The publication last week of the new Law on Entrepreneurs in the Government’s Official State Bulletin marks the start of a new horizon of investments in Spanish property. According to its provisions, “the acquisition of property in Spain with an investment of equal or superior to 500,000 euros per applicant” will be one of the conditions by which foreigners may qualify for a residence visa for investors.
Several European countries have similar legislation in place with regard to real estate, in order to promote foreign investment. Greece and Cyprus require lower levels of investment – 250,000 euros and 300,000 euros, respectively – compared to Spain, while others, such as Portugal, have set the same 500,000 euros price for obtaining a residence permit via the purchase of a property.
In the United States there is also a federal law that grants residence visas for the purchase of one or more houses that amount to at least $500,000, provided that one of them costs a quarter of a million dollars or more.
But why is Spain a more attractive country in which to invest in a home ‘with a right of residence’ than those around it, when in those neighbouring countries, the required threshold is much lower?
All the experts point to the “legal security and political stability in Spain” as one of the vital aspects which puts Spain ahead of their Mediterranean neighbours. José Fraile, a lawyer with Gilmar, said: “Spain offers a wide range of real estate products of a varied nature that makes it easy for foreign investment such as housing on the coast, the high-end areas in big cities, residential properties and real estate as investments”.
“We must keep in mind that Spain also has a good infrastructure and a unique climate and lifestyle,” said David Scheffler, General Director of Engel & Völkers Spain. “These factors make it much easier for a foreign investor, for example Chinese, to get to Madrid than any of the other countries,” he added.
Alex Vaughan, founding partner of the firm Lucas Fox, said: “The non-EU investors interested in this measure are quite wealthy people because the law requires them to have at least half a million euros in cash for this purchase. China is the country where the demand is still highest, followed by Russia and the Middle East.” “However,” he continued, “there is also demand from South Africans, Americans and Australians, who are typically travelling and doing business in Europe, and this is an opportunity for them to establish a European base for their business”.
According to El Mundo, the experts agree that the threshold of 500,000 euros is the correct amount for a minimum investment as “Spain is seeking quality investors” and “with an investor who has 500,000 euros in cash there is the security that in the future they will not make the economy suffer”.
Mónica Liu, a lawyer and Manager of BDO China Desk in Spain remarked: “The Wanda Group’s desire to invest in Spain has given credibility to the country and that is encouraging the Chinese investor”. Meanwhile, Alex Vaughan stressed: “in 2013 we have sold 4 times more houses to foreigners than in the whole of last year, and we estimate that in Spain in the next three to five years 100,000 homes could be sold”.
Article source: Kyero.com