How can Catalonia separation affect foreign owners of real estate?

256
0
SHARE

According to brokers, from 10 to 20 thousand Russian citizens own real estate in the rebel region. The separation of Catalonia may bring them problems with residence permits and taxes.⁠

About 70% of Russian property owners in Catalonia purchase it for leasing to tourists in peak season, publication The Bell quotes the consultant on foreign real estate of Knight Frank, Yekaterina Nikitina. According to Nikitina, if the region separates from Spain, real estate prices will not drop: the tourist flow to Catalonia is unlikely to weaken, and property owners, most of whom are indigenous residents of the region, do not need to promptly get rid of it. However, the declaration of independence of Catalonia may provoke changes in the tax regime and regulation of the local real estate market.

To obtain a residence permit in Spain, one needs to purchase real estate in the country worth 500 thousand euros. This is one of the easiest ways to obtain a residence permit in Europe. From 30 to 40% of Russian property owners in Catalonia have such a document. If the president of the autonomy Carles Puigdemont declares it an independent country, its inhabitants and residents will have to get new documents. It is not beneficial to change a residence permit in Spain, giving the right to live and work in any EU country, for a Catalan document, since other countries will probably refuse to recognize the independence of the region.

The following tax regime has been introduced in Spain: residents pay taxes on a progressive scale, and non-residents (for instance, real estate owners living in other countries) – at a fixed rate of 24%. In the event of independence, the Catalan authorities are likely to change this regime – and those polled by The Bell do not have any confidence that it will remain beneficial to the Russians.

In addition, despite a lack of prerequisites for a drop in housing prices, brokers have suspended the conclusion of new real estate transactions. The owner of the broker of foreign real estate Tranio, Georgy Kachmazov, recalled that property prices in London had slumped by 20% after the decision of the UK to leave the European Union.

LEAVE A REPLY

Please enter your comment!
Please enter your name here