate agents offer two and three bedroomed apartments with 3 bathrooms for prices around EUR 425,000 to EUR 485,000. The properties are within walking distance of a beautiful 18 hole 72 par golf course, have 24 security and controlled access to the community and offer living in accommodation that is not just spacious but positively oozing with luxury.