Buying VPO (social housing) has some peculiarities beyond the price. This type of property has a different tax regime and mortgage conditions. All this implies greater facilities for acquisition, although it'll be necessary to meet certain requirements.
What is VPO housing?
Social or public housing is subject to specific regulations to facilitate the purchase by people who have difficulty buying on the free market.
The price of VPO housing is set by the public administration, which is sometimes the one that offers this type of housing, although it can also be done by private entities.
Some requirements are necessary to access to social housing:
• Not own another home.
• Be registered as an applicant for protected housing.
• Not exceed the established income level.
• Be a resident of Spain or the autonomous community where the registration is.
• Dedicate the property to habitual residence.
On the other hand, we must consider that VPO homes maintain this qualification between 10 and 30 years, depending on the autonomous community. If we want to sell it within this period, it'll be necessary to request authorization and return the aid received. Additionally, there is a maximum legal price to sell it.
The tax regime for social housing
Acquiring a home involves paying taxes that, in the case of social housing, have discounts:
• VAT: the applicable rate for new housing is 10%. However, for social housing, it is reduced to 4%.
• Property Transfer Tax (ITP): applicable if it's a second-hand property. Its amount is set by the autonomous communities and is between 6% and 10%. However, some have reduced tax rates for VPO to between 4% and 7%.
• Tax on Legal Documents (IAJD): it is also usually discounted by some autonomous communities to be between 0.5% and 1.5%.
Mortgages for VPO
VPO homes also have special financing conditions. These are usually reflected in lower interest rates, longer repayment periods, a longer grace period and no fees. In some cases, it'll be possible to get a mortgage for more than 80 % of the property value.
This makes it easier for people who have difficulty paying high instalments. However, it will be necessary to meet requirements very similar to those required to obtain a conventional mortgage.
How much do you need to save for a social home?
It will depend on the bonuses of each community, whether it is a new or second-hand home and the specific autonomous community. In general, it will range between 24% and 27% of the property price, somewhat less if the bank finances more than 80% of the value of the home. Besides, there are other expenses such as the notary, registry and administration.
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