Buying a property in Spain is a dream for most people, but as with any major financial commitment it’s important to be well researched and prepared before making any life changing decisions.

If this is your first time buying a property overseas, it’s important to take the time to understand how the system may differ from that of your own country. Each country operates according to their own laws, bureaucratic processes and cost structure and it’s beneficial to take these points into consideration to avoid any surprise or disappointment along the way.

Part of our service to our clients is to ensure they are well informed and familiar with the buying process that lies ahead. After all, as the old saying goes ‘by failing to prepare, you are preparing to fail’ and we aim to ensure that every buyer’s journey is a complete success.

We have prepared this guide for you to provide an introduction and overview of what to expect throughout your buying experience in Spain. This is supported by the personal guidance you will receive from the team here at James Stewart Savills who will be with you every step of the way.

Before you buy…

Can anyone buy a property in Spain?

In theory, anyone can buy a property in Spain. However, how you buy the property and how long you can reside in the property each year does vary according to your nationality.

Nationals of the European Union (EU) can purchase property, work, visit or reside in their property without restriction in Spain.

Non-EU nationals are also encouraged and eligible to buy property in Spain, however there are more restrictive conditions in terms of borrowing, employment, residency and visitation rules. Typically, non-EU nationals are only permitted to spend 90 days in any 180-day period within the Schengen area. They are also not permitted to work without a suitable Visa. There will also be different taxation and mortgage terms applicable which are worth exploring before starting your property search.

We suggest consulting with a reputable lawyer before buying a property, so you fully understand the conditions specific to your nationality.

The Golden Visa

For non-EU residents, the Golden Visa is an attractive option to gain permanent residency in Spain. For a property investment of €500,000 or more, yourself and your family gain the right to live and work in Spain.

There are no prescribed rules for residence duration which means that Golden Visa investors can buy a property and travel without restrictions to Spain as they chose. They will however become tax residents of Spain once they spend more than 183 days in the country within a year.

We strongly suggest that you to use the services of a reputable lawyer who specialises in the Golden Visa programme. For this type of application, expect the cost to be anywhere between €1,500 and €2,500 + 21% Tax.

NIE Number

You cannot purchase a property in Spain without an NIE number (Número de Identidad Extranjero.) This is your foreigner’s identity number, which is essential for doing virtually everything in Spain and is used on all tax processes and communications.

The fee to acquire an NIE is nominal, but you may require the services of your lawyer to facilitate this application on your behalf.

Finance

Bank Account
Any bills or taxes associated with your Spanish property usually need to be paid directly from a Spanish bank account. It is a relatively simple process to open an account, but you must be present in Spain or have appointed a Power of Attorney to open an account on your behalf. You can instruct a lawyer to do this for you. They will be able to make recommendations based on the type of account and products that you need.

Mortgages
If you require a mortgage to fund your property, it’s important to know how much you can borrow, so you can focus on properties that are within your purchase power. Once your borrowing capabilities are confirmed, you are in a much stronger position to negotiate.

Mortgages in Spain are typically available to non-residents for 60-70% of the property’s value. Terms and interest rates will vary from bank to bank but are all based on the Euribor, which is a European wide benchmark for calculating interest rates. Mortgage terms typically range between 20-30 years, but there are also age limits to consider.

Currency Exchange
If you live outside of the euro-zone and will finance your purchase from an alternative currency, it’s essential to shop around for the best currency exchange deals. Even the slightest change in exchange rates can impact the cost of your purchase, for better or worse.

Currency exchange specialists can offer preferential rates and little to no commission, because they buy and sell currency in bulk. We highly recommend you engage the services of a currency exchange house prior to making any significant transactions relating to your property purchase.

Taxes
Your residency status in Spain will determine the taxes you are obliged to pay in Spain. It’s worth assessing your tax liabilities prior to investing in property so that you can accurately predict your ongoing costs of property ownership. This will depend on whether you are an EU or Non-EU citizen as well as whether you plan to live in Spain on a permanent basis as a tax resident.

Legal Representation

Due to the points mentioned above, we recommend connecting with a legal professional here in Spain that speaks your language and you are comfortable with prior to the purchase, so that any questions and concerns can be addressed before you set your heart on a property.

Your lawyer will be able to assess your personal residency rights and start any Visa application process if required. They can begin to apply for your N.I.E number and arrange for a Spanish bank account to be set up. They will guide you on financing and taxation and can represent you in your absence. Furthermore, they will be fully briefed and ready to start conveyancing proceedings on your behalf once you are ready to make an offer.

Define your property requirements

This may seem like an obvious starting point, but we highly recommend that you make a wish list in order of preference early in the search. It’s all too easy to fall in love with a property you find online, only to discover later that it simply doesn’t match your personal needs.

We will send you a selection of properties that we feel are compatible with your requirements particularly with location lifestyle aspirations. Here are some important questions to ask yourself to help define what it is that you want from your property in Spain.

