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How to pay in £,$,¥ Pounds, Dollars, Francs, Yuan for my Spanish property?

STEPHANE — Tue, 31 Jan 2023 11:34:09 +0000

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How to pay in £,$,¥ Pounds, Dollars, Francs, Yuan for my € Spanish property?

How to transfer my cash efficiently to Spain?

Many foreigners: British, Canadian, American, Swiss, Israeli, Moroccan, Chinese, Russian, have a different currency at home than the Euro

Long term, it is a very good diversification strategy to have some assets like real estate in another country, and furthermore in another currency, than in your home country.

Most of your assets are in your home country but:

Economic cycle is different in Spain than in your home country
Inflation is different in Spain than in your home country
Monetary policies are different in Spain than in your home country
Euro is used by more than 300m people in Europe

In order to help you check the long-term evolution of the main currencies against Euro, we have created a table with up to date Sterling, Ruble, Swedish Krona, Norwegian Krone, Dollar, Yuan and Shekel long-term evolution against Euro.

Check what happened to the Sterling after the Brexit vote in 2016. For sure, the British who bought some properties in Spain before the Brexit vote were pleased of that diversification.

If you are buying a property in Spain, in the short term, this means that you will have some currency volatility and some costs to cover if you are investing from outside the EU zone. Have a look at this paper on why currencies are volatile and how you can manage it.

In 2021, about 15% of the properties bought by foreigners in Spain are bought by the British.

After feeling the effect of the Brexit vote that happened on the 23rd of June 2016, British were less active on the Spanish real estate market and the pound lost 10% of its value vs the Euro, Check a chart on the Sterling evolution vs Euro here from Reuters. Of course, in 2020, activity was much lower due to Covid. But end of 2021, activity was really strong. Anyway, they remain by far the first nationality in terms of purchases done by any foreign country.

Foreigners are buying their property in Euro while having their home currency in their bank account.

Book your free appointment with the currency hedging specialist

What are the solutions for foreigners buying real estate in Euro with a different home currency?

Ask their bank to exchange their home currency into euro and to transfer the funds to Spain
Benefit from lower exchange rates thanks to the online platforms like Currencytransfer.com to convert their home currency into Euro and to transfer the funds to Spain

HowtobuyinSpain negotiated with them so that customers get a preferred rate for their property purchases.

What are the biggest advantages of the later?

No commission system, much lower final cost than with a bank taking a commission for converting your currency into Euro AND for wiring the funds to Spain
No hidden fees: the exchange rate includes a small margin form mid-bank rate
Get the best price available at any time on the market: Many well-known FCA regulated currency providers compete for the flow
Segregated account: your money is on a transit account bearing your name of a FCA regulated currency entity, it is never on the balance sheet of the platform itself.
Transfer the correct amount in the local currency
A dedicated relationship manager will help you out to manage your hedging the most efficiently as corporations do.
You can instruct your Relationship Manager to wait for your precise exchange rate, (to gain more or to lose less)
If your account is open, you can lock a rate once your account is open and transfer the money after

Why Currencytransfer?

For all the foreigners looking to buy with non-Euro currencies as Sterling, American Dollar, Canadian Dollar, Shekel, Yuan, Ruble, Swedish Krona, Norwegian Krone and other Asian currencies,… when you are buying a property in Euros, you will need to exchange your currency into Euros and transfer the money to buy your property. Most of the time, this involves huge bank costs: up to 5% and mostly close to 3%.

Have a look at our partner based in London: Currencytransfer.com! We have negotiated with them the best service and the best rates for our customers. They take a very low commission rate and transfer the funds without any costs. You can create your account for free and lock your exchange rate into Euros even before wiring funds with your local currency. Have a look at their website and don’t forget to mention “HTBIS” in the field “Where did you hear about us?” to get the best rates we negotiated with them for the members of our network.

How does it work in practice?

Open your free account on Currencytransfer.com and mention HTBIS code in the field “Where did you hear about us” to get the best rates,
Lock an exchange rate between your local currency and Euro (or instruct a threshold exchange rate to be traded later)
Wire the funds in your local currency on your segregated account in a top tier bank
Receive the funds in Euro on your account in Spain, on the account of your lawyer,…

Let’s have a look at an example of trade with CurrencyTransfer.com

Let’s say you’re a British looking to purchase your second home in Spain at a cost of €200,000.

- STEP 1 You book a deal on the CurrencyTransfer platform to buy €200,000 at an exchange rate of €/£ 0.8800. This will cost you £176,000.
- STEP 2 Behind the scenes, your selected FCA payment provider buys €200,000 from one of its market counterparties to ensure they have funds available to honour your deal.
- STEP 3 The next step is to pay your winning payment provider the £176,000. You pay this directly to their Segregated Client Account. These are all secure, separate client accounts, held with stable, tier-1 banks (such as Barclays or RBS). This ensures that your money is safe from any business liabilities that the payment provider could be affected by.
- STEP 4 With your payment of £176,000 now safe in the payment provider’s Segregated Client Account, the broker now needs to pay the €200,000 that you booked across to your Spanish lawyer, notary or even your own Spanish account on the date that you have chosen.
- FINISH Once the payment has been delivered to the beneficiary the transaction is complete

As of January 2022, here is the business update from Currencytransfer

- Clients: 6,500+
- Currencies: 28
- Value of the currencies exchanged by the group since start: more than £3 bn
- *Average saving: £1,260
- Proud to have saved our clients over £15 million in hidden currency fees

Other uses? Transfer cash (minimum €10.000) to relatives everywhere around the world.

