For members


Spanish property roundup: Renting on a temporary basis and cheap medium-sized cities

In this week's property news roundup we cover the growing popularity of temporary rentals in Spain, the medium-sized cities with the cheapest properties and the latest on rental allowances and tax deductions for renovations in 2022.

Murals on a building in Madrid, Spain's capital.
Murals on a building in Madrid, Spain's capital, where house prices grew 3.4 percent in the final quarter of 2021. Photo: levi sun/unsplash

More people in Spain are renting

Spain, a country where buying a property is considered almost a rite of passage as well as a safeguard for the future, has fewer homeowners than 10 years ago, according to the latest Eurostat data.

The percentage of people who own their homes in Spain has gone from 79.8 percent in 2010 to 75.1 percent of the population in 2020, 4.7 percent less in a decade. 

Spain is the third country in the European Union in which the number of homeowners has fallen the most in ten years, behind Denmark, where it has fallen by 7.3 percent to 59.3 percent in 2020, and Lithuania, with a drop of 5 percent, to 88.6 percent.

This reflects the growing trend in Spain for people to rent rather than buy, more due to necessity in an unstable job market with rising housing prices than through personal choice. 

The percentage of the population that rent in Spain has gone from 20.2 percent in 2010 to 24.9 percent in 2020, a figure that’s still far from the rental rates of Germany and Austria, which lead the way in terms of rental housing in Europe. 

Ten million properties in need of a revamp

That is the estimated number of properties in Spain in varying degrees of disrepair, as provided by Ángela Baldellou of the 2030 Observatory of Spain’s Higher Council of of Architects.

Spain only renovates around 0.8 percent of them a year, but as part of the €3.4 billion in EU recovery funds allocated to the country in 2022 this rate should increase to 3 percent. 

Property owners and prospective buyers in Spain will be able to claim a tax deduction of up to 60 percent for energy-efficient renovations this year. 

When this offer will be made available to homeowners depends on the region but overall it’s expected that homeowners across Spain will be able to apply in January.  

READ MORE: the home improvements you can get a 60 percent tax deduction for

€250 monthly rental allowance soon available 

Last October, Spain’s Prime Minister announced his government would launch a housing scheme whereby 18 to 35 year olds who earn below €23,725 gross per year would be able to get a monthly discount of €250 off their rent.

This youth rental voucher will be available in the coming weeks and will be retroactive from January 1st 2021, meaning that even if it’s delayed until February, applicants will be able to claim their discount from January’s rent. 

This is according to sources from the Ministry of Transport, Mobility and Urban Agenda cited by Spanish news agency Europa Press.

The most vulnerable families will receive extra state aid to cover “up to 40 percent” of their monthly rent.

The income limit of €23,725 gross earnings a year amounts to wages of around €1,500 net a month. 

Growing popularity of temporary rentals in Spain

Although homeowners usually need any extra money they generate from rent, they don’t always like the idea of ​​having to leave their home to tenants to live in for years. 

On the other hand, short-term rentals through Airbnb and similar platforms can be rather laboursome for the income they generate. 

Is there a way a Spanish homeowner can rent out their property for a few weeks or months without having to fully commit to a long-term tenant or sign a contract?

Yes, temporary or seasonal rentals are proving the perfect solution for many second home owners as well as for renters such as foreign digital nomads, Master’s students or other professionals. 

In cities such as Barcelona, the drop in tourists and rent caps in the city have led this temporary rental trend to shoot up in recent months as landlords and tenants both look for more flexibility. 

Platforms such as MyRentalHost, MySpace or Youhomey are making it easier for such arrangements to go ahead with a third party ensuring everything goes according to plan.

The medium-sized cities with cheapest properties in Spain

Spanish ‘big data’ platform Brains Real Estate have crunched the data for Q4 of 2021 and unveiled which medium-sized cities offer property buyers the best value for money. 

Some you’ll recognise, others you may not, but all five cities in the top ranking offer plenty of history, culture and entertainment to those who prefer city life to rural locations. Here’s a rundown from cheap to cheapest.

In Alicante, a city on the Costa Blanca with a population of around 337,000, the average property costs €230,000 (€1,769/sqm) as properties are bigger than average at 137sqm.

In Zaragoza in the northeast, a city of 682,000 inhabitants that’s the capital of Aragon, homes cost on average €175,000 (€1,665/sqm) and are around 105sqm in size on average.

