Buying a second home in Spain: key information before investing with confidence

Buying a second home is a decision that more and more people in Spain are taking. In fact, it is estimated that close to three million families already own one, which places Spain among the top European countries with the most properties of this type.

In most cases, these homes are intended for personal use, as a holiday retreat or a place to disconnect during weekends and holidays. They are usually located in coastal areas —such as the Costa Blanca, Costa del Sol or Costa Cálida— or in the buyer’s home towns, where there are still personal or family ties.

This choice not only responds to emotional criteria, but also to the search for a pleasant environment, well communicated and with services that allow you to enjoy comfortable and flexible stays all year round.

Are you considering buying a second home in Spain, either to enjoy it or as an investment? From Quadratia we tell you the key aspects that you should take into account before taking the plunge.

Because yes, it can be an excellent investment, even after the elimination of the Golden Visa —a recent measure that no longer allows residency through the purchase of real estate— as long as it is done with planning and knowledge of the market.

Second homes in Spain: what they are and how to take advantage of them

Normally, a second or holiday home is one that you do not live in on a regular basis, but use at specific times, especially during holidays.

This type of property can become your space for disconnection or holiday home, your refuge on the beach or in the mountains, and the place where you can enjoy your free time with your family. But it can also be a source of income if you decide to rent it out, or simply a way of diversifying your assets.

Uses of the second home as a habitual residence

A second home in Spain can be converted into a habitual residence, but to do so you have to meet certain requirements:

1. Register at that address.
2. Declare the property as your tax domicile using form 030.
3. You have been living in the property for 3 years or have done so effectively during the first year since you acquired it.

The tax authorities frequently check the declarations of habitual residence of second homes to see if they are actually used as such, and they usually do so by analysing the consumption of utilities such as electricity, water and gas.

Isabel Soriano, Sales and Marketing Office Coordinator at Quadratia

Benefits of buying a second home in Spain

Whether it is for yourself or you are thinking of renting it out, the advantages of owning a second home are many:

• You will have your own holiday destination available whenever you want.
• You will save on accommodation, one of the biggest expenses during your holiday.
• If you rent it out when you are not using it, you can earn additional income.
• It is a safe and profitable way to increase your wealth and diversify your savings.
• Properties tend to increase in value over time, which can increase your profitability. And if you also opt for a home built according to efficiency and sustainability criteria, you will be multiplying that value. Here we tell you why sustainable construction makes a difference.

Preliminary advice on buying a second home

At Quadratia we always recommend you to analyse all aspects before making a decision. Here are the key points and tips from our experts that you should consider:

Economic costs to consider before purchase

Think not only about the price of the property, but also about all the additional costs, such as insurance, taxes and maintenance costs. Analyse your budget in detail to find out if buying is a good decision for you.

The importance of location for your second home

Of all the housing options available, focus on those that best suit your lifestyle. If you are looking for a disconnection from the hustle and bustle of the big city, opt for quiet locations or complete urbanisations that allow you to enjoy your free time without leaving your home.

If, on the other hand, you are a complete urbanite, look for a property located in a quiet and peaceful area that allows you to enjoy your free time without leaving your home near of locations close to basic services, good transport links and adequate leisure facilities for your family. Also, consider the demand in the area if you are going to rent the property.

Ideal distance between your primary residence and your second home

If you are going to use it for your personal enjoyment, its location should be in a place you like, but not too far from your usual residence or that has good road connections or regular flights from your home country. Otherwise, when the time comes, you will be too lazy to move, and if you decide to rent it, it will be easier for you to manage any unforeseen eventuality.

Expenses and taxes: what you should not overlook

When buying a second home, you will also have to bear certain taxes and expenses. These are the most important ones:

• For new houses, VAT, which is currently 10% of the value of the property.
• For second-hand houses, ITP (Impuesto de Transmisiones Patrimoniales): it depends on each autonomous community, but it is usually between 6% and 10% of the value of the property.
• Notary and registry fees: compulsory in any sale and purchase (sometimes covered by the bank).
• Maintenance and community costs: review the fixed costs associated with the property.
• Home insurance: compulsory if you take out a mortgage and highly recommended in any case.