We do not currently recommend the purchase of property or development of property in Spain.
While it is one of the countries that many British people have over the last few years bought holiday homes in it has one very severe problem, the land grab laws.
You should be aware that if you buy a property in Spain you can end up both loosing the property and with a very large additional bill to pay. This has so far effected several hundred thousand people, so don't go along with the concept it will only happen to those that are unlucky. Many who have had property for some time you will find have sold it and now invested elsewhere, and if you have property there you would be wise to do the same while you can.
So lets explain what these laws are and how they came about. There was some undeveloped or derelict land that was in development areas and they were in some cases holding up access to other land to develop. Rather than introduce a compulsory purchase scheme that could deal with these few cases in some way a solution was implemented that has given Spanish development companies the right to have access through any land that gives them access and to also bill the current owner for the cost of putting in roads and services. They can also take over and demolish other property that is in their way and pay what they consider to be a fair price, there is no right of appeal to anyone else.
So lets look at just three situations
Case 1 - an English person had a villa that was in a terrace looking over the sea, it had just basically the beach in front, they had owned the property for 20 years and it contained many of their personal items. They then got a phone call from a friendly local to say a notice had been posted on their property to say it was to be demolished and they should remove anything that they wanted to keep. No other notice was given, the owner jumped on a plane the following day but was to late to save anything. The property along with all the others in the terrace had been flattened, complete with all contents. A development company had decided to develop the site including the area the terrace of houses stood and the beach area. Under Spanish law they were completely within their right to do this. Their valuation of the property they had taken over was around a twentieth of the open market value, and they would not move on this, until a UK TV crew arrived, when they did a deal with the owner where he instead was given a small apartment in the new developments in exchange for his house. Not a good deal, but the best that was going to be achieved.
Case 2 - A couple had a house in a development, they knew of the land grab laws but thought that as the property was in the center of a development it could not effect them. The road they were on was not busy and they liked the site OK. They were then presented with a large bill, a developer had decided to build a new estate on to the end of the road past their home, and was widening the road and putting in new services to cater for the larger estate. They were to not only pay the large bill but now was living right on the edge of a main road, even some of their small frontage was lost. They no longer liked the house.
Case 3 - the most common situations reported are along these lines - a couple have bought a villa with grounds and views in the Spanish countryside, and retired to it. Then a developer comes along and buys up the land around them and although there is other room for access, decides to take and use a large part of the villa grounds and bill the villa owners for the road and services onto the site. The cost of this which often involves not only services across their stolen garden area but can in the countryside include the enlarged supply of services for some way, and therefore the villa owners are forced into bankruptcy loosing their villa completely as well as the provision they had made for retirement. In some cases the garden taken has included pools, outbuildings and even demolishing a part of the main home.
At this time there are still sufficient foreigners buying property in Spain that the Spanish government sees these practices as only beneficial to the Spanish developers and the developers see it as a part of the funding available for their projects.
This problem started in one Spanish region and has been extended into others, therefore it cannot be a mistake that has happened unnoticed by the government. The problem has existed for some time and as yet we have seen no movement towards correcting it.
In view of this we, along with the Property Pension Club and some others, will not assist anyone to become involved in Spanish property, even if they say that they understand the risks involved.
Should you decide to go ahead independently of us, you should also employ a structural engineer to check that what is to be built and has been built will stand up, as foundations can often be omitted and it is common to build on ground that will not over time support the property. The quality of some work can also be far short of what anyone in the UK would except.
Our advice at this time is that you should avoid Spanish property completely, and rent when you want it.
We do have websites registered to allow us when we feel it is right to provide more information on developing your own property in Spain, but at the moment no work is planned in developing these until we see an improvements in the security that you would have, should you decide to build a home or holiday home there.
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