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Buying property

Although bearing similarities, the legal and administrative process of buying property in Spain differs from that of other European countries.

Buying any property is the single most expensive and important decision that many of us will make. It is therefore wise to be armed with as much information as possible.

Even during the COVID-19 pandemic, housing prices in Spain remained relatively stable. This was revealed in our 2020 Global Housing Market Trends report in which we analysed rental and purchase data between 2015 and mid-2020. The metrics used were:

  • Price-to-rent ratio — the average cost of ownership divided by estimated rental cost. Higher values suggest that it is better to rent rather than buy
  • Price-to-income — a ratio of apartment prices to average disposable income. Lower values mean more affordable housing
  • Mortgage as a percentage of income — a ratio of mortgage costs to take-home family income. Lower values mean more affordable housing.

Mortgage as a percentage of income increased between mid-2019 and mid-2020, but only slightly — by 0.9%. In contrast, while rental ratios fell.

Sean Woolley, Managing Director at Cloud Nine Prestige, commented: “The trend in working from home is making international buyers think about the practicality of living in Spain full time and working remotely, rather than simply using the property as a holiday home. This is increasing demand for home offices and changing the scope of the search for some buyers who are now planning to use their Spanish property as a full-time base and commuting back to work as and when they are needed in the office.”

So, if you’re interested in buying a property in Spain we have created a 10-step guide, aimed at simplifying the process for you:

Buying property in Spain in 10 easy steps

Find a property. Web portals are by far the easiest way to start your search from overseas and a useful list of these can be found below. However, you can also look in national newspapers and worldwide titles such as Abode.

Best of all, perhaps, visit the country and look in estate agents’ windows and sign up to their mailing lists. Consider carefully the area you wish to live in in Spain and take your time.

If you’re purchasing with the aid of a mortgage, look into this very early in the process. If, on the other hand, your money is coming from a tax haven, the Spanish government has to be informed at least six months in advance using form DP2.

Factor in the following as part of buying costs:

  • Property Transfer Tax: 4-11%
  • Notary fees: 600-1,000 Euros
  • Property Registry Costs: 400-650 Euros
  • Gestoria (agency) costs: 250-500 Euros

(Prices correct May 2018.)

Ensure you use a reputable estate agent, as they will be able to assist you through the process far more ably. Check that they are members of professional organisations in Spain such as API or GIPE and ideally choose an agent that is an AIPP or RICS member.

Appoint an independent lawyer (abogado) and not a lawyer linked to the estate agent or developer. Find AIPP or RICS members at www.aipp.org.uk or www.ricsfirms.com. They may either be a lawyer from your home country who’s registered as an abogado or one in Spain.  Set up a Power of Attorney if you need to be out of Spain when any important documents require signatures. It is also advisable to appoint a Gestor, who will assist with the bureaucratic aspects of buying any property, such as the connection of utilities to your new home.

Open a bank account in Spain in advance of buying any property in Spain. Use a specialist currency broker if transferring large sums of money to Spain.

Viewings — a useful, detailed list of what to look out for can be found in the Spanish Land Registry’s Guide to Buying Property in Spain. Once you have found the property you like, you may need to enter into a reservation agreement, paying between 3,000 and 10,000 Euros which will be taken off the final purchase price. Your abogado can check that any initial document signed is indeed just that — a reservation agreement. Do not sign a preliminary sales agreement. Once the deposit is paid, you are locked in, unless preliminary checks throw up an issue or problem. Then, have a survey carried out on the property.

With your lawyer or estate agent, begin the process of obtaining your NIE number (one needed for each purchaser). Give a down payment to your lawyer to begin the conveyancing process and start initial vital checks on the property. If any legal issues arise which were not mentioned in the sales particulars, you can back out.

Once the 15-30 days specified on the reservation agreement have lapsed, you will need to sign the Preliminary Sale Contract, Down Payment Contract or, most likely, Deposit Contract (arras). Your abogado will go through this contract with you in detail. The date for signing the Sale Contract (escritura) will be set at this stage. Your lawyer will accompany you to the Notary who will witness the signature on the contract. Signing the escritura completes the property purchase. Keys will be handed over and the property price balance must be paid in full.

Relevant property taxes will be paid at the time of completion. The new ownership must now be registered at the Land Registry within 15 days. The presentation of essential documents to the Land Registry can be done by any of the following parties: buyer, agent, notary, lawyer, or gestor.

This information is based on the Spanish Land Registry’s publication A Guide to Buying Property in Spain, which can be downloaded for free here.     

Useful link: Read detailed information from the UK government on buying property in Spain.

Property Portals

And don’t forget: the largest property portals in individual countries have international sections with hundreds of Spanish properties to view, for example Rightmove.co.uk in the UK.

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