Swiss people represent 1% of foreign buyers in Spain
Swiss people represented 0.96% of foreign buyers in Spain in 2018. Therefore, it means that Swiss investors purchased 628 Spanish properties last year. Doesn’t sound like much?
Swiss investors are the ones who buy the biggest properties in Spain
Interestingly, Swiss people are the foreign buyers who purchase the largest properties! Indeed, close to 50% of Swiss buyers purchased a property bigger than 100m2.
Swiss people buy more expensive properties
Switzerland is the #18 country of foreign buyers in Spain. What’s interesting about the Swiss buyers is that they purchase more expensive properties than other nationalities. Indeed, the Swiss, Swedish, Danish, Norwegians, Germans and Americans are the ones who buy properties for €2,200 to €2,400 per square meter. Significantly higher than the average transaction in Spain, which stands at €1,370 per square meter.
Swiss buyers in Spain: a market of 125 million euros
Although there is no official data about it, we can measure things with the elements above. Considering that there were 628 Swiss buyers in Spain last year, paying over €2,000 per square meter on average, and buying properties bigger than 100m2 for 50% of them, we can roughly estimate that Swiss buyers purchased for 125 million euros worth of Spanish property.
How to get a mortgage to buy in Spain, if you’re a Swiss buyer?
Today I was on the phone with a Swiss mortgage broker. Here below is what I learned, about Swiss buyers who want to buy in Spain, and need to get a loan.
- Banks will finance maximum 70% of the property price
- Interest rate: 1,50% if you take a variable rate mortgage (up to 30 years)
- Interest rate: 3% if you take a fix rate mortgage (up to 30 years)
- The bank which will finance it will be a Spanish bank
However, if you already own a property in Switzerland, and have already paid it back fully or partially, you may get better conditions. Indeed, in that case, Swiss banks will agree to finance the acquisition, as they can take the Swiss property as a guarantee, as well as your Swiss revenues.
- Banks will finance up to 110% of the property price (all costs and taxes included)
- Interest rate: 1,5% to 2%, up to 20 years
- If your debt ratio is below 2/3, you may not be forced to pay off your debt (amortize). Indeed in Switzerland, the rule is that you need to pay off minimum 1/3 of your acquisitions before retirement. So if you’ve already paid back enough on your principal residence, you may not be forced to amortize your secondary residence. Consequently, you may only reimburse interests, and no capital.
The 10 things to know to buy in Spain as a Swiss
Here is a quick guide to help you, the Swiss buyers, with your real estate acquisition in Spain. What should you know before you buy your dream house in Spain? Is it very different from buying in Switzerland?
Property prices in Spain are on their way up!
Spain’s real estate crisis is over
- 2,048€ per square meter at the end of 2007
- 1,349€ per square meter now (2019) meaning -34% compared to the peak => opportunity for investors who can buy now and sell in 3 to 5 years
- +8,2% in 2018 => good timing to invest as prices are recovering
Switzerland versus Spain: comparison of real estate prices
- Lausanne €8,000 per square meter (CHF 9,000)
- Geneva €8,290 per square meter (CHF 9,330)
- Zurich €10,880 per square meter (CHF 12,250)
You can even see below the evolution of real estate prices in Lausanne in the past 10 years.Unlike Spain, where prices went down drastically, Lausanne has known a continuous growth.
So, now the question becomes: with €300,000, would you rather buy 37 square meters in Lausanne, or 222 square meters in Spain?
- €300,000 buys 37,5 m2 in Lausanne (at €8,000 per m2)
- €300,000 buys 222m2 in Spain (at €1,349 per m2)
What type of Spanish properties do Swiss buyers purchase?
Swiss people buy 2nd hand homes mostly (80%), meaning that 20% buy New Homes.
What are the fees and taxes to pay?
When buying a Spanish property, you will have to pay between 8% and 15% of the property price in taxes and fees. Let’s take the example if you buy a 2nd hand home as 80% of the Swiss do. In that case you will have to pay, on top of the property price:
- 6% to 10% for the transfer of property rights (“impuesto de transmisiones patrimoniales”)
- 1% to 1,5% for legal documents (“Impuesto sobre Actos Jurídicos Documentados”)
- 300€ to 700€ for notary fees
- 1% for a lawyer: not mandatory but it should be for all foreign buyers! It’s the only way to avoid the bad surprises, and have someone who will verify in the contracts, make sure there is no debt attached to the property… basically: everything that normally in Switzerland a notary does for you! Because in Spain as we said before, the notary will NOT do that for you.
- 300€ to 1000€ for property valuation : mandatory in Spain only if you take a loan!
Do you need contacts? Don’t hesitate to reach out to ask our contacts (French or German speaking lawyer in Spain)