Americans: why do they buy more real estate than anyone else? Expert explanation.

The number of real estate transactions in Spain by Americans grew by13.6% in the first half of this year, reaching1339 operations, according to the General Council of Notaries. Experts surveyed by idealista/news claim that the euro-dollar parity, climate and lifestyle, as well as the tax system of real estate are just some of the factors underlying the increased interest of American investors. In addition, the cancellation of the Golden Visa and the tax stimulus for non-residents in Portugal also contributes to the increased interest in acquiring real estate in Spain by foreign clients.

In the first half of this year, demand for housing from American residents increased more than from non-residents. Specifically, non-residents purchased719 residential homes, which is1.4% less than in the previous half, but23% higher compared to last year, while the number of transactions among residents amounted to620, which is4.4% higher than last year.

The average price that Americans pay for purchasing housing in Spain is2921 euros per square meter, which also is a record value throughout the history of the General Council of Notaries. In other words, Americans are paying more than ever before for housing in Spain. However, among non-residents, the price per square meter is higher, meaning they are buying more expensive housing. Specifically, non-residents are buying homes for3087 euros per square meter, whereas residents on average pay2742 euros per square meter.

Why is the interest of Americans in living in Spain growing?

Spain has established itself as a preferred destination for real estate investors, with a significant increase in interest and transactions, especially from foreign buyers, as confirmed by Berkshire Hathaway HomeServices Spain. This trend is particularly noticeable among American buyers, who find more favorable conditions in Spain compared to other locations.

The attractiveness of Spain for foreign investors is based on several aspects. Factors such as a favorable exchange rate, legal security, an appealing real estate tax system, and the Mediterranean lifestyle are just some of the elements that contribute to the preference for this country. Air travel between the USA and Spain, including flights from New York to destinations like Mallorca and Malaga, further facilitates the arrival of Americans.

Although the Golden Visa plays a secondary role in the decision-making process for purchases, its existence can stimulate interest among certain clients, as noted by Bruno Rabassa, CEO of Berkshire Hathaway HomeServices Spain. While it is not a decisive factor, the Golden Visa can influence those comparing the benefits offered in Spain with those in neighboring countries like Portugal, where the Mais Habitação law recently came into effect, abolishing the Golden Visa. The neighboring country has also announced the cancellation of another tax incentive scheme for foreigners - the Non-Habitual Resident (NHR) regime.

In fact, Spain currently has a new tax system for international digital nomads, which is included in the "Startup Law." The "Startup Law" is not the first modification of Spanish tax legislation aimed at attracting high international income. In 2005, Royal Decree 687/2005 made changes to the special regime for workers transferred for work, and one of the first beneficiaries was footballer David Beckham, who gave his name to the regulation. The "Beckham Law" modifies the Personal Income Tax (IRPF) regulations, offering a range of benefits to wealthy foreign individuals.

Following the example of the "Beckham Law," the "Startup Law" was enacted to attract international talent, skilled professionals, and high foreign income to Spain.

Key factors driving American purchases in Spain

François Carrier Pastor, the CEO of Coldwell Banker Spain, points out the most significant factors:

• The parity between the euro and the dollar played an important role in this growth.
• Climate and lifestyle: Spain offers a warm Mediterranean climate and a rich culture, which attracts those seeking a calm and sunny way of life.
• Diversity of real estate: From luxurious villas by the sea to apartments in historic cities, Spain offers a wide range of properties.
• Investments: Some Americans see the Spanish real estate market as a reliable opportunity for capital growth. Additionally, they find the use of rental platforms interesting for generating extra income during the seasons when they are not occupying their property.
• Buying conveniences: Despite some peculiarities, such as the almost complete absence of MLS (Multiple Listing Service) in Spain, the process of purchasing real estate in Spain for foreigners is relatively straightforward, making it appealing. However, it is important to note that the same property can be represented by multiple agencies, even at different prices, unlike the regulated market in the United States, which creates a lot of uncertainty.
• Moving to Europe: The availability of housing and quality of life in Spain are reasons why some Americans are relocating to the country, especially to cities like Barcelona and Madrid. Additionally, the social security system and the quality of education in these cities are also attractive factors.
• Golden Visa: The Golden Visa combines investment and residency, making it attractive for foreigners looking to settle in Spain and on the European continent.
• Safety and stability: Spain is known for its stability, which gives confidence to foreign investors. The purchase of real estate by Americans in Spain has become a noticeable trend in recent years, thanks to a unique combination of economic and lifestyle factors.

According to Constanza Maya, head of operations and expansion at Engel & Völkers Iberia, the increase in demand for housing from Americans in Spain does not seem to be directly related to the end of the Golden Visa in Portugal. Clients looking for properties in the price range of 500,000 euros or a million do not appear to express a clear desire for the Golden Visa. While some of them, mainly Asians and citizens of Eastern European countries that are not EU members, may take advantage of this opportunity, applying for the Golden Visa does not seem to be a determining factor for this segment of buyers.

In the case of Americans, the explanation provided by Constance Maya points to the exchange rate between the dollar and the euro. The increase in home purchases by Americans in Spain is more related to fluctuations in the exchange rate than to the availability of the Golden Visa. Americans tend to make investment decisions in real estate in places where they spend their vacations. As Europe is perceived as safer, the inclination to invest increases. Overall stability in the region has led Americans to reconsider Spain as an attractive destination for real estate investment.