Have you been thinking about swapping out the 1,500 hours of sunshine the UK gets each year with the glorious 3,000 hours sunny Spain gets? Buying a property in Spain goes a long way to fulfilling your dream of moving to a warmer climate and adopting the laid-back Mediterranean lifestyle – but there’s a lot of time, research, and planning required in order to do things right.
Spain is an extremely popular destination for expats, with thousands of Brits opting to move overseas for the sunny weather, laid back way of life, and beautiful landscapes Spain offers. One of the biggest appeals Spain has to offer is that there really is something for everyone: whether you’re looking for a chic apartment in the heart of metropolitan Barcelona, a sprawling villa in the hills of the Costa Blanca with a sea view, or a beach-side retirement property with plenty of bars and eateries to keep you entertained, you’ll be able to find what you’re looking for.
Buying property in Spain isn’t without it’s complications. There are many things you’ll need to get in place in order to ensure your interests as a buyer are served best – which can be tricky if you’re not living in the country at the time and don’t speak the language. In this guide, we’ll cover everything you need to know about buying property in Spain and any potential pitfalls you should avoid.
The impact of COVID-19 on real-estate over the past year has meant that property prices are predicted to fall in 2021 across all of Western Europe, including Spain. Before coronavirus, Spain was an extremely popular destination for foreigner investors, particularly with Brits seeking a holiday home or retirement property on a sunny coast.
While the pandemic has certainly added some uncertainty to the Spanish property market, demand is predicted to rise once again over the next few years, with many expats still seeking a warmer place to live even with the present worries over COVID-19 and Brexit.
Most importantly, the reason you are looking to purchase a property in Spain can have a big impact on the best option for you. Are you buying a holiday home or a retirement property as a long-term investment? Or are you looking to purchase a property to rent out to holiday-makers? Perhaps you’re looking for a forever home to reside in Spain long-term.
Any of these options will mean you need to consider slightly different things which will affect the buying process for you.
Spain has an extremely varied landscape with a diverse range of options to choose from when looking for a property to invest in. You could opt for an apartment in the cultural-centre of Barcelona or another of Spain’s thriving cities, or you might prefer to look for a traditional Mediterranean villa on one of the countries many beautiful sunny coasts.
You might want to be in the heart of the action and opt for an area popular with tourists and therefore with an abundance of activities, bars and restaurants and a great expat community. Or, you might prefer a more authentic experience and opt for a town or village less well-frequented by tourists – an option that will no doubt present much more affordable properties, too.
Of course, the best way to find the ideal location for you is to visit Spain and spend some time in areas you’re interested in. Alternatively, finding like-minded expats to discuss your plans with can be a good idea – foreigners who have lived in Spain for many years will be able to offer a valuable insight into the country that you may not otherwise know. Likewise, estate agents can provide a wealth of information on areas of interest – we’ve covered choosing a good estate agent for your needs in this next section.
Using a reputable estate agent can be invaluable in your property search in Spain. Look for an agent that frequently deals with overseas buyers – they’ll be accustomed to helping expats find a suitable property and will be a useful tool for translating any official documents as well as providing information about the region you are interested in.
Be aware that not all estate agents provide the same quality of service and that regulation is limited in Spain. If you can find an estate agent through a personal recommendation from other expats, you’ll be able to avoid unnecessary fees or questionable practices that you may encounter with a lower quality agent.
You aren’t legally obligated to have a solicitor/lawyer for your property purchase in Spain, but it is highly recommende and a mandatory requirement for many mortgage providers. Hiring a solicitor who is independent of your estate agent or the developer showing you properties is the best way to make sure they are working in your best interests.
If you aren’t a Spanish speaker, find a lawyer who speaks English and can explain the details of your contract to you without having to struggle through ambiguous translations alone. Your lawyer should be registered with the local bar associated (Colegio de Abogados), have professional indemnity insurance, and be specialised in Spanish land law (urbanismo).
Buying a property in Spain as an expat is a fairly straightforward process, although it’s helpful to have an idea of the steps you need to take. A basic property buying timeline will look something like this:
One of the first steps you will want to take is assembling a professional team to assist you with your property purchase. This means finding an estate agent and lawyer (ideally separate from one another), and possibly a mortgage adviser and financial adviser, too.
