Buying a Property in Spain – 10 Points You Should Consider

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Buying a property in Spain is the dream of many people who are looking for a good place to live in a sunny location. In order to make a dream like this come true, however, it is necessary to do some research so that you can find the best property at the best price. If you want to purchase property in Spain in an easy and hassle free way, then take a look at the 10 points below and apply them when you begin your search for Spanish property.

1. How much money do you wish to spend?

The first question is where is your money Buying a car in Spain coming from? Is it tucked away in the bank or the building society, a second mortgage on your home in the UK or will you get it from the sale of your present home? You need to know that it is in place and ready to use before you make any decisions. If you are considering a mortgage in Spain then you need to have all the evidence necessary to show the bank how you will service the mortgage as well as telling your real estate agency so that they can direct you to properties that are mortgage-able. Your budget depends on what you have raised in your own country or the amount that you currently have available to put down as a deposit for the mortgage.

2. Mortgages in Spain

They are much more expensive to set up but the interest rate is much lower than other European countries so you win in the long-term. “Foreigners” usually receive 70% of the bank valuation of the property, which is not necessarily the selling price. This means that you have to find at least 30% of the price of the property plus the costs of the mortgage: approximately 350 euros for the bank valuation, 1% of the mortgage value for the arrangement fee, 0.3% notary fees for the mortgage and 0.3% land registry for the mortgage.

3. Costs for Property Purchase

Generally you should allow between 10 and 12% of the purchase price to cover the costs of the actual purchase. Here is how this amount breaks down:

Lawyer – the usual charge is 1% of the purchase price of the property to cover conveyancing, searches and the visit to the notary to complete the purchase. Lawyers will often offer other services such as obtaining NIE numbers, changing utility services to your name, opening bank accounts etc. Take care though, you do not have to use a lawyer for the extra services and can often find these at less cost elsewhere. Always ask for an itemised quote before you agree to them doing this extra work and check with your estate agent for prices from other suppliers.

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

Land Registry – All property transfers have to be registered and this will cost about 0.3% of the purchase price.

Notary – In order to be fully legal all contracts for completion of a sale have to be signed in the presence of a Notary. Costs to the Notary will be about 0.3% of the purchase price.
All these cost are in addition to the costs of the mortgage stated above.

4. What kind of a property do you want?

Start with two columns, “must have” and “would be nice”. The “must have” list will include the number of bedrooms, outside space and other things you need for your family including proximity to schools, shops or public transport. The “would be nice” list may include things like en-suite bathroom or extra bathroom, more terraces, garage. Jacuzzi, swimming pool, tennis courts etc. Are you prepared to renovate? If so, you would need to have two separate budgets – one to buy the house and one for the work. Alternatively, put your renovation and purchase budget together and buy something that needs little or no work. Make this a family discussion so that everyone has the opportunity to put something on the list and nothing is forgotten.