Buying a Property in Spain
Buying in Spain, or anywhere else in the World can be a complicated matter. Buying a property overseas can be even more troublesome if you are not aware of the local laws and procedures. To try to help, we have prepared a few simple steps below to try to help you negotiate what can be a complicated process and make the purchase of your property in Spain a simple and enjoyable experience.
The first thing you must do is find the area where you want to buy. There are many reasons for buying a property in Almería including relocation, retirement or an investment. Buying the right property in the wrong location can be most upsetting and buyers need to ensure that where they buy a property is the right place for their needs.
Take into account your needs for the next 5 - 10 years. If your circumstances are likely to change, try to take this possibility into account when looking into the right area for you.
As of January 1st 2021, Britain is no longer part of the EU and British citizens have lost the right to live and work in the EU without a visa. To live and work in Spain now you need to apply for a Residency and prove that you are able to support yourself for the duration of your stay. If you are not planning to live in Spain full time you can still purchase a property, but can only stay for a maximum of 180 days over a six month period.
Set a Budget
It sounds simple and obvious, but you should be aware of the additional costs of purchasing a house in Spain. The advertised price is the price to pay to the owners of the property. On top of this cost you should add to your budget the Transfer Tax which is typically 8% for purchases under 400,000€ and 10% over 400,000€. You then need to add to this Notary fees, Land Registry fees and your Legal fees.
Typically you should add around 10 - 11% on top of the price of the property to allow for the additional costs and taxes.
Planning a viewing trip is a skilled art. Make sure you contact the estate agent well in advance of your planned trip with a list of the properties that interest you and the dates that you are available to view them. The estate agent can then organise the viewings with enough time to leisurely view each property and also suggest other properties you may have missed on their website or those that may be new to the market. The last thing you want is a rushed sprint around a number of properties that are not suitable. The more information you can give to your estate agent, the better position they are in to advise you as to which of their properties suit you and your needs.
If you require a mortgage then once you have found the right property make sure the bank conducts a property valuation and approves your mortgage before putting a deposit on the property. The bank should issue you with a formal approval letter for the required amount. The deposit on a property in Spain is generally non-refundable (unless otherwise agreed) so this part is essential if you require a mortgage.
Visit a number of banks and speak to them about their offers to allow you to decide which one suits your needs best. The first mortgage offer may not be the best available to you.
Your legal representation is extremely important, having the right lawyer makes the purchase process an almost relaxing experience. Ensure the lawyer is independent, not affiliated with the estate agent to ensure they are working in your best interests and is registered with the local bar association (Colegio de Abogados).
The lawyer will check the property is legal and has all of the required legal paperwork to be sold. If you do not have a Número de Identificación de Extranjero (NIE) then your lawyer should be able to apply for this on your behalf as this is a requirement for all foreign homeowners.
Once the due diligence has been completed by your lawyer, they will advise you of the legal implications, costs and process to the purchase of your property.
A 10% deposit is required to secure the reservation of a property in Spain. This is normally paid in two parts:
- An initial 3,000€ non-refundable (unless otherwise agreed) holding deposit requires the seller to remove the property from the market.
- After 30 days, the balance up to 10% of the agreed purchase price should be paid into an escrow account.
After each deposit is paid, both parties should sign contracts to legalise the payment. The deposits can also be combined into one 10% deposit payment.
Once the deposit has been paid your lawyer will organise the paperwork and legalities to complete the transfer of ownership of the property. An appointment at the local notary will be made when the notary will examine the paperwork, all parties will sign the contracts of sale, the balance of the sale price paid and the keys will be handed over. Payment of the balance of the sale price is normally made via a banker's draft which should be organised in advance with your bank.
Moving in and Aftersales
You are now free to start moving your posessions into your new home. In the meantime, your lawyer will organise the change of name for your electricity, gas and water supply if you ask them to. They will also organise the change of name for your annual council tax (IBI) with the local town hall.
If you have any questions regarding your new property other than those handled by your lawyer, we are always here to help so please don't hesitate to ask.