Looking for a lawyer, an architect, a property hunter in Spain? Ask us directly!

Stéphane

Senior analyst and strategist at HTBIS

Check the full HTBIS team here

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Real estate foreign investors are discovering Madrid

STEPHANE — Mon, 20 Mar 2017 07:06:46 +0000

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Madrid, the capital of Spain, is the third biggest city in Europe behind London and Berlin.

The capital of Spain is one of the cultural centres of the country with its museums like the Reina Sofía, its theatres like the Teatro Real or the majestic Palacio Real Madrid. Even though it might not have the sea like Malaga or Alicante, neither it had a genius architect that changed the shape of the city as Gaudí did for Barcelona. Its location, right in the centre of the Iberian Peninsula, makes any corner of the country available with less than 7 hours drive.

Why would you buy a property in Madrid?

Its mix of Continental and Mediterranean climate makes the weather in Madrid more tempered than most of the other European capitals. In an interview with the Spanish newspaper “El Boletín”, the commercial director of Lucas Fox International Properties in Spain, Rod Jamieson, said “everyone loves Madrid, its weather and architecture together with its gastronomy, its theatres… foreign investors are discovering Madrid, and now, when people talk about Spain, they don’t only think of Barcelona, they also think about the capital and its charming atmosphere”.

These reasons have attracted property buyers from all over the world to Madrid. Among them are people from the USA, Western Europe and the United Arab Emirates. Most buyers from the US are Spanish speakers, who already have houses in Miami and are looking for those in Europe. They choose Madrid because people there also speak Spanish.

Another factor could be the cost of living in Madrid, which is way lower than in many capital in the world, while at the same time salary are strong.

Who are the buyers? British, French, German, Russian

The Brexit has also caused a boom in the real estate market, and more British people are buying houses in the capital of Spain nowadays. Joaquín Guisado Vélez, a real estate expert of Navacasa, points out that:

“right now British buyers represent the 20% of the market. French, German, Russian and Italian follow behind. Also there has been an increase of Chinese buyers compared to 2011.”

Foreigners are active on the market as you compare price evolutions of Spain vs other international markets. Check it on our trend section: the property prices in Spain are still much lower than the prices paid 10 years ago!

Have a look at our 10 Year ranking of Spain vs all other European markets as of September 2016:

What about the Business districts?

As the capital of the country and the third biggest city in Europe behind London and Berlin, Madrid has three well-marked business districts: Centro, Chamartín and Nuevos Ministerios. Most of these offices have been there for a long time, so they don’t have a direct effect on the residential real estate market.

There are new office buildings blooming in the suburbs of the capital. Because of them some of these areas are developing their facilities and public transportation. There is also an increase in the apartment prices.

How much does a property in Madrid cost?

The square meter price in Madrid is around 2.600€, and it is expected to grow 5% this year. But, of course, Madrid is a big city, with more than 3 million people, and price depends on the location, it could be less or more expensive. Let’s have a closer look at it:

The centre of the city is more expensive than the suburbs, with a price at around 3.500€ per square meter.
Salamanca, Chamberí and Chamartín have an average price of 4.000€ per square meter.
Other non-centrical districts like La Latina, Villa de Vallecas and Carabanchel are among the cheapest districts, with prices around 2.000€ per square meter.

Check the real estate prices of Madrid vs Spain

As you surely read it in our news published in January, for the first time since 2007, Real Estate returns are back in positive territory: the expected return end 2016 was 8,4% according to the Central bank of Spain.

Where will you find some of the nicest neighbourhoods?

Salamanca, Centro, Chamberí and Chamartín are the most centrical districts. You will find all the facilities to enjoy an easy life: some of the best museums and theatres, hospitals, schools, restaurants and bars, supermarkets, etc. These centrical districts also have the best options for transportation and they are not far from train station Atocha. From here it is easy to get to every corner of Spain! It is the centre of the high-speed railway system “AVE”, you can get to Sevilla or Barcelona in only three hours! Read more on that in our article: 25 years of fast train in Spain.

The district of Retiro is still a good choice for those looking for a place close to the centre. It’s laid-back life makes it a perfect place for those, who want to be near to all the facilities that the centre offers and at the same time to live in a quieter neighbourhood. The park of Retiro is the most popular green area of Madrid.

For those looking for tranquillity and willing to live not far from greenery, Moncloa and the Northeast area of the city are the perfect districts. Public transports bring you to the centre of the capital.

If you want to invest in the Spanish real estate market in Spain, don’t hesitate to read our special report with the 10+ reasons why you should have a look at the Spanish property market.

Do you want to check the yearly weather statistics in Madrid before buying? Check our Infographic.

Have a look at our ePostcards before planning your next holidays in Spain.

Get your insights right to your mailbox? Register for our newsletter: https://howtobuyinspain.com/en/newsletter/

Looking for an expert in Spain? Ask us directly!

Raimon

Senior journalist and writer at HTBIS

Check the full HTBIS team here

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