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The advantages of buying and investing in Galicia and inland Spain

Buying and investing in Galicia and inland Spain. Galicia, in north-western Spain, is not as well-known as some other regions but for those who enjoy the attractive countryside with the combination of coast, mountains, rivers and picturesque villages along with cooler temperatures, it is an excellent choice.

It is cheaper than more popular areas of Spain and has strong expat communities from countries including the US, UK, Australia, Ireland, and South Africa. There is also less tourism than in more familiar places, with the exception of areas around the Camino de Santiago, or the Way of St James, a network of routes taken by pilgrims wishing to reach the cathedral of Santiago de Compostela.

Why choose Galicia?

Properties and land in the region are relatively inexpensive, with inland areas some of the most reasonable in western Europe. Even closer to the coast, Galicia offers better value than most other locations. It has a different feel to other parts of Spain, with Celtic heritage, rolling green countryside and stone-built villages. The economy of the area is growing, with businesses increasingly choosing Galicia as a base of operations.

Virxe da Barca Muxía CEDIDA POR TURGALICIA / GIVEN UP BY TURGALICIA

Buying property in Galicia

Properties vary in price depending on location. Some villages are all but deserted, while closer to the coast homes are more sought after and more likely to see an uptick in value if Galicia is discovered by the masses. There is ample opportunity to find a renovation project, should you want one.

You can buy a property in your own name and also give someone else a life interest in it. Tax is payable on your purchase at a rate of 10.1%. You should also bear in mind that capital gains tax will be payable on any increase in price when you sell, minus permissible deductions such as the cost of substantial improvements, provided you have proper tax receipts. Capital gains tax is not payable if the property is your primary residence, however, you would need to demonstrate that you were living there for three years before the sale.

For more information, see Spanish Residency.

Fragas do Eume Cedida por/Given up by TURGALICIA

Property tax in Galicia

If you buy a property, you will be required to pay annual real estate tax or, if you are not classed as a resident, non-resident property tax, known as IBI property tax.

As a non-resident, you will need to pay tax in Spain on any income you receive from the property you own there. If you are not renting out the property  you will pay a tax based on the value of the property. With the lower value of property in Galicia, this is not generally excessive.

It is calculated based on the property’s official valuation, referred to as the valor catastral. This is multiplied by around 1% then by 24%. By way of example, and this must be always to be checked with an expert, non-resident property tax on a property worth €100,000 would be 1% (€1,000) x 24%, ie. approximately €250 per annum.

Professional advice in Galicia

Spanish tax rules are complex, and the authorities can be strict and inflexible when dealing with residency and employment issues. It is recommended that if you are considering making your home in Galicia, you engage local legal experts to advise and represent you to avoid falling foul of the rules and opening yourself up to the risk of financial penalties or worse.

Contact our international tax experts

At Del Canto Chambers we have offices in A Coruña, a city in Galicia popular with businesses and investors. We specialise in Spanish tax, and we can advise you of the tax implications of living and working in Spain.

We also advise businesses in the Galicia area as well as elsewhere in Spain, offering a wide range of services, from advice on company formation and compliance to tax and legal dispute resolution.

By Del Canto Chambers

Del Canto Chambers is a leading London Chambers specialising in tax, international tax and legal affairs, property law, intellectual property and legal advocacy. 

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