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Owning a second home has always been a common practice in Spain. Traditionally, these properties were located in the family's hometown or on the coast for summer holidays. However, more people are now choosing to buy a second home closer to their primary residence, allowing them to enjoy it on weekends or take advantage of remote working for a more relaxed environment.But, is it worth buying a second home or is it better to rent when you need it? The key is to be clear about how you intend to use it: as a retreat to disconnect, a holiday alternative, or even as a property to rent out for extra income when not in use. At GILMAR, as a leading estate agency, we can help you find the perfect second home.Buying a second home also requires declaring the equivalent of 2% of the property's cadastral value, or 1.1% if the value was reviewed after 1 January 1994. In addition, you must cover regular expenses such as property tax (IBI), rubbish collection fees, community charges, and other taxes related to property acquisition.
Advantages of Buying a Second Home
To better understand if buying a second home is worthwhile, it's important to know the benefits it offers. Nowadays, as we increasingly value our quality of life, owning a second residence can be key to well-being. But this is not the only advantage:
- Greater supply: Many owners are now selling to gain liquidity quickly, which has even boosted the luxury property market. Combined with a decrease in property purchases by foreign buyers, the second-hand housing market is thriving.
- Comfort: The comfort of arriving at a second home tailored to your tastes cannot be compared to a holiday rental, where you never quite feel at home.
- More flexibility: Buying a second home saves you the hassle of returning keys after your holiday rental. No more bookings or inflated prices; simply travel to your second residence with total freedom. You can also create your dream holiday space, such as a chill-out area with garden.
- Higher profitability: Since the COVID-19 pandemic, domestic tourism has surged, increasing demand for holiday homes in Spain. This presents an opportunity if you plan to buy a second home as an investment.
- Favourable mortgage conditions: Banks currently offer favourable financing conditions for buying property, both variable and fixed-rate mortgages. However, keep in mind that banks typically finance no more than 70% of the total cost for a second home purchase.
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Disadvantages of Buying a Second Home
Although buying a second home is often considered worthwhile, whether for personal enjoyment or holiday rental, there are also some drawbacks:
- Fixed expenses. Even if you only use your second home in summer, it incurs fixed costs such as property taxes and community fees. We recommend considering renting it out during periods when you are not using it to help cover these expenses.
- Obtaining a second mortgage is challenging. While banks offer facilities for mortgages, securing a second mortgage is more complex. Lenders usually require a higher initial payment and higher interest rates for a second home. However, this should not lead you to buy below the cadastral value to get a better price, as this can have financial consequences when settling the Property Transfer Tax.
If you have already made your decision, it's time to choose the best. At GILMAR, we have the experience and commitment to help you select the property that best suits your needs. We offer a selection of ideal properties for second homes on the coast or in the centre of a major city like Madrid. Let us be your trusted partner in finding the perfect home.
