The top 10 questions to ask when looking to buy a house in Spain.
04 May 2016
From secluded villages in the mountains, quaint cabanas on olive groves and vineyards; luxury beach front resort apartments or spectacular villas – there’s a wonderful variety of choice for people looking to buy a holiday home in Spain.
Whilst the choice on offer is great to appeal to the masses, it can be a confusing process when making your decision to buy in Spain. At Select Resorts Properties, we’ve been guiding clients for over 30 years in purchasing holiday homes abroad and have compiled the top 10 questions that should be considered when looking to make a Spanish property purchase.
1. Where’s the best place to buy a property in Spain?
Where you look to buy a house in Spain will impact the potential lifestyle on offer as well as the climate and type of properties available. It’s important to consider why you’re buying your Spanish property, as investment purchases will often require different priorities to second home purchases.
When thinking about where you’re looking to buy, we recommend making a list of what’s important to you. Are you set on being in the hustle and bustle on the Costa del Sol, or would you prefer something a little more laid back, like that of the Costa Blanca?
Do you want to be near the local amenities and facilities, like golf, shops, supermarkets, beaches, banks, restaurants & clubs, or would you prefer a more tranquil location, surrounded by vineyards?
From the glitz and glamour of Marbella, to the peace and tranquillity of Mallorca – choosing the perfect region for your Spanish property purchase is vital – and a great place to start when looking to purchase a home abroad.
2. What type of property is best to buy in Spain?
Much like the area in which you look to buy, this depends largely on your personal requirements.
From beachside apartments to golf villas; new and off-plan developments to resale homes; there is no doubt you’ll find your perfect property in Spain – however different property styles and types come with different benefits & potential pitfalls.
Off-plan developments will often yield significant capital gains when the property is complete. New properties will also generally come with a build guarantee, providing additional piece-of-mind. Buying an off-plan development could however, mean there is a waiting period before you are able to move in or make use of your new Spanish home.
If you want to make use of your Spanish house immediately you will likely prefer a built and habitable property. A popular option for first-time international buyers is to purchase a property within a Spanish resort complex. This gives access to the resort’s facilities while you are staying in your property, and it will be well-maintained when are not in residence. Many popular resorts will also offer you a rental income for leasing the property back into their rental pool. New-build resort properties offer build guarantees similar to that of an off-plan development, and often come fully-furnished; allowing for completely hassle-free international property ownership.
If the idea of a new build resort isn’t for you, there’s plenty of opportunity to purchase individual resale properties across Spain. From luxury seafront villas to quaint mountainside villages, there is truly something for everyone within the Spanish property market. Re-sale properties can provide greater flexibility in location and often have character and features that resort homes do not offer. Sellers of re-sale property will usually take offers on the asking price, whereas new build and off-plan developments tend to have much more fixed prices.
If the choice becomes too much, it could be worth speaking to an advisor who can talk you through your priorities & guide you in the right direction.
Email [email protected] or call us on +44(0)1202 765011 to speak to someone today.
3. How much money should I expect to spend when buying property in Spain?
With property available to suit all types of budget and some excellent mortgage availability on property in Spain, you should set a realistic budget that you know you will be able to afford.
Currently, buyers are able to achieve excellent value for money in the Spanish property market. Eight years after the global recession, prices are slowly returning to their 2007 peak and there is still an excellent choice of property available. As prices continue to steadily rise, property in Spain will offer excellent opportunities for capital appreciation.
4. How do I get a mortgage to buy a Spanish Property?
Proof of income and affordability of the mortgage repayments are vital when applying for a mortgage on a Spanish property purchase. You must be able to provide evidence that you have a stable income and will be able to repay the mortgage lender.
With a multitude of options available and language barriers to contend with, the process can become timely & stressful. We are pleased to recommend Savills Private Finance, who can provide you with all the information you could require to purchase your first holiday home abroad, re-mortgage, or arrange a new mortgage on an international investment property. Reputable firms will be able to guide you through each stage of the application process.
5. Do I have to pay in Euros? How do I exchange my money?
Yes, if you’re looking to purchase property in Spain you will need to pay in Euros. There are numerous companies out there who specialise in the exchange of funds within this sector, and it’s important to find the right company for you.
