Spain has a ton of things going for it and it’s easy to see why so many foreigners buy a home here every year (around 63,000 every year). Not least, the pleasant year-round climate, excellent communications, wallet-friendly lifestyle and the wide range of properties.
But nowhere is perfect and Spain is certainly no exception. While the list of drawbacks doesn’t run long, it does contain a few downsides that are well worth thinking about before you take the plunge and make a major financial investment.
High buying costs
You might be surprised to discover that you’ll need to budget a lot extra for buying costs and fees. Allow for at least 8% of the purchase price and up to 13% in some parts of the country.
The bulk of the cost goes on Property Transfer Tax whose rates range from 4% of the price in the Basque Country to 10% in Catalonia (home to Barcelona, the Costa Brava and Costa Dorada) and the Comunidad Valenciana (Costa Blanca).
Top tip – include the costs and fees as part of your budget.
Pitfalls and problems
You’ll be more than familiar with the horror stories about buying property in Spain that the foreign press loves to publish.
Yes, there are potential pitfalls and problems on the legal side of a property purchase. But, if you take independent legal advice from a specialist lawyer from day one, you won’t experience any of them.
Top tip – contract a reputable lawyer before you sign or pay anything.
Unexpected renovation costs
As we all know from Grand Designs, refurbishment work is never simple. And a property that needs renovation in Spain has the added complications of the language and culture. An atmospheric country home in deepest Mallorca or a charming 70s villa in Marbella might look easy to turn into your ideal home, but how much will it cost you? To find out, get a detailed quote from an architect and builder.
Top tip – get those quotes before you commit to a purchase.
High running costs
Owning property doesn’t come cheap anywhere and in Spain, you’ll be liable for several costs annually. They include community of owner fees, local council tax and non-resident property tax. Not to mention utility and maintenance costs.
Top tip – before you buy, do your homework and get an itemised list of estimated costs to determine if you can afford them.
Discovering you can’t let your property
Holiday letting is a lucrative business and many homeowners in Spain easily cover their running costs from short-term rentals. But holiday letting isn’t automatically permitted and, in many areas, local councils and/or communities of owners actually forbid it.
Top tip – before assuming you can buy to let, double-check that you will get all the permissions and permits to do so.
The tips included in this article are an extract from Your Guide to Buying Property in Spain, 12 comprehensive chapters that contain everything you need to know. From the first steps (such as those above) to that moment when you finally become the proud owner. Via everything in between.
Guide to Buying Property in Spain9.95€ inc. VAT