Investment Property in Spain – Bare Ownership


Posted and filed under Bare Ownership.

bare ownership

Spain hasbeen for many years seen as a very solid property investment. From 1996 to 2007 the average house prices in Spain rose by 197%.

Foreigners bought here to retire, to not miss the boom, to get a piece of that rental income, and of course to get themselves on the Spanish property ladder.

What happened with Spanish house prices after the boom?

We all know what happened next: the boom hit badly in 2008. It is fairly recently that the market has recovered- prices rose by 6% p.a. consistently over the past few years.

Today, prices are in many areas still 33% below the highs of 2008, a full ⅓ below what property was trading for over a decade ago. According to Tinsa, the trusted valuation company, and the INE, (Instituto Nacional De Estadistica)

Foreigners are once again driving prices high with Britons, Scandinavians, French, Belgians, Germans and non-Europeans all dipping their toes back on the market. Foreigners are buting investment properties.

Foreclosures fell by 10% last year and the INE expects further drops as we gather the final figures of 2019. It’s a good time for the Spanish property market.

Sales could reach 650,000 units this year with increase nationally in the region of 7%. (source Tinsa). The economy in general is increasing too here.

The European commission despite the Brexit threat, see lots of reasons for optimism and growth should continue.

Are you looking for a new way to invest in property in Spain?

What is Bare Ownership in Spain?

This fully legally and ever-increasing in popularity idea involves owners of property in Spain selling their homes for large discounts in exchange for a lifetime lease.

A right to stay in the property rent-free until the end of their days. At first, it sounds morbid. Investors are buying houses from elderly people in the knowledge that they may only live there for 10 or 15 years. The age expectancy in Spain is higher than the European average at 83 or so!

We spoke to a few of our clients (property owners) about it however, and they love the idea. They trust us and know we are not going to put them in any sort of negative situation. We would not allow these clients to do anything we would not let our Granny do!

Many of these people have already helped set their kids up back in the UK or Ireland, so the kids have gotten all they are getting! The notion of getting a lump sum into their hand now really appeals. Literally we have 100 sellers waiting to speak to investors and that is without any advertising; it appears that our elderly Spanish property owners love the idea, simple as that.

They never need to leave their home, they get a tax efficient lump sum to spend on a cruise around the world or a new car, and they can do it all without their neighbours ever needing to know.

Maybe this relatively new to the market idea of Bare Ownership is for you?

What about for the investor?

Take this real example: A client of ours has a 400,000 euro property for sale overlooking the sea in Alicante city.

He is 68, 15 years of life expectancy left, but he wants to travel the world before it’s too late, visit the Mayan ruins, that sort of thing. He’ll sell his home for 200,000 euro, with a 20 year / lifetime lease included.

If he sells the property, where will he go?

He does not want to move- he is asset rich, cash poor!

Let’s say an investor borrows 60% of the bank valuation, that is 240,000 euro.

For the sake of argument, let’s say that means the investor is buying with no money down, and he is repaying 1,000 / month over 20 years. It is never quite this easy, but the figures work for this example.

He has no income tax to pay on the rental income as there is none and as George, the owner, has minded the apartment so well for the past ten years we know he’ll continue to do so.

After George passes, our investor takes the keys back to his home.

If we allow only 3% appreciation, that is a return of 720,000 euro to the investor.

Correct, he can turn a 200,000 property (an investment of 240,000 euro) into 720,000 euro.

There are not many investments in Spain that give that kind of return.

Terms and conditions as can expect apply, but maybe it is worth speaking to Spanish Solutions about how it can work for you.


  • Shaz

    Is it deposit paid properties??

    • Nicola Ryan

      Good Morning Shaz,

      Thank you for your enquiry.

      This is a process called Bare Ownership, where people aged 65 years and upwards sell their homes at a discounted price in exchange for a lifetime lease. Please see a link below to our recent blog where we discuss Bare Ownership in more detail.

      Should you have any further queries in regards to this, please do not hesitate to contact us.
      Kind regards

  • GB

    For the bank to lend 240,000 , then the declared purchase price is 400,000. How is the missing 160,000 accounted for ?

    • Ian C.

      Hello Gary,
      You’d need to speak to our mortgage advisors regarding the best deal for you.
      Please let us know if its ok for them to get in touch.
      If the declared price is 400,000 euro for example, all payments must be accounted for in the notary.
      Kind wishes,

  • Tom Try

    I am interested to buy a Bare Ownership property. If I say buy for 100k (Real value 200k). When I take full possession in say 20 years and decide to sell and get 350k. Is my capital gain 150k or 250k?

    • Jane

      Hi Tom

      Your gain would be 250k minus any fees. Ian will be in touch to tell you more and answer your questions.

      Kind Regards


  • Michael


    To follow on from Tom Try’s example. If a property is bought for 100k (valuation 200k), and an income of say 300 per month is paid to the tennant/seller. When full pos­ses­sion is taken in say 20 years and the property is sold for 350k. Is the cap­ital gain still 250k or is the 72k (300x12x20) also taken into account as an expense or added to the 100k buying price to reduce the capital gain to 178k? Regards

    • Jane

      Hi Michael

      I have a full comprehensive answer that I will mail to you direct.

      Kind Regards


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