Tips Before You Buy a Property in Spain
So you have decided to buy a Spanish property. If you take your time and do your homework it could be one of the best decisions you ever make. Below are 5 top tips to help you with the planning process before you even start to view properties:
Are you buying to live in the property or to rent out?
If you are buying to rent out, it is important that you consider who your target market will be and then adapt your buying criteria to your future customer. Will you rent for short term rentals or long term? Is there a need for long term rentals in the area? If you are planning on short term rentals it would be advisable to have a local agent to manage change overs and cleaning.
If buying to rent for short term rentals, consider the distance from the nearest airport and what facilities your customers will want on arrival. There are 17 autonomous regions in Spain each with their own laws for rentals so enquire about the process to register with the regional tourist authority. Does the property already have a rental licence? Speak to the estate agent about the local rental market and consult the holiday property websites to gauge rental rates.
Before trying to find an actual property, identify the region and areas you like. Then go and visit these areas at different times of the year. Certain areas are busy in the summer months but then become ghost towns in the winter and the weather can change dramatically from season to season.
What is your Budget to Buy a Property in Spain?
How much money do you have available for the property purchase? When you buy a Spanish property you pay what is know as property transfer tax and this varies from 6.5% in the Canaries for a second hand property to 10% in the Valencian autonomous region. We have created a useful guide for you to check the tax for the region you are investigating. Download your free guide Property Tax Fees per Region here. On top of this you will pay legal, notary and land registry costs. So allow between 10% and 14% on top of the purchase price to cover these costs.
Do you need a Mortgage to purchase in Spain?
If you are going to finance the purchase with a mortgage consider whether to release funds from your home country or take out a Spanish mortgage. Typically you can borrow up to 65% of the purchase price in Spain. With opening commissions, land registry and notary fees as well as mortgage taxes budget 2% to 4% of the mortgage on costs. Contact an independent mortgage broker and obtain an in principle mortgage offer before you start to view properties.
Spanish Lawyers
It is important you instruct an independent lawyer to act for you and that you do not share the same lawyer as the seller. Instruct a lawyer who speaks your language and who specialises in property.
Spanish lawyers are known as abogados and should be registered with their local college of lawyers. Spanish lawyers are not normally Solicitors too as a Solicitor is someone who is registered with the Law Society of England, Wales, Scotland or Ireland. A Spanish lawyer should confirm the costs of the purchase to you in writing and their legal costs. Typically legal costs are 1% of the purchase price with a minimum fee.
Do not allow the agent to complete the legals for you. Ask the lawyer if they have professional indemnity insurance and how much, so if things go wrong, you are covered by their insurance. Contact your chosen lawyer before you travel to Spain and ask about the services they can offer.
Estate agents are not regulated in Spain
so choose an established agent with a good track record and an office. Many buyers are surprised to find the same property advertised with different agents. This is normal practice in Spain as agents share properties.
Download our free ebook Guide to Buying a Property in Spain with tips before you buy. This can be downloaded from our Legal Advice page
Contact My Lawyer in Spain:
Whether you’re ready to take the plunge or simply exploring your options, your path to starts with the right knowledge and guidance.
For personalised advice and assistance, contact My Lawyer in Spain team in your area to book a consultation.
Hi Alex. My husband and I are clients of yours currently living in the Orkney Isles, you recently did our NEI numbers for us. We haven’t really had much contact with you since the whole Brexit busines came into being, mostly because we still haven’t sold our house yet. I was just reading your news letter where it says about many over 70’s deciding to sell up and move back to the U.K. My husband Kenny is 70, although I am a bit younger, so we were wondering what your thoughts were about this? How much is Brexit going to affect access to 1)Pensions 2)Benefits and 3)Healthcare? Sorry if this is a “How long is a piece of string” question, but we would welcome your thoughts on the wisdom of moving to Spain whilst things are so undecided. Kind regards, Ruth.
Thanks for your comment Ruth and good to hear from you.
In speaking to the British Consul here, they advised me that many British expats reach a certain age in Spain, circa 70, one of the spouses dies or becomes ill and the surviving spouse or both (if alive), decide to return to the UK to be closer to family. The referendum result has caused a lot of uncertainty and this is exacerbating the situation. I am aware of Brits panic selling their property and returning to the UK.
My belief is that pensions, benefits and healthcare rights for Brits already living in Spain and across Europe will be protected and I expect to see the Europeans agree to this promptly when the negotiations commence. Brits considering a move to Spain should be mindful that they may have to pay for healthcare but pensions and benefits from the UK Government is a UK issue rather than a European issue. The Europeans will not decide if Brits living in Spain will benefit from the double or triple pension lock. We will follow the Brexit negotiations with interest to see what the final result is and we will keep you updated.
Thank you for your comments.