Sharing ownership of Spanish property. An introduction to buying property in Spain with others
Dreams of luxury villas, Spain and sangria are often shattered by harsh economic reality. One alternative method of buying property in Spain is through the various shared ownership schemes available. These offer an opportunity to get a foot onto the Spanish property ladder for a fraction of the cost of outright ownership.
An alternative means of buying property in Spain
Shared ownership schemes, sometimes known as seasonal ownership, offer a certain number of people the opportunity to own part of a Spanish property. They are entitled to use the Spanish property for a set period each year and they pay only a percentage of the price and running costs.
For example, a quarter share would entitle you to the exclusive use of the Spanish property for three predetermined months each year. Depending on the format you sign up to you may be able to acquire a more flexible entitlement - two weeks per quarter etc.
Spain, and that luxury villa, might not be an impossible dream after all.
Advantages of buying property in Spain through sharing ownership
You may feel that buying property in Spain is unnecessarily expensive considering it would only be used for part of the year. Also, shared ownership may mean you can afford a higher quality of Spanish property than buying outright. For instance, instead of a crowded apartment development you may opt for a luxury villa in Spain. Other advantages of buying Spanish property in this way:
- Secures you a holiday home which is maintained in your absence.
- You become a Spanish property owner whilst reducing purchase and running costs.
- Your Spanish property will generate equity.
- Allows you to sell at any time at current market value.
What is timeshare and has it changed?
Over six million people own timeshares worldwide. Buying into a timeshare scheme allows you the right to a particular property for a predetermined number of weeks each year. Depending on the scheme, you will either own these rights for a set number of years or in perpetuity. This differs from shared ownership
A wave of scandals in the 1980s and 1990s rocked the timeshare industry. Unscrupulous agents in the UK and Spain made promises of luxury villas, rock-bottom prices and incentives which bore no resemblance to reality. Since then new legislation has been introduced which forced companies to act in a transparent manner and protect customers.
Who should I be buying property in Spain with?
Many people are rightly cautious about entering into an expensive and binding contract to own a luxury villa, or other Spanish property, with people they do not know. You may worry about how others treat the property or disagree about decoration.
To circumvent this, some people are buying property in Spain with groups of friends, enabling all to share in the spoils. This should still be approached in a business-like manner to avoid testing friendships with disputes such as who gets the property at certain times.
Costs of shared ownership
If four participants are buying a luxury villa in Spain valued at €150,000 then their outlay will be €37,500 each. For any Spanish property purchase you should allow an additional 10-12% on top for legal fees, notary fees, land registry, VAT (IVA) or transfer tax and stamp duty. Some maintenance costs will also be incurred
