If you are serious about receiving the best financial advice in Spain, chances are any adviser you choose will recommend that, in the absence of a committed property investment strategy, you do not invest too heavily in Spanish real estate.
However, for the enthusiastic expat who has recently fallen in love with the country and the idea of owning a small piece, or perhaps a larger chunk, of its picturesque and romantic charms, it can be hard to resist.
But the truth is that there is often a reason why a property might be going at a bargain basement rate. For example, investment in whole abandoned villages in isolated locations such as Aragón and Galicia has recently become something of a phenomenon, when the reality is that the outlay, which can be under €100,000, will buy you little more than a dilapidated shell without water, gas, electricity, telephone or internet services. So, making your bargain purchase habitable in these circumstances is likely to cost at least ten times as much the initial purchase price.
What about investing in property to create a tourism or leisure business?
In 2018, according to the National Statistics Institute (INE), 82.8 million people visited Spain, and their average spend increased from that of 2017.* The tourist arrival figures broke records for the sixth year in a row, so against this background you would think investing in the industry would be a no-brainer.
However, the truth is rather more complex, as, unless you know the lie of the land, your long-dreamed-of cooking, yoga, writing or detox retreat, may struggle to turn a meaningful profit. This is not to say that you should not invest, only that you should perhaps discuss your plans with a wealth manager to see whether there might be better ways to utilise your investing power.
Property and Wealth Tax
It is important to remember that if property ownership results in the total value of your assets exceeding €700,000 (Spanish-only assets for non-residents, worldwide for residents) you will be liable for wealth tax of between 0.2% and 3.5%.
Although there is €300,000 main home allowance, any additional homes you own in the UK or elsewhere could mean that there is little financial sense in also investing in Spanish holiday let property.
Quite simply, property ownership in Spain may not be the most flexible and tax efficient way to manage your wealth. Instead, you should speak with a local and bilingual financial adviser in Spain about the best way to realise your financial goals.
Financial Advice in Spain
Blacktower Financial Management (International) Ltd. has more than thirty years’ experience helping its clients achieve their financial and retirement goals.
From our offices in Spain we are able to help our expat clients successfully manage their wealth and cross-border tax affairs.
For more information contact us today.
The above article was kindly provided by Blacktower Financial Management Group and originally posted at: https://www.blacktowerfm.com/news/673-financial-advice-in-spain-and-the-pueblo-question