Our highly trusted foreign exchange partners offer specialised services to ensure customers get the best rate possible. They are able to assist in future planning for currency exchange and allow customers to take advantage of fluctuating exchange rates, rather than being victim of them.
6. How easy is it to rent out property in Spain?
Spain, especially in the south, has a lovely year-round climate; attracting beach goers in the summer months and golfers, romantic couples & families all year long.
Proximity to facilities & amenities (bars, cafes, restaurants shops, golf courses) will typically have a positive effect on your property’s rental potential. Properties based in integrated resorts tend to have higher occupancy than standalone developments or villas. If rental potential is important to your property purchase, this is something to have at the forefront of your mind when searching for a Spanish property.
7. Do I need a management firm to manage my Spanish property?
If you wish to rent your property out, then using a management firm can be extremely beneficial. These firms will ensure the property is properly cleaned and prepared for tenants’ arrival, welcome them and ensure that the property is maintained both during tenants’ stay and after their departure. These firms will usually be responsible for the advertising of the property and all of the processes involved with the rental; ensuring a completely hands-off, hassle-free income stream.
8. What are the added costs involved in buying and owning a house in Spain?
The costs associated with purchasing a property in Spain will vary depending on whether you are buying a new-build or resale property, the price and whether you are buying with or without a mortgage.
Buyers should typically allow 10-12% on top of the purchase price for taxes and additional costs.
If buying a resale property, the biggest additional cost will be for ITP (transfer tax). This will be between 8-10% depending on the price of the property. Buyers will also need to pay notary fees (typically €400-€900), Land Registry fees (usually half the cost of notary fees) and lawyers’ fees (€1,000-€2,000). Those buying with a mortgage will also need to pay for the property to be valued (around €350), stamp duty (1.5% of mortgage deeds) and a lender’s commission (typically 1% of capital loan).
New-build property, which will come with a License of First Occupation, will not include any payable transfer tax. Instead, VAT is levied at 10% of the property purchase price; you will need to check whether this is included in the property’s advertised price or is an additional cost. Stamp duty will also be payable, at 1.5% of the purchase price.
As an overseas buyer you will need a tax identification number (NIE) issued by the General Directorate of the Police. This will need to be used on all tax returns and communications with the tax authorities and should be processed before completion of your property purchase.
The equivalent of an NIE for a resident is a Fiscal Identification Number (NIF). You cannot buy property in Spain without one of the two.
9. How do I find an estate agent for buying a house in Spain?
For an overseas buyer in Spain, finding a suitable estate agent can be a daunting task. As a stranger to the local areas you will need to find a trustworthy agent who will give honest and expert advice and guidance.
Unique in our field, Select Resorts Properties are based in Dorset on the South Coast of England and offer a bespoke home-finding service for those looking to purchase a holiday home in Spain.
Working in partnership with a number of agents in Spain, we build tailored inspection trips for our clients, to ensure their time spent in the country is fruitful & valuable. As we work independently, we’re able to recommend the best properties to fit a purchasers requirements & customers are able to make up their own mind, free of any biased pressure – ensuring you can trust the advice you are given.
10. How do I get professional legal advice when buying a Spanish property?
Similarly to finding an estate agent, when buying property in Spain you will need to find professional legal advice that you can trust. It is wise to invest in the services of an independent, English-speaking Spanish solicitor who will oversee the purchase process and advise you on tax and inheritance issues. This becomes even more vital if you are not a fluent Spanish speaker, as they will be able to guide you through the details and documentation.
It should be noted that a solicitor is not the same as a notary. A notary is employed by the government to ensure all legalities are followed during the transaction, but does not act in the interest of either buyer or seller. A solicitor, on the other hand will work on your behalf to ensure all contracts are how you want them to be and that you are protected from any hidden costs or charges left by the seller.
Buyers in Spain are not obligated to use a solicitor; however it is highly recommended and can save you substantial amounts of money and give you the piece-of-mind that all processes have been in your best interest.
At Select Resorts Properties, we will introduce buyers to our trusted legal partners, who will provide appropriate advice and assistance to ensure you are always in a strong position throughout the purchase process.
If you’re looking for a Spanish property purchase, our team of international property experts will guide you through each step of the purchase process and ensure you are able to answer each of these questions. For more information on the properties we have available for purchase in Spain contact our team today on +44 (0)1202 765011 of email [email protected].