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General country information
Spain, which once prospered by excluding other European
powers from its New World riches, is now a leading member of the
EU.
Situated in south west Europe, it has borders
with France (from which it is separated by the Pyrenees) and Portugal,
and a coastline that stretches either side of Portugal from the
Bay of Biscay in the north to the Mediterranean in the south.
Important industrial areas are in Catalonia at the southern end
of the border with France, and the Basque Country on the northern
end. Both have their own ethnic languages and independent aspirations.
Most overseas investors, especially those with an intention of
letting their properties, will look first at Spain’s popular
Mediterranean coastline facing Morocco and Algeria. Running from
north east, where Spain meets France, to south west, where Gibraltar
is perched, these areas are the: Costa Brava, Costa Dorada, Costa
del Azahar, Costa Blanca, Costa Calida, and Costa del Sol. The
last three, being the most southerly, are the most popular.
Offshore there are the Balearic Islands, and further south off
Africa are the Canary Islands, both a popular holiday and investment
destination.
The current Spanish Government, whose party won the election three
days after the Madrid train bombings last year, was elected on
a ticket promising reduced government intervention in business,
increased action against fraud, and reintroduction of labour market
regulations.
Still catching up years languishing under
Franco’s dictatorship, the Spanish economy has been resilient
to the last international slowdown, the OECD decided in its last
report on Spain. ‘Strong employment growth has led to a
substantial decline in the high structural unemployment rate but
labour productivity has stagnated’, it said.
Domestic demand sustained activity during the first half of 2004,
but net foreign demand weakened while inflation rose due to the
oil price shock, said the OECD. ‘Although some weakness
can be expected in the short term because of the oil price hike,
activity should accelerate again to close to 3 per cent over the
projection period’.
A 2003 report from Banco de Espana concluded that house prices
in Spain had doubled over the past 25 years, most of the increase
coming in the last few years. Between 1997 and 2002, the average
price of housing had risen by 78 per cent, and the (then) latest
official information for the first quarter of 2003 showed a projected
annual rate of increase of 17.5 per cent, it said.
Since then the Royal Institution of Chartered Surveyors’
European Housing Review 2005 has reported that ‘the housing
boom… continued to power along during the first nine months
of 2004’. Prices were still rising at an average annual
rate of 17 per cent, and 18 per cent in Madrid.
UK investors have not been slow to pick up on the Spanish property
boom and many have been buying development properties.
The buying process itself has some pitfalls. For example, estate
agents, of whom there are very many, are not subject to statutory
and professional controls. Also property taxes owed but unpaid
by a previous owner (up to five years back) are a charge against
the property regardless of a change of ownership. So a buyer can
end up having to pay outstanding council taxes. Likewise unsettled
mortgages remain a charge on the property.
In some areas there have been planning permission
problems were investors have bought property built on land designated
as agricultural and have found themselves having to contribute
towards the cost of roads and utility supply systems when developers
have moved into the area.
Spanish inheritance laws have strict rules about family entitlements
that need to be considered.
Property ownership is recorded in a property registry which includes
details of any encumbrances and charges. A parallel but separate
registration system records the location, description and boundaries
of the property and any shared services and areas in common ownership.
The two are now always in full agreement.
|
Country
information - Spain |
Area:
|
500,000
sq km
|
Population:
|
40.3m July 2004 est.)
|
| Principal
cities: |
Madrid, Barcelona, Seville |
Median
age of population: |
total: 39.1 years
male: 37.8 years
female: 40.5 years
(2004 est.) |
| Language: |
Castilian Spanish 74% (official
language), Catalan 17%, Galician 7%, Basque 2% |
Employment
rate: |
88.7%
|
Flying
time
from UK: |
Madrid
- 2.2hrs |
Currency: |
euro (EUR)
|
Time
difference
from UK: |
UTC/GMT
+1 hour |
Rate
of inflation: |
3% (2003 est.) |
International
dialling code: |
+34 |
GDP
per person: |
$22.000 |
| Climate: |
Temperate; clear, hot summers
in interior, more moderate and cloudy along coast; cloudy,
cold winters in interior, partly cloudy and cool along
coast. |
|
|
