The price fluctuations, economic crises and, above all, the demands of banks and high interest rates are the main handicaps faced by citizens wishing to purchase a home, whether it is a first, second or shared property. Newly built properties are positioned as one of the main options, but not everyone is able to access financing for them. Something that also slows down the purchase of a second-hand property. Therefore, the housing cooperative is becoming a great option for those who wish to access their own home and abandon the rental regime. But, what is this unusual practice in Spain?
What is a housing cooperative?
It is the result of the union of a group of individuals or legal entities with the objective of building and owning a house at a lower price than the current market price. This union can be 3 siblings who are going to divide and build on the family farm, friends who acquire a large plot of land or wish to raise a building. They all have to have a common purpose and that is to be a non-profit association. That is to say, they cannot commercialize with the constructed properties. Therefore, it is not possible to build warehouses, premises or real estate for subsequent sale or lease.
The members of the cooperative must:
Acquire or manage the land or property where the properties are to be built. Ideally, this should be urban or developable and included in the municipal ordinances.
Divide or parcel it. This involves identifying, for legal purposes, which will be the property of each of the cooperative members and to begin to draw the boundaries in the case of dividing a plot of land into several farms or houses.
Building. The work will begin when the project, the license and the pertinent permits are approved by the local town hall. As for the financing, payment terms or building terms, all this must have been agreed and managed in the creation of the cooperative.
For all those citizens who want to have access to a home through this formula, but do not have members in Spain, the Confederation of Housing Cooperatives has created a Registry of Housing Applicants. Its purpose is to put potential cooperative members in the same area in contact with each other. In addition, it provides legal and juridical assistance throughout the process.
What is a housing cooperative like?
Its main and great peculiarity is that its purpose is not to make a profit, that is, to obtain economic benefits. Therefore, the price of the properties built will have the real cost and not the market value. They will be based on the prices of the work, materials, taxes, etc.
Although it is not a builder or a company, the housing cooperative must also have managing members. That is to say, a group of people who are in charge of making decisions about the rest and who function as president or vice-president. In this case, a Governing Council and a General Assembly are formed, where each and every one of the problems encountered will be discussed. The participation in it will be totally free and democratic and within it there will be two types of cooperative members:
- Members of the society who are part of the governing council and have been promoters of the construction of the houses.
- Adjudicators or owners as purchasers of one or more of the properties.
| According to the latest records of the Confederation of Spanish Housing Cooperatives, there are 206 housing cooperatives in Spain, managing more than 11,000 properties. The total investment of all of them amounts to 1,754 million euros. |
Advantages of a housing cooperative
Buying a new or second-hand property, building your own or partnering with someone else. Today, fortunately, there are endless possibilities for creating or acquiring your own home. The housing cooperative, although not very well known or common, is a process with countless advantages. The main one is that it is a hybrid between a new housing development and building your own property. It gathers the most outstanding benefits of both options, which are: to have a brand new house and to be part of the decision making process.
In addition, it stands out for:
- Personalizing and choosing every single detail of the house. For some this can be a real headache and, for others, a luxury. Building your property together with other people does not exempt you from designing it. Thanks to this phenomenon you can decide on materials, timing, furnishings, carpentry and the like.
- Being part of a housing cooperative is synonymous with democracy. Everyone except the president or CEO will have the same vote. It will be necessary to follow bylaws and good behavior practices, just as in a community of neighbors.
- It is expected that building your house within associations is between 15-20% cheaper than the usual market. This difference or price reduction is due to the fact that it will not be necessary to pay any benefits or fees to builders or real estate companies for their management or processing.
- The housing cooperatives will not have to assume the Tax of Documented Legal Acts in its creation, nor for the cancellation or concession of loans. Neither the VAT on the purchase of the land for the future construction.
- As in the case of new building developments, the payment of the house can be agreed in installments from the incorporation of the association until the completion of the work.
- Being a group of people, the banking entities offer more beneficial credits and mortgages and with fewer requirements for their concession.
- Transparency in communication.
