Now that overseas buyers are finally returning to Spain from the 2008 downturn, things are getting turnt up in Barcelona. Two enclaves in particular are seeing a lot of sales action: Eixample and Diagonal Mar.
Each have equally good points. Eixample, for example, is a historically well-established area featuring upscale shops, architectural gems and stately, tree-lined boulevards.
Diagonal Mar is a relative newcomer as a fashionable area. Originally a military site, where after the Spanish Civil War, Gen. Francisco Franco imprisoned and often annihilated his adversaries, it became somewhat of a slum in the ’60s. By the end of the ’80s, it was an industrial mess. But as of late it has come into its own; its beaches and modern homes are particularly popular with the Russians.
Noelia Arrue, manager of Oi Realtor in the region explains that in Eixample, the area is actually divided into two parts. The Wall Street Journal details her explanation as, “In Eixample, the average price is $416 per square foot. But this figure disguises a significant variation between the high-end “left” (southwestern) Eixample, and the even grander “right” (northeastern).”
Listings range in price from $390,000 to $500,000 on the left for a two-bedroom and a similar property on the right would cost $552,000. Bigger properties can command well into the millions both in Eixamle and Diagonal Mar. While some appreciate the relative bargain prices in Eixample as compared to Diagonal Mar, many are willing to pay a premium for the beach.
One real estate expert explains, “If you want a modern, beach lifestyle in Barcelona then you have no other alternative.”
Even though these areas of Barcelona are commanding high prices and have investors buying up high-end properties, fees can add up. Foreign and domestic buyers pay a 10 percent value-added tax for a new-build, plus a local stamp duty of 1.5 percent in Catalonia. Foreign property owners in Spain must pay a nonresident income tax and a wealth tax. Resales are then subject to a transfer tax between 6 percent and 10 percent, not to mention legal costs.
If that doesn’t deter investors — Knight Frank recorded a 5.7 percent price rise citywide — there are certainly some benefits to forking over cash. Overseas buyers spending more than €500,000, get a Golden Visa, allowing them to travel within the Schengen region, encompassing most of Europe.