Comprar una casa obtener una visa

by on November 20, 2012 at 7:33 am in Economics, Law | Permalink

It appears that the “buy a house, get a visa” program that I have long advocated will soon been implemented…in Spain.

Spain has between 700,000 and 1.1 million unsold new homes following the collapse of its real estate market in 2008 with an estimated third of them being designed as holiday homes in coastal tourist areas

…Spain plans to offer foreigners residency permits if they buy houses worth more than 160,000 euros, in a desperate attempt to reduce the nation’s glut of unsold property.

…The scheme would also allow foreign buyers to move around the 25-nation Schengen zone freely, as the agreement allows holders of a residency permit of one country in the area to travel to – though not work in – any other.

160,000 euros is the national average price of a property in Spain and that is only $200,000. Spain has some beautiful coastal property and a nice apartment in Barcelona can be had for a bit more. The time to buy could be soon.

oriol November 20, 2012 at 7:43 am

File under The culture that is Spain

Steve McLeod November 20, 2012 at 8:55 am

Advice I received today from my immigration lawyers here in Spain is that this scheme will only give one a _residency_ permit and not an _employment_ permit.

Nikki November 20, 2012 at 9:03 am

Not even self-employment?

ThomasH November 20, 2012 at 10:17 am

The offer should include the right to work anywhere in EU. That would spread the benefits to the whole union.

Nikki November 20, 2012 at 8:58 am

It is unclear for the moment whether that’s going to happen. The socialists promised today to do everything in their power to prevent the move.

Saturos November 20, 2012 at 8:58 am

This is like what Morgan Warstler has been advocating for the US…

prior_approval November 20, 2012 at 9:28 am

’160,000 euros is the national average price of a property in Spain’

No, it most certainly is not – it represents the officially registered price, not the price that was agreed to between buyer and seller. That price represents a lot of cash changing hands – in the past, the amount was generally 50-50 – 50% as the registered sale, and 50% in cash.

This information gives a bit of insight into how it works -

‘Spain in particular now has a quarter of all these high-value bills within its borders.[20] This is far more than expected for an economy of its size and they are rarely seen in every-day commerce – they have been nicknamed “bin Ladens” by the populace (as everyone knows they are there and what they look like but they have never seen them).’

http://en.wikipedia.org/wiki/500_euro_note

dearieme November 20, 2012 at 10:12 am

Beware: property rights in Spain are not necessarily secure. There have been horror stories in the British papers about people buying or building “retirement villas” and then their being seized for demolition because of corruption in the planning permission system. How many? Dunno.

CBBB November 20, 2012 at 1:46 pm

But you would still get the visa no?

Vivian Darkbloom November 20, 2012 at 11:38 am

Be careful what you wish for. The Euro 160K purchase price is likely just the downpayment.

US citizens can generally spend up to 6 months in Europe without a residency permit (two non-consecutive 3 month stays). Obtaining a residency permit in Spain likely means that the Spanish presume that the individual will also become resident for income tax purposes. Spending more than 6 months per year would likely create that presumption. Claiming US residency under the treaty is iffy given that one would have both a residency permit and a home in Spain. Currently, the top Spanish income tax rate is 52 percent. The lowest rate is 24.75 percent on income up to Euro 17,700. The next rate is 30 percent on income up to Euro 33,007. Then you pay at 40 percent……The standard VAT rate is 21 percent on most purchases. Spanish wealth tax anyone? Rates from 0.2 to 2.5 percent. If you’ve got the dough, are willing to pay those taxes, and come from the right country, I doubt you would have any trouble getting in, whether you buy a house or not.

As the article noted, the program is targeted at Chinese and Russians. Presumably this is because those countries do not have as generous tourist visa rules as does the US and some other countries and it is not as easy for citizens from those countries to get long-term residency permits. Citizens for those countries might find it useful to buy a second home in order to stay in Europe less than 6 months per year and thus avoid tax residency. Or, they might pay Euro 160K for a home so that they can get in the Spanish welfare lines.

ohwilleke November 20, 2012 at 2:56 pm

Excellent points.

Beans November 21, 2012 at 2:55 pm

“Or, they might pay Euro 160K for a home so that they can get in the Spanish welfare lines.”

Unlikely, welfare seekers are rarely this adept or well financed. Your other points are valid, though.

Floccina November 20, 2012 at 2:05 pm

This should appeal to many in Latin America.

ohwilleke November 20, 2012 at 2:54 pm

Assuming that some day the property can be sold for at least as much as the purchase price if one waits long enough, the opportunity cost relative to funds invested in a fairly safe investment is 3%-5% of $200,000 per annum (i.e. $6,000-$10,000 per year) in interest returns lost and there would be direct costs equal whatever processing fees applied.

But, basically, you can buy the right to travel anywhere in the E.U. for something between $500 and $1,000 per month in addition to having someplace to live. The cost is less than the monthly dues in many golf course communities where a country club membership is integrated into the ownership of the home. Presumably, one way you could finance the cost, moreover, would be to rent this second home (or part of it) when you weren’t living there. If you can rent the place for $1,500 a month for 9 months a year, the opportunity cost approaches zero. Also, presumably, the visa would be good for your entire family of two to six people or so, so the cost per person would be even smaller.

I would assume that you have to continue to own the home to keep the visa. If not, it is a real bonanza.

Now, this doesn’t work for someone who needs to work for living (since the work permit is not included), but this could secure legal residency, for example, for someone who wants to get an education for their children in Europe with a home base in Spain, but doesn’t qualify for a student visa for some reason. If would also probably work for someone who is paid by an employer in another country who does a non-commerical aspect of paid work in the E.U. like a journalist, writer, art photographer (who sells photos outside of the E.U.), or matchmaker.

infovore November 20, 2012 at 7:44 pm

Now all they need to do is adopt and enforce affirmative action style lending standards so that every destitute unskilled African can get a loan of sufficient size to get in on this deal.

David November 21, 2012 at 9:11 am

I guess I’d be a bit concerned that–in addition to government-sponsored looting of the type described by @dearieme above–you could easily find yourself at the receiving end of one of those Greek-style mobs.

Spain has absurdly high unemployment–and has had for decades–and I think it’s only a matter of time before they go off the cliff as well. So, who wants to live in a privileged “foreigner’s quarter” when the pitchfork-bearing masses show up?

how to buy a house November 21, 2012 at 2:13 pm

Nice article , want to know more about this topic.

TGGP November 24, 2012 at 9:46 am

My understanding of economics is that higher prices, whether of homes or other goods, is not an unalloyed good thing.

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