Buying a home is a very personal decision. It is influenced by many factors, from the needs at a particular time to the financial or work situation. The evolution of the real estate market and interest rates are also factors that must get considered, although it is sometimes difficult to foresee the future.
If you have considered buying a house in Spain, the last quarter of the year would be the best timing, precisely because of the previous aspects and some others that we explain below.
Trends in the real estate market and interest rates
Although the pandemic caused by COVID-19 caused a severe stop in the sector, the real estate market has already shown signs of recovery. Some reports indicate that in the third quarter of 2021, the year-on-year value of house prices has increased by 6.1%. And forecasts suggest that this upward trend in prices will continue.
The Euribor has experienced fewer variations, which in September 2021 stood at -0.493. However, its future evolution still raises doubts. Therefore, it is the right time to obtain financing with low fixed interest rates that protect against the odds of a future increase.
Although there is a certain reactivation in the construction sector, it will still take time to bear fruit. Additionally, the stock of new housing in Spain hasn't stopped falling in recent years. In fact, at the end of 2020, there were 30% fewer new homes unsold than in 2008.
A decrease in the stock of available new homes implies an upward price adjustment, both in new construction and second-hand. That's why it is the right time to buy a house in Spain, especially if you seek to invest.
The approval of the new tax reform in July 2021 will have a significant impact on home sales. As of January 1st, 2022, a new reference value established by the Cadastre enters into force. This value will get used when calculating the Tax on Patrimonial Transmissions and Documented Legal Actions for Non-Residents (ITPAJD).
Taking the market value instead of the real one to calculate the tax will make a big difference. It will count the cadastral characteristics of the property and information on the prices of real estate transactions provided by notaries.
This nuance may seem irrelevant, but it is not. In some cases, it may involve a significant increase in the taxes paid on the operation. For example, two identical homes in the same building would pay the same tax, even if one got a complete renovation and the other did not.
Tax incentives to buy a house in Spain
Buying a home has some tax benefits. On the one hand, the current State Housing Plan provides aid for young people under 35 years of age, as long as the property is the habitual residence.
In the purchase of new housing, the VAT gets a 10% reduction. Meanwhile, in second-hand properties, there are reductions in the Tax on Patrimonial Transmissions and Documented Legal Actions for Non-Residents (ITPAJD) in the case of homes intended for habitual residence. Additionally, there are some regional bonuses, and in many cases, they end in December 2021, since they got launched to stimulate the reactivation of the market.
If you are thinking of buying a home in Spain, the last quarter of the year represents a great opportunity.
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1 thought on “Reasons to buy a home in Spain before 2022”
I do not like my possible apartment to be occupied with a coverment support!