Consider this…

  • What is your total budget?
  • Will you need a mortgage?
  • Are you looking for a holiday home, a permanent home or an investment property?
  • Do you want to live in an apartment, townhouse, villa, or country house?
  • If an apartment, do you have a preference of floor? Ground? First floor? Penthouse?
  • Are there any areas which you prefer?
  • Are there any areas that you’d like to avoid?
  • Do you need to be within walking distance to any specific amenities?
  • Will you have use of a car?
  • How important is the view from your property?
  • What kind of view do you prefer? Sea views? Golf? Countryside? Mountains?
  • Who will use the property? Yourself, a partner, family, children, pets, tenants, holiday makers?
  • How many bedrooms/bathrooms do you need?
  • What amenities are important to you? Beach, golf courses, shops, restaurants, leisure facilities, schools, hospitals, public transport?
  • Would you prefer a tourist area or residential area?
  • Would you prefer a property on the coast, in a village, in a town or in the countryside?
  • What property style do you like? Contemporary? Andalucian? Classic?
  • What outside space would you like from your property? Terrace, patio, garden, parking, pool, land?
  • When would like to purchase the property?
  • Are you willing to undertake any renovations?
  • Will the property be empty for long periods of time?
  • What airport are you most likely to use?
  • Are there any absolute essenmtials that the property needs to offer?

The buying process

Now you have considered all the preliminary legal, financial and administrative actions it’s time to get started. While each buyer’s experience is slightly different, based on individual circumstances and the type of property they are purchasing, generally the process will follow the following steps:

  1. Online Property Search
    Once you have clearly defined your budget and property requirements, it’s good to start searching online to get a feel for what is available. Not all online listings are accurate or up to date, but by identifying what you do and do not like it will help the more in-depth search that will follow.
  2. Appoint your agent
    Once you have done your own research, it’s important to appoint a local real estate agent to refine and investigate your initial selections, as well as exploring other suitable alternatives. Spain works differently to some countries in that real estate agents, in the main, have access to all properties for sale, not only their own listings, but most will have their own area of expertise. If you have a specific area in mind, it’s best to choose an agent with proven local knowledge in that area. A local agent will be able to access local listings, prior to them reaching the open market. We recommend choosing and building a relationship with one agent before your viewing trip who will do all the groundwork before your arrival and co-ordinate viewings.
  3. Property Viewings
    When you have established a suitable shortlist of properties, it’s time to arrange a viewing trip. During this trip, you will start to acquaint yourself with different neighbourhoods and locations as well as seeing a number of different properties each day. In the time that you are not visiting properties, it is worth getting a feel for what it would be like living in a particular area. Visit the local amenities, eat out and soak up the local atmosphere.
  4. Making an offer
    When you have found the perfect home, it’s time to make a formal offer. Your agent will be able to guide you on a starting bid that is suitable for the market at the time. They will propose the offer to the vendor and negotiate on your behalf until an acceptable deal is reached for both parties. Your ability to act and complete quickly will put you in a stronger negotiating position, which is why it is so important to have all your finances and paperwork arranged in advance.
  5. Put your lawyer to work
    When the price has been agreed, your agent will hand over the property details to your lawyers to begin the purchase proceedings. They will check the deeds, perform legal searches and due diligence checks, draft contracts and notify you when it’s time to sign the title deed. If you are going to be absent during this time, it’s best to give them a power of attorney so they can sign in your absence.
    Paying a deposit 
Once due diligence has been done to the satisfaction of both sides, an exchange contract will be drawn up. The purchaser will pay a 10% non-refundable deposit to secure the property and complete the purchase on or before a mutually agreed date. If the seller fails to complete the conditions of the contract, he/she is required to return the deposit received and compensate with same amount again.
    Signing the deed

Purchase Costs

When you calculate your budget, you also need to take into consideration the costs that are associated with the purchase. This does vary according to the value of property, whether you are taking out a mortgage and whether it is a new build or resale home.

Buying costs on average can amount to an additional 9.5 to 12.5% of the price of your new home, so this needs to be factored into your budget to ensure you are not overstretching yourself.

RESALE PROPERTY
Transfer Tax (ITP): 7%
Legal Fees: 1% of purchase price + VAT
Mortgage fees: 1% of loan value (if required)
Valuation: 0.1% of valuation (if mortgage required)
Notary Fees: €1,000 approx.
Land Registry Fees: €500 – €1,000 approx.

NEW BUILD PROPERTY
VAT (IVA): 10%
Legal Fees: 1% of purchase price + VAT
Stamp Duty: 1.2% of purchase price
Mortgage fees: 1% of loan value (if required)
Valuation: 0.1% of valuation (if mortgage required)
Notary Fees: €1,000 approx.
Land Registry Fees: €500 – €1,000 approx.

In Summary

Buying a property in Spain is a relatively straightforward process. With over 25 years’ experience in the business, we are confident that with our help, your property buying experience will be straight forward.

We support our clients before, during and after their property purchase. Even after completion we are here to assist with finding interior designers, lawyers, builders, setting up utility connections, purchasing cars and any day-to-day trouble shooting. We know what it is like to arrive here as an ex-pat without understanding the language so thanks to our local knowledge and language skills we know exactly who to contact and how to help.