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PROPERTY

Spanish property roundup: Renting on a temporary basis and cheap medium-sized cities

In this week's property news roundup we cover the growing popularity of temporary rentals in Spain, the medium-sized cities with the cheapest properties and the latest on rental allowances and tax deductions for renovations in 2022.

Published: 4 January 2022 17:04 CET
Updated: 9 January 2022 05:12 CET
Murals on a building in Madrid, Spain's capital.
Murals on a building in Madrid, Spain's capital, where house prices grew 3.4 percent in the final quarter of 2021. Photo: levi sun/unsplash

More people in Spain are renting

Spain, a country where buying a property is considered almost a rite of passage as well as a safeguard for the future, has fewer homeowners than 10 years ago, according to the latest Eurostat data.

The percentage of people who own their homes in Spain has gone from 79.8 percent in 2010 to 75.1 percent of the population in 2020, 4.7 percent less in a decade. 

Spain is the third country in the European Union in which the number of homeowners has fallen the most in ten years, behind Denmark, where it has fallen by 7.3 percent to 59.3 percent in 2020, and Lithuania, with a drop of 5 percent, to 88.6 percent.

This reflects the growing trend in Spain for people to rent rather than buy, more due to necessity in an unstable job market with rising housing prices than through personal choice. 

The percentage of the population that rent in Spain has gone from 20.2 percent in 2010 to 24.9 percent in 2020, a figure that’s still far from the rental rates of Germany and Austria, which lead the way in terms of rental housing in Europe. 

Ten million properties in need of a revamp

That is the estimated number of properties in Spain in varying degrees of disrepair, as provided by Ángela Baldellou of the 2030 Observatory of Spain’s Higher Council of of Architects.

Spain only renovates around 0.8 percent of them a year, but as part of the €3.4 billion in EU recovery funds allocated to the country in 2022 this rate should increase to 3 percent. 

Property owners and prospective buyers in Spain will be able to claim a tax deduction of up to 60 percent for energy-efficient renovations this year. 

When this offer will be made available to homeowners depends on the region but overall it’s expected that homeowners across Spain will be able to apply in January.  

READ MORE: the home improvements you can get a 60 percent tax deduction for

€250 monthly rental allowance soon available 

Last October, Spain’s Prime Minister announced his government would launch a housing scheme whereby 18 to 35 year olds who earn below €23,725 gross per year would be able to get a monthly discount of €250 off their rent.

This youth rental voucher will be available in the coming weeks and will be retroactive from January 1st 2021, meaning that even if it’s delayed until February, applicants will be able to claim their discount from January’s rent. 

This is according to sources from the Ministry of Transport, Mobility and Urban Agenda cited by Spanish news agency Europa Press.

The most vulnerable families will receive extra state aid to cover “up to 40 percent” of their monthly rent.

The income limit of €23,725 gross earnings a year amounts to wages of around €1,500 net a month. 

Growing popularity of temporary rentals in Spain

Although homeowners usually need any extra money they generate from rent, they don’t always like the idea of ​​having to leave their home to tenants to live in for years. 

On the other hand, short-term rentals through Airbnb and similar platforms can be rather laboursome for the income they generate. 

Is there a way a Spanish homeowner can rent out their property for a few weeks or months without having to fully commit to a long-term tenant or sign a contract?

Yes, temporary or seasonal rentals are proving the perfect solution for many second home owners as well as for renters such as foreign digital nomads, Master’s students or other professionals. 

In cities such as Barcelona, the drop in tourists and rent caps in the city have led this temporary rental trend to shoot up in recent months as landlords and tenants both look for more flexibility. 

Platforms such as MyRentalHost, MySpace or Youhomey are making it easier for such arrangements to go ahead with a third party ensuring everything goes according to plan.

The medium-sized cities with cheapest properties in Spain

Spanish ‘big data’ platform Brains Real Estate have crunched the data for Q4 of 2021 and unveiled which medium-sized cities offer property buyers the best value for money. 

Some you’ll recognise, others you may not, but all five cities in the top ranking offer plenty of history, culture and entertainment to those who prefer city life to rural locations. Here’s a rundown from cheap to cheapest.

In Alicante, a city on the Costa Blanca with a population of around 337,000, the average property costs €230,000 (€1,769/sqm) as properties are bigger than average at 137sqm.

In Zaragoza in the northeast, a city of 682,000 inhabitants that’s the capital of Aragon, homes cost on average €175,000 (€1,665/sqm) and are around 105sqm in size on average.

In Valladolid, a historical city and the most populated town in Castilla y León with 300,000 inhabitants, properties cost €174,000 on average (€1,604/sqm) and are 109sqm in size.  

Córdoba , the third most populated municipality in Andalusia with 326,039 inhabitants, is the second cheapest medium to large city in Spain to buy a home, costing an average of €172,000 (€1,363/sqm) for a 126sqm property.