In Valladolid, a historical city and the most populated town in Castilla y León with 300,000 inhabitants, properties cost €174,000 on average (€1,604/sqm) and are 109sqm in size.  

Córdoba , the third most populated municipality in Andalusia with 326,039 inhabitants, is the second cheapest medium to large city in Spain to buy a home, costing an average of €172,000 (€1,363/sqm) for a 126sqm property.

And in first position is Murcia in the southeast, capital of the coastal region which goes by the same name. In this city of 460,000 inhabitants properties of 135sqm in size are going for €168,000 (€1,659/sqm).

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For members


How to turn a bar, office or shop into a residential property in Spain

Commercial properties in Spain can be a lot cheaper than residential ones, but it’s not as straightforward as buying a former restaurant, office or shop and moving in. Here are the steps to follow and what you need to be aware of.

How to turn a bar, office or shop into a residential property in Spain

One of the tricks budget property hunters in Spain have been using in recent years is buying a local (commercial property), oficina (office) or nave (industrial unit) and transforming it into a vivienda (residential property) to live in or let out. 

It’s a trend that’s roughly doubled in big cities such as Madrid and Barcelona in the last five years. 

Buying a commercial property can work out to be 50 percent cheaper than a flat or house in Spain and there can be other advantages such as it being more open plan than Spain’s typical corridor-themed apartments as well having more money to invest in the renovation. 

Is it possible to turn a commercial property into a residential property in Spain?

Yes, in theory it is, but it’s not always possible. The rules relating to a change of property’s usage from commercial to residential or vice versa are determined by each municipality in Spain, so before you rush to buy un local, you have to do your homework first and be aware of some of the most common pitfalls.

It could be that the limit of residential properties per hectare has been surpassed already, or that without some major changes the property doesn’t meet the standards of size, rooms, space, height, layout, ventilation, air extraction or light of the town or city hall. 

It isn’t the most straightforward process and depending on the property and the individual municipal rules in place, it might just not be possible to live in the property or rent it out to others.

Living in a commercial property is illegal and may cause you problems such as not being able to activate water and electricity or register your padrón at the town hall.

Despite all the paperwork needed, flipping a bar or office and turning it into a home usually works out cheaper than buying a residential property in Spain. (Photo by ANDER GILLENEA / AFP)

Don’t be discouraged however, as in many cases it is possible to change the use of a property from commercial to residential and in regions such as Galicia authorities are currently facilitating the process to address the matter of empty abandoned stores and the lack of well-priced accommodation for young homeowners.

What are the steps to follow in Spain to change a property from commercial to residential?

Check the statutes of the community of owners: In order to make any changes within the community of neighbours, permission must be requested in advance. Beforehand, you can ask the comunidad president for a copy of the community statutes to see if the change of use from commercial to residential is mentioned.

READ ALSO: ‘La comunidad’ -What property owners in Spain need to know about homeowners’ associations

Request permission from the town hall: After getting the green light from la comunidad, you have to go to the ayuntamiento (town hall) of the town where the property is to find out if it’s possible to add another residential property to the finca (building). 

Even if this is confirmed, it doesn’t certify that the change of usage from commercial to residential is allowed, for which the town hall will ask you to provide an architect’s proyecto técnico or feasibility report based on municipal urban laws. You will only be allowed to swap from commercial to residential if the project meets the safety and habitability requirements of the Technical Building Code (Código Técnico de la Edificación).

Get the Building Licence: Known as licencia urbanística or permiso de construcción in Spanish, this is an official document required by the town hall for you to carry out a construction or renovation project. In other words, you’ll need this municipal authorisation to begin work on your future residential property, whether it’s major work or minor . 

Get the Certificate of Habitability: Once the renovation work is complete, you’ll need the cédula de habitabilidad to be able to move in or let the property out . The conditions for this are regulated by each regional government and again it’s an architect who must prepare a technical report in order for a town council technician to issue the certificate of habitability.

The certificate we need for the change of use is that of primera ocupación (first residential occupation), which has to include the usable surface area of ​​the home, rooms, address, location, maximum inhabitants etc.

How much does it cost to transform a commercial property into a residential one in Spain?

If for example it’s a 80m2 property with two rooms, the total would be about €50,000, according to property websites Idealista and Habitissimo, with the bulk covering renovation costs (€500/m2= €40,000) and the rest going to cover permits, architecture costs and taxes.