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How to buy a €2.8 million property for €350,000 in Spain

Co-ownership of luxury homes – a formula that was born in the United States – is growing rapidly in Spain with several companies emerging to try to popularise this as a way of co-owning a high-end second home at a more affordable price.

Published: 7 May 2022 20:54 CEST
A luxury villa with a pool
A single share in a luxury house could cost the same as that of an entire coastal apartment. Photo by Ralph (Ravi) Kayden on Unsplash

In 2020, American start-up Pacaso sold a $2.2 million villa in California to eight people who paid $275,000 each, each becoming owners of a luxury second home they can enjoy for several weeks each year for a fraction of the price.

And last year, the company landed in Spain, opening in Marbella where it now has three villas.

 
The main client base is international, but “it is taking hold among Spaniards as well,” said Jesús Bravo, co-founder of Secconda, Spanish daily El Pais reported.
The idea behind the business is that everyone would love to have a holiday home, especially if it’s equipped with luxury items, such as a cinema or an infinity pool.
 
The small sticking point, of course, is that not everyone can afford it or if they can, they’re not keen on investing a couple of million in a house that isn’t occupied most of the time.

“Less than 25 percent of homeowners spend more than a month in their second home. The enjoyment of the house is small when compared to the costs and the time that have to be dedicated to its maintenance”, said Juan Carlos Fernández, founding partner of Abriqot.

“People use the second home for a maximum of six weeks, the rest of the time, it’s empty or rented out,” Bravo added.

Just ‘show up and enjoy it’
While co-ownership in itself is not a new concept – it’s existed for decades informally among friends and family – it is becoming more professional now.

So how does it work? The company selects and buys homes and then markets them as co-ownership properties. Once they’ve found co-owners to sell to – the maximum number is eight –  it usually creates a limited company in which the co-owners have a share.

Although the company doesn’t retain any ownership of the property, it does remain on as administrator, offering services, such as financing (this varies between 50 percent with Dalima and 70 percent with Pacaso), alterations, interior design, maintenance, bill payments, cleaning, and so on.

“The co-owner only has to show up at the house and enjoy it”, said Pacaso’s European corporate relations manager Ignacio Alonso.

Of course, this does come at a price. The platforms have a profit margin of around 12 percent, with Dalima – which specialises in ‘affordable luxury’ – coming in at about 5 percent. They also charge for the maintenance and management of the houses: Abrigot, for example, charges a fixed monthly fee of 100 euros per share.

A co-owner can buy from one share – 12.5 percent of the property – up to a maximum of four. The cap is to avoid any one co-owner holding more than 50 percent of the property.
 
The number of days you can use the property is directly related to how much of the property you own, so for example, if you own one share of an Abriqot property you can use it for between 42 and 45 days a year and if you own two shares, it will be double that.
 
This could be a good option for Brits who want to live in Spain and stay under the 90 days, but who don’t want to deal with the problems of what to do with the house for the rest of the year.  
 
If you acquire 50 percent – or four shares – you would be entitled to six months’ use each year. You can sign this over to your friends and family to use, but most of the companies won’t allow you to rent the property out. 
 
After one year of ownership, co-owners can sell their share.
 
“Shareholders have the right of first refusal, so the sale of the stake should be offered to them first,” said Bravo.
 
And Pacaso’s Alonso is quick to dismiss any worries that co-owners may struggle to sell their shares: 
 
“We sell shares in 10 days and with an average appreciation of 10 percent in the first year,” said Alonso, noting that “all the shares sold were because the seller wanted another larger second home in another destination”.
 
Very different concept to timeshares
You book dates via the company’s app.  Each company has their own rules when it comes to booking dates, but they agree on several things:
 
For example, co-owners can reserve up to 24 months in advance; each can have a maximum of five reservations at the same time for different dates; the stays will be for between three days and two weeks; and only one reservation within a 12-month period can include a major date such as New Year’s Eve.
 
Owners can also make last-minute bookings if there are no other reservations for those dates.
 
It’s a bit like having a stake in a luxury hotel as when you arrive at the villa, everything will be ready for you. You’ll be greeted by a full fridge, the perfect ambient temperature and you can book add-ons, such as a chef, a massage or an excursion, too.

“Being able to access a wonderful home for a fraction of what it costs, that is, without having to be a millionaire, is a fundamental factor in the adoption of the model,” Fernández said.

Pacaso would not rule out opening up the business to include “lower-level properties” in future, but they would always seek to maintain “the quality status”, Alonso added.

The idea might seem similar to timeshares, but actually it’s very different – there are far fewer owners and when you buy a timeshare, you don’t ever own a real estate asset.

“A home can be shared by more than 50 people, which means that you only have one week a year to enjoy it,” explained Fernández. 

The type of housing is very different, too.

“With timeshares, they are hotel rooms or poorly maintained apartments,” Alonso said.

The companies to buy through and what’s available
Pacaso paved the way for this new business in the US and operates in the US, the UK and Spain. It sold its first 400 units last year. It currently has three stunning villas in Marbella with shares from 632,379 to 788,688 euros apiece.

Abriqot buys houses valued between four and eight million euros, so the shares are sold at prices between €400,000 and €800,000. It has around 25 properties in Costa del Sol, Costa Blanca and Madrid. A mere €128,000 will get you a share in a villa in Jávea or one in a spectacular villa in Sotogrande for €400,000.