And in first position is Murcia in the southeast, capital of the coastal region which goes by the same name. In this city of 460,000 inhabitants properties of 135sqm in size are going for €168,000 (€1,659/sqm).

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PROPERTY

Q&A: What to do if you buy a property built illegally in Spain

Buying an illegally built property in Spain is fairly common but can have several consequences down the line. Here's what you need to know, how to make it legal, whether you can sell it, and the benefits of doing so.

Published: 25 April 2024 09:35 CEST
Q&A: What to do if you buy a property built illegally in Spain

Unfortunately, over the years, many properties have been built illegally in Spain, not adhering to local rules and regulations. Foreigners who don’t know the legislation can easily fall into the trap of buying one of these properties, only to find out later down the line.

Maybe it’s when they come to sell or perhaps it’s when they want to do works or improvements on the property.

There are several reasons a home could have been built illegally in Spain. Firstly, it could have been built on the wrong type of land. This is it could have been built on suelo rústico, rural land where residential properties are prohibited, also called no urbanizable. 

READ ALSO:

It could have also been built too near the coast. This is down to the Ley de Costas or Coastal Law, which was brought into force in December 1989 in order to protect the costas from overdevelopment and high rises spoiling the landscape. 

The law defines different areas of the beach and dictates which is public land, owned by the state and which parts can be owned privately and built on.

If you buy or own a house in one of these non-buildable zones, there are many problems you could face down the line, often sooner rather than later. This is because there are several rules you have to abide by concerning works, reforms and extensions. In some cases, they may not be allowed at all and everything must be approved first by the local government by providing a detailed project.

Because of coastal erosion, this issue is getting worse as some shoreside homes that were once built outside of these areas are finding that they’re now illegal.

READ ALSO: 

The house may have also had extensions made to it that were built without a license, meaning that the extra parts are illegal.

Q: How do I know if my home is legal or not?

A: Unfortunately it can be difficult to know if your property is legal or not. You could have bought and signed for it with a notary and it could be inscribed on the Property Registry, but this still doesn’t mean it was built to the correct specification and on the right land.

The only way to truly tell is to find out if your home ever had a Licencia de Primera Ocupación or First Occupation license, also referred to as a Cédula de Habitabilidad or Certificate of Habitability. This means that according to the authorities, it is suitable to live in and has the correct licenses.

READ ALSO: How to get Spain’s certificate of liveability for properties

Q: What happens if my property doesn’t have a habitability certificate?

A: If your property has never had a Certificate of Habitability, you must regularise the legal situation. First you’ll need to start a legalisation file (expediente de legalización) and contact the town hall. Depending on the seriousness of the case (ie. where exactly it was built, if there’s any structural danger, whether the entire property is illegal or just an extension) the cost of making an illegal property legal can be considerable. As such, each case must be studied individually with the help of an expert to determine whether it is even feasible or worth the investment.

The next step is to bring in an architect and check whether the property complies with all the building regulations. If it does, you simply need present the expediente de legalización to your local town hall, who will confirm whether or not the property adheres to building regulations and can be made legal.

If it doesn’t, you’ll need to consider whether it will comply with the regulations after some renovations. If that’s the case, you’ll need to draw up a renovations project document (proyecto de reforma) outlining the proposed changes and how they will adhere to building regulations. It must be presented to the town hall along with your expediente de legalización.

According to law firm Acal, the legalisation process can be broken down into steps as follows:

  • Contact the town hall.
  • Begin with the expediente de legalización when the town hall confirm whether or not the property can be made legal.
  • Pay the corresponding fees and taxes (in this case it will be IBI) depending on your municipality and region.
  • If you need to make renovations, obtain the proyecto de reforma and hire an architect.
  • Obtain a building permit from the town hall.
  • Once completed, register the property in the Land Registry.

READ ALSO: What is Spain’s IBI tax and how do I pay it?

Q: Do I really need to make my property legal?

A: Yes, because it will benefit you in the long run. It doesn’t matter what the previous owner told you when you were originally buying the property, owning a property that isn’t fully legal (or legal at all) can create problems and even lead to fines worth up to 20 percent of the property’s value in extreme cases.

By going through the legalisation process and making the relevant renovations, if necessary, you gain a legal property for all purposes and with all the benefits that entails.

You will not have problems setting up, paying, or cancelling electricity, water or gas utility services. You won’t have to undertake reforms and renovation work unofficially, avoiding the eyes of the authorities. Instead you’ll be able to register your property in the Land Registry, which will make things much easier when you decide to sell it or pass it on.

In terms of selling it, perhaps that is the biggest benefit of legalising your illegal property: by registering it properly, you will be able to benefit from its full value when selling it. When a property is illegal, the appraised value will probably be no more than 40-45 percent of its real value at best.

The renovations needed to get your property in shape to meet the building regulations could be costly, but will they cost you half of the total value of your property? 

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