Buying property in Spain is an interesting and exciting move – but there are many things to consider before doing it. Here is a checklist of relevant things to consider before you do so, and how to buy a property in Spain without complications.
The easiest way to prevent surprises and deal with excessive paperwork is to understand how the purchasing process in Spain operates thoroughly. Here is a list of the things you should carefully examine if you are buying real estate in Spain, whether it be a home, an apartment, a plot of land for construction, or a farm. Your independent legal representative should consider this before advising you if you have appointed one or plan to do so.
1. Make sure your registration is taken care of before buying.
You need an NIE, which stands for “Number of Identification of Foreigners”. It’s a tax identification number for foreigners in Spain, and you require one to open a bank account – which will be necessary to begin the purchasing procedure immediately. So before buying any property, you need to ensure you have an NIE number.
2. Find a good lawyer (that speaks your language).
Finding a good lawyer that understands your needs but who also speaks your language is incredibly important. It’s also important to find a good law firm like Tejada Solicitors that will give you the necessary legal, fiscal, and urbanistic information you need to precisely calculate the costs of purchasing a property in Spain. By finding a lawyer team with conveyancing expertise and combining them with tax advisors for international taxation, you’ll have all the information you require.
3. Calculate your budget: do you need a mortgage?
There are two ways in which you can finance your home in Spain, and it’s easier than you think. You can either buy your property out of pocket or you can get a mortgage. Spanish and foreign banks both offer mortgages; some even have unique offerings for expatriates from particular countries.
As an international buyer, you can only borrow at a lower loan-to-value (LTV) rate than Spanish citizens, meaning you will need a larger down payment. Residents in Spain may borrow up to 80% of the property’s assessed value depending on the type of mortgage, while non-residents may only be able to borrow between 60 and 70% LTV.
4. Breaking down all the costs involved.
Cost of buying a property in Spain vary by region and are frequently negotiable. For example, there are no set costs associated with hiring an estate agent or a lawyer. The majority of the costs, which are typically as follows, must be covered by the buyer:
- Property transfer tax: 6–10% (existing properties) / VAT (or IVA) at 10% (new properties)
- Notary costs, title deed tax, and land registration fee: 1–2.5%
- Legal fees: 1–2% (including VAT)
5. Register your property
Even though registering a property with the Land Registry is not required in Spain, it is the primary means of legal protection that the buyer has. This means having the property legally registered in the buyers’ name.
The best course of action for registering a property in Spain is to work with an advisor who is familiar with the necessary process. Then, they can provide you with information on the registration fees, which vary depending on the value of the property, but usually ranges between €600 and €1000.