Secconda started up in December 2021 and is in the process of purchasing houses in Levante and Catalonia and is also looking to invest in the Dominican Republic. At the moment, it has a villa in Marbella, with a price of €2.8 million euros, so each share is €350,000. 

Dalima, a recently created Spanish company, is a bit different: its portfolio is made up of “affordable luxury” homes and specialises in houses that cost between €800,000 and €1.5 million. That puts individual shares at  between €80,000 and 150,000, a similar price to that of an apartment on the coast. It has 30 properties, mostly in Alicante. Dalima also allow you to rent the property out through them and use the income generated to cover maintenance costs.

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PROPERTY

BBQs, nudity and plants: What are the balcony rules in Spain?

Though many people hang laundry, plants, and flags from their balcony, in Spain the rules on what you can and can't do on 'el balcón' are not well-known.

Published: 8 May 2024 17:13 CEST
Updated: 11 May 2024 08:31 CEST
BBQs, nudity and plants: What are the balcony rules in Spain?

Imagine the scene: you’ve just bought or signed the lease on your dream apartment. It’s bright and airy, with plenty of space, and even has a nice-sized balcony to get some fresh air on. You can do whatever you want there, right? 

Not exactly. In Spain the rules on what you can and can’t do on a balcony (even if it’s private) depend on a few factors, namely the regional and local rules, as well as getting the approval of the building’s homeowner’s association – known in Spain as la comunidad.

Some of them might just surprise you.

READ ALSO: ‘La comunidad’: What property owners in Spain need to know about homeowners’ associations

There are four main things or activities on balconies that could potentially put you on the wrong side of the local rules and even get you fined: barbecues, plants, laundry, and flags.

In all cases (even if you don’t think you’re breaking any rules) you’ll generally need to consider two things: firstly, does this affect or change the building’s façade? And secondly: will la comunidad allow it?

Barbecues

In Spain there is no national law prohibiting barbecues on private property, so in principle it is legal as long as the barbecue is lit in a private space such as your own balcony, garden or terrace, and not a shared space.

Often in Spain, the roof (usually referred to as la terrazza) is a shared space people use for storage and hanging their laundry, so be sure to check with the comunidad.

In terms of your own balcony, however, although there’s no law saying outright you can’t have a barbecue, you’ll need to take into account the rules and regulations in force in each locality or region. There may also be specific rules within the building that long-term homeowners have developed over the years.

As we will see, many of these low-level regulations are delegated to local governments and town halls in Spain, so the answer to these sorts of questions is usually: it depends where you are.

However, according to Article 7 of Spain’s Horizontal Property Law, “the owner and the occupant of the flat or premises are not allowed to carry out in it or in the rest of the property activities prohibited in bylaws, which are harmful to the property or which contravene the general provisions on annoying, unhealthy, harmful, dangerous or illegal activities.”

This basically gives your neighbours the right to complain about noise, smells, smoke and any possible fire risk in or around their building, which barbecues could plausibly fall under.

As with co-living anywhere in the world, regardless of the regional or local rules, employ some common sense: be reasonable, listen to neighbour’s concerns and take up any disputes with the President of la comunidad.

READ ALSO: What you need to know before having a barbecue in Spain

Plants

Again, with plants the responsibility falls on each local authority to set the rules. In Spain, most regions and town halls state that, as long as the architectural or structural elements of the building are not changed or weakened in any way, putting plants on your balcony is permitted.

However, note that many terraces and balconies do have maximum weight regulations that must be respected in order to guarantee their safety, which is 200kg per square metre. If this figure is exceeded (and it can be proved) you could theoretically be fined.

Laundry

Laundry lines criss-crossing the streets might be one of the more picturesque images of Spanish life, but the people doing it might actually be breaking the rules.

How do you know? You guessed it, it depends where you. You’ll need to check with your local authority on this one, though municipal regulations in Barcelona, Madrid and Valencia all regulate hanging laundry from your balcony, which is again outlined in the Horizontal Property Law.

This principally seems to be because it affects the façade of the building (a common theme when it comes to balcony rules in Spain).

In places with rules about hanging laundry from balconies, you could be fined up to 750 euros if you don’t comply with the rules.

However, according to Foto Casa, even if you live in an area where there are no bans or penalties against hanging laundry on the balcony, you’ll still likely need the permission of la comunidad.

READ MORE: Spain’s weirdest laws that foreigners should know about

What about flags?

Whether it be the Spanish flag, the Catalan, Valencian or Andalusian flags, or LGBT, trade union or football team flags, flags proudly hanging from balconies is another mainstay of Spanish life.

It’s also one of the more controversial ones too, especially within comunidad meetings. Hanging flags on the balcony, as well as allegedly altering the aesthetics and security of the building (the same concern as with laundry) often has ideological connotations that can cause conflict.

Again, as with laundry, hanging flags on the balcony will require the approval of all the owners within the community, something that must be agreed at a meeting, as per the Horizontal Property Law.

However, if the flag is placed inside the property, as it is a private property, fellow homeowners cannot oppose it, even if it is visible from the street, according to Foto Casa.

Nudity 

Article of 185 of Spain’s Penal Code only considers being naked at home to be obscene exhibitionism and sexual provocation if it affects minors, in which case it is punishable with a fine or up to a year in prison.

Therefore, you could technically sunbathe shirtless or naked on your balcony in most cases without getting into trouble, although it won’t necessarily go down well with your neighbours and/or flatmates and you be reprimanded for it.

READ ALSO: Can you go shirtless or wear a bikini in the street in Spain?

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