Some readers may wonder why after so many articles on property investment abroad I have not covered Spain yet. The answer is quite simple: It is very close and probably well-known to most Gibraltarian residents. And it may well be the case that they can do their property market research on their own. Spain, however, is a large country and prices can vary from €1000 all the way up to over €12.000 per square metre on prime seafront beach properties in Marbella, or exclusive areas of Mallorca in The Balearics.
In this article we shall be travelling to Asturias. A little like the northern parts of Ireland or the UK, Asturias is a principality within the Kingdom of Spain and along Andalucia or Galicia, and is an autonomous community.
This so-called forgotten land is far from Gibraltar but still a lot closer than other property markets we researched in the past like Greece, Malta, Croatia or Ireland. Communications by motorcar are excellent and one can join the Principality in 10 hours by car from Gibraltar, all the route being on motorways of which 95% are toll-free. Another good option is to fly up. Malaga has daily flights to Oviedo-Asturias for some €150 return if booked in advance. The flight is short and pleasant, taking just over one hour. And Oviedo airport terminal is small and very user friendly.
The weather is different from our mediterranean sunny and hot conditions. As we all know well, conditions in summer can be unbearably hot in most of the Mediterranean. Up in the Principality, summer conditions are very pleasant with day temperatures that average from 19-23°C and night temperatures of 15-17°C.
The Picos de Europa flows its pristine, gin-clear waters on to the Cantabrian sea.
Asturias is therefore very green, with lush vegetation, and incredibly pretty. Beautiful rivers coming from The Picos de Europa flows its pristine, gin-clear waters on to the Cantabrian sea. The beaches are no doubt amongst the most beautiful in Spain. And taking into consideration that its weather is heavily marked by the Gulf Stream it is a true fact that conditions are balmy for being in Northern Spain.
A recent research of an ancient history book showed that two hundred years ago Asturias had the largest plantations of oranges in Spain. This somehow proves my point that conditions even in winter are very bearable 12-13°C on average.
The sea temperatures in summer are not colder than, say, Tarifa. In fact, some days ago whilst fishing with an English friend, we found out that sea temperatures were about 23°C. A lot better than in Marbella.
And why would I invest in a place like Asturias? One cannot think of a better or more relaxed place to spend holidays, or even retire. It is much like the UK or Ireland with much better weather and a lot closer. The British have always been great discoverers of the good places to live, but most find mediterranean summers too hot. They already discovered northern Portugal and certainly Cantabria with Santander being not only an extremely attractive city, but most convenient to travel to and from the UK and Ireland.
At present there are no less than two ferries per week crossing from Plymouth and Portsmouth to Santander, plus another option from Portsmouth to Bilbao. In addition, there is a weekly ferry service from Cork to Santander. These ferries do the crossings year around. Santander is less than one hour from Asturias.
Another important reason is that you can still pick up beautiful properties for some €1500 per m², and less if you get there in winter months. This means you can buy a really good property for less than €100,000. There are some outstanding buys out there: Casonas formerly the property of the well-off Indianos (Asturians that left for Cuba or South America to seek for fortune and came back rich and prosperous and built manor-type houses with palm trees and lovely gardens) that may need some restoration but not huge expenses.
A relaxed place to spend holidays, or even retire.
I know of a client who just purchased a stunning Casona for €90,000 and it measures about 300m². It needs work, but the leeway to profit is remarkable in the long run.
Another well-known Spanish billionaire is buying up every historic building in Oviedo or in any other Asturias well established town. The local government is normally open to foreign investment and is willing to help getting the right permissions to restore older buildings. Short-term lets can yield good rental returns, especially in season from May to September.
And what about paperwork and taxes? Asturias has similar purchase expenses of other autonomous communities is Spain. Of your purchase price one must account for a round figure of 15% which will include:
- Transmission tax of 8% to 10% depending on the value of the acquisition.
- AJD tax of between 0.5% to 1.5%
- Registry fee
- Notary fee
If you make rental income you will be subject to income tax as in any other jurisdiction. It is not far off the UK or France. Perhaps a little higher than in Gibraltar. If the corporate route is chosen, company tax stands at present at 25%.
Non-residents will be liable to a 19% tax on any capital gains accrued from the sale of your property which is set off from your income tax in your country of residency. This tax is lower than in many other European jurisdictions but higher than in Gibraltar where there is no such tax.
Is Asturias a safe investment area within the jurisdiction of Spain? As safe as any under developed land. The potential can be very good. The time factor will play an important role. And the investor should look into it with a view to investing in a very pleasant place. Communications are improving with the AVE being built and so is general infrastructure.
There are signs that show a future market improvement. Major Mexican investors are getting in whilst pulling out of other traditional markets. Same language (Over 750 million Spanish speakers today) and plenty of leeway to make a future profit. Lots return to their original land.
Some other good reasons to give Asturias a good try are:
Great value for money in every sense. It is not only fair and low housing prices. One can probably eat the best food in Spain for little more than €12 a head. Best milk, best cheese, best Fabada (Beans), best fish… all at a fraction of the cost you would pay in Madrid or Barcelona.
Sport facilities are superb. Decent golf, great walks and hikes in the most dramatic and beautiful scenario. Superb beaches with good surfing and safe swimming. The best salmon fishing in Spain comparable to Ireland and Scotland.
Culture fans will not be disappointed. There are stunning cathedrals, monuments and Covadonga where the reconquest by the Christians started.
A sound choice.