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Buying a property in Spain: 10 points to consider

Buying a property in Spain is the dream of many people who are looking for a good place to live in a sunny place. However, to make a dream like this come true, it is necessary to do a little research to be able to find the best property at the best price. If you want to buy a property in Spain in an easy and uncomplicated way, take a look at the 10 points below and apply them when you start your search for a property in Spain.

1. How much money do you want to spend?

The first question is where does your money come from? Are you hiding in the bank or building society, a second mortgage on your UK home or will you get it from the sale of your current home? You need to know that it is in place and ready to go before you make any decisions. If you are considering a mortgage in Spain, you must have all the necessary evidence to show the bank how you will manage the mortgage, as well as inform your real estate agency so they can direct you to mortgageable properties. Your budget depends on what you have raised in your own country or how much you currently have available to put down as a mortgage deposit.

2. Mortgages in Spain

They are much more expensive to install, but the interest rate is much lower than in other European countries, so you win in the long run. “Foreigners” typically receive 70% of the property’s bank appraisal, which is not necessarily the sale price. This means that it is necessary to find at least 30% of the price of the property plus the mortgage expenses: approximately 350 euros for the bank appraisal, 1% of the value of the mortgage for the opening expenses, 0.3% the expenses of notary for the mortgage and 0.3% registry for the mortgage.

3. Property Purchase Costs

Generally, you should allow 10-12% of the purchase price to cover the costs of the actual purchase. Here’s how this amount breaks down:

attorney – the usual charge is 1% of the purchase price of the property to cover the transfer, registration and the visit to the notary to complete the purchase. Lawyers will often offer other services, such as obtaining NIE numbers, changing utilities to your name, opening bank accounts, etc. Be careful, though, you don’t have to use a lawyer for the extra services, and you can often find them for less elsewhere. Always ask for a detailed quote before agreeing to have this extra work done and check with your estate agent for prices from other providers.

Taxes – Transfer taxes for a resale or new build property are 7%. These are set by the government and non-negotiable.

Property registration – All transfers of ownership must be registered and this will cost around 0.3% of the purchase price.

Notary – To be completely legal, all contracts for the realization of a sale must be signed in the presence of a Notary. The expenses for the Notary will be around 0.3% of the purchase price.
All of these costs are in addition to the mortgage costs listed above.

4. What type of property do you want?

Start with two columns, “must have” and “would be nice”. The “must have” list will include the number of bedrooms, outdoor space, and other things you need for your family, including proximity to schools, stores, or public transportation. The “would be nice” list may include things like en-suite bathroom or additional bathroom, more terraces, garage. Jacuzzi, swimming pool, tennis courts, etc. Are you ready to renew? If so, you would need to have two separate budgets: one to buy the house and one for the job. Alternatively, pool your renovation and shopping budget and buy something that needs little to no work. Make this a family discussion so everyone has a chance to put something on the list and nothing gets forgotten.

5. What do you want the property for?

If it’s a vacation home, you’ll probably want easy access, and therefore you’ll want the property to be within a reasonable distance of an international airport. If it is a permanent home, other considerations may be more important. If you are buying as an investment to rent, you need to think about the type of rental, i.e. long term or vacation, as again the area is important to your potential guests.

6. Where do you want the property to be?

Now that you have your budget and your list of essential requirements, now is the time to start your research. Your first step is to go online and start searching. Although you can search by city, at this stage it’s much easier to search just by area and budget, as this will give you an idea of ​​what you’re getting for your money. You will see that the closer to the coast of the Costa del Sol, the more expensive the property is, whether it is a town or a country property.

7. What legal requirements are necessary for foreigners?

The most important is a NIE number, this is a national identification number and is necessary for most things you will want to do in Spain but essential for buying a house.

If you come to live permanently in Spain, you need to think about transportation. Residents of Spain are legally required to drive a car registered in Spain with a Spanish driver’s license. Although you can import your car from the UK this can be expensive and an RHD car is not the best thing to have on Spanish roads, it is much better to sell your car in the UK and buy one in Spain. The Spanish license is just a direct exchange for your UK license, there is no test to take.

If you receive a UK state pension, you will be able to receive free health care in Spain; otherwise, you will need to have private health insurance if you are not paying into the system by working in Spain.

8. Taxes and insurance?

There will be an annual tax to pay on your property in Spain, whether you live here permanently or have a holiday home. These charges are MUCH lower than in the UK, eg €50 to €250 PA is normal to cover rubbish collection and other services provided by the council.

If you live here permanently, you’re liable to pay tax on your assets worldwide, so make sure you don’t pay in the UK too. If you own property in Spain, it is necessary to have a Spanish will. Although you are not subject to Spanish inheritance law on who the heirs are, it makes life easier for your descendants if you have a Spanish will.

9. What else is important?

Find a real estate agent you can trust, who offers more than just selling you a home. Beware of ads that offer you free or low-cost inspection trips, you could pay dearly in the end.

The Civil Guard is currently investigating several real estate agencies that have been selling illegal properties. They estimate that in the last three years more than 2,000 illegal homes have been built. Title deeds show only the plot and agencies do not inform clients, so they may not find out for some time that they are living in an illegal house. Reputable agents provide checklists for their clients with questions to ask so they can double check everything when viewing properties and when speaking with attorneys.

10. Get title insurance

To have complete security when buying property in Spain, it is important to obtain title insurance. This type of insurance protects the buyer against any loss arising from title-related defects for the entire time the property is owned. Some examples of covered risks include: third-party claims such as undisclosed heirs, unrecorded tax liens, errors and omissions in the public record, alteration or loss of title documentation, fraud, forgery, and clerical or typographical errors affecting the title itself. title, thus affecting your investment or vacation home.

Title insurance can allow you to purchase property for a permanent home, vacation home, or investment with complete peace of mind.

If you use the 10 points above when buying a property in Spain, you will be well on your way to realizing your dream of owning a home in the sunniest place in Europe.