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| Madrid, Spain Photo by Felipe Gabaldón |
Historically, Spanish laws surrounding residency and citizenship have targeted the Latin population in Central and South America, but this plan, according to the article, is targeting the Russians and Chinese! Presumably this is because they have many citizens who are both financially solvent and wanting to take up residency in another country.
There are a few things you should be aware of, though. First, it usually takes 10 years of residency before you can apply to be naturalized as a citizen. Second, most foreigners are not allowed to retain their original citizenship unless they can prove Spanish descent or hail from certain Latin American countries. Third, there could well be a political problem here. On one hand, maybe the Spanish people would be grateful if a bunch of foreigners rushed in to buy their land and help the economy. On the other hand, maybe world peace will spontaneously break out tomorrow.
All things considered, it could be a great investment ... in the long run. In the short run, you'd want to think this one through very carefully. Spain's beautiful, but I think I'd give this opportunity a miss unless I really understood what I was getting into.
One thing to be aware of when purchasing a property in Spain (and to a lesser extent Italy and Eastern European countries such as Bulgaria) is that during the property boom many houses and apartment buildings were built on 'green belt' land with the expectation that retrospective planning permission would be easy to obtain. In the last few years regional governments have cracked down on this due to pressure from environmentalists/native local residents and unfortunately some people have bought properties only to find that the retrospective planning permission is refused and the property then can't be resold or is even demolished.
ReplyDeleteIt's important to undertake the same due diligence as you would when buying a property in your home country; try and seek independent legal advice from someone who speaks your native language and the language of that country (i.e. don't just take information from the property developer, seller or estate agent) to check that a legal title to the property exists, that the seller has the legal right to sell the property, and to check if there are any legal or financial burdens registered against the property for which you, the buyer, would end up liable for.
Curtis, thanks for answering the question about citizenship in the post.
ReplyDeletegreenlander: you're quite welcome. I need to do a better job of explaining that when I cover laws in individual countries.
DeleteYour comment about "giving this opportunity a miss" is apropos.
ReplyDeleteI'd be pretty reluctant to invest anything in Spain right now. I'm pessimstic that the eurozone can survive in its current form. I think the Euro will survive, the the less responsible members (Greece, Italy, Portugal, Spain and perhaps Ireland) will not be part of it.
If Spain leaves or is booted out of the Eurozone, everything there is going to get a lot cheaper really fast.
Of course, the politicians everywhere are playing "kick the can", but that can't go on forever. Market forces always win in the long run.
I'm not certain that "less responsible members" is an appropriate term. Governments the world over are used to dealing with financial ups and downs. The difference here is that one of the major financial tools (adjusting their money supply) governments use to cope with these issues is denied to these governments. To compound matters, if they want to provide a stimulus to their economies via targeted deficit spending, they cant due to austerity requirements!
DeleteHi there I am from New Zealand, but currently reside in Australia. If I was to buy a property in Spain, would I be able to spend 6 months in Spain and then spend 6 months in Australia or is that not possible. Thanks for your help.
ReplyDeleteGerald
Gerald, assuming the Spanish have passed this law by now, then yes you can. You'll want to chat with a tax lawyer, though. As a general rule, you're considered a resident if you spend more than 183 days in a country. Thus, you're considered a resident for purposes of taxation.
DeleteHowever, some countries (France is one, but I don't know about Spain or Australia) will consider a "pipe and slippers" test to determine if you're really a resident there, even if you don't meet the 183 threshold. Thus, unless you contact an attorney, you could be facing double-taxation.