Once you’ve found a property, you’ll make an offer. Be willing to negotiate and don’t be afraid to go in with a low offer. If/when your offer is accepted, you and the seller will sign a preliminary agreement and you will pay a deposit (typically around 10% of the purchase). Crucially, do not hand over any money until you have sought independent advice from your lawyer and financial adviser to guarantee the offer and contract you are signing is legitimate.
Finally, you will sign your contract of sale in front of a notary. It’s at this point that the full costs of your property purchase will be due – including the full sale price, estate agent commission, taxes etc.
In order to buy a property in Spain, you’ll need a financial number (NIE). If you’re from the EU, your financial number should be processed on the same day, but expats from outside the European Union should be aware that it can take several weeks so you should factor this into your planning.
Your NIE number can be obtained from a local Spanish police station with your passport, an is the personal tax identification number used to track financial activities in Spain. Having an NIE number is mandatory for all foreigners with financial affairs in Spain, regardless of whether you are a resident in Spain or not.
Spanish housing costs tend to be much lower than other big EU countries, but of course, prices can vary significantly depending on where you are looking. Shopping for a holiday home on the popular tourist hotspot of Costa del Sol, for example, will have significantly inflated costs compared to opting for an apartment in a village less visited by tourists.
In addition to the cost of your property, there are other charges to consider. The fee you pay your estate agent and lawyer is not fixed in Spain, so will depend on the company you use, although in general, you can expect additional costs to look something like this:
Of course, when buying a property overseas, another major cost you will need to consider is the transfer fee and exchange rate to send money to Spain to cover the cost of your property purchase.
You may choose to open a bank account in Spain and send your money from overseas to your new account, or you might decide to transfer the funds directly to your estate agent/lawyer etc.
A real estate purchase is a considerable sum of money, so finding the right money transfer service for you is a sensible move. A high percentage margin added onto the exchange rate could significantly increase the amount you end up paying for a transfer by several thousand pounds, so don’t opt to transfer money with your bank just because it’s a more convenient option.
Using a specialist money transfer service such as Key Currency can be a sensible option. Authorised by the FCA, Key Currency offer cost-effective money transfer services to thousands of people sending money overseas every single day, with transfers processed within 1 – 2 days of setting up your transfer.
One factor that may affect your property purchase is Spain’s Golden visa. If you invest in real-estate worth €500,000 or more, you and your family will be given Spanish residency. To apply, simply submit a visa application at your nearest Spanish embassy after you have purchased your property. This is a popular route for expats looking to reside full-time in Spain, so if you were already looking at properties in this ballpark, it’s worth keeping in mind.
Once you have purchased your property in Spain, you’ll need to think about how you will pay for utilities and the upkeep of your property. For many, opening a Spanish bank account is the best option, with direct debits providing the most straightforward solution to paying your bills.
If you have a mortgage on your property, your local bank account can also be used for mortgage repayments. Look for a bank that has a branch local to your property for added convenience, and make sure you’ve researched any fees or service charges you are likely to encounter when sending and receiving money.
Charges can vary significantly between banks, so do your research and consider using a money transfer service to send lump sums to your Spanish bank account to cover utility bills etc rather than making smaller, frequent international transfers.
There’s a lot of elements that come into play when purchasing a property in Spain, and it can feel overwhelming at times to make sure everything is running smoothly – especially if you’re not actually living in Spain when making your purchase. The best thing you can do is to thoroughly research the property market and exactly what is needed from you. Arming yourself with a professional team acting in your best interests will ensure nothing is missed in translation and that you get the best deal for your investment.
Finally, when transferring a large deposit overseas for a property purchase, the money transfer operator you choose is crucial. Using a reputable service could save you thousands in transfer fees and exchange rate margins, so don’t go for the most convenient option without doing your research first.
Yasmin is the content writer for MoneyTransfers.com. With an English degree from the University of Nottingham and over 5 years’ experience freelancing in the personal finance niche, Yasmin joined the team with a mission to make international money transfers accessible and easy to understand for all. When she’s not writing, you’ll find Yasmin on her yoga mat or planning her next escape to the mountains.