Buying a property in Spain is an exciting but daunting prospect. There is a whole new language, legal system and currency to navigate. But it can be easy with a little planning and preparation. Here, we lay out the entire property buying process in Spain, including the professional team you need by your side.
How to buy a property in Spain
1. Find a trusted lawyer
Spain has tightened up its property laws in recent years, which is good news for those buying a home there but means more legislation to navigate.
Therefore, one of the first things you should do in your Spanish property buying journey is to find an independent, English-speaking lawyer (unless, of course, you speak Spanish!) who specialises in property law.
Lawyer vs notary: do you need both?
While some estate agents may suggest you only need the services of a notary, we would highly recommend also hiring a lawyer.
A notary is a legal professional – employed by the government – who oversees and rubber-stamps the paperwork involved in the property transaction, ensures all necessary taxes are paid, and registers the property with the Spanish Land Registry. The role of a lawyer, on the other hand, is to protect your interests and make sure your contract and property are exactly how YOU want them.
Your lawyer will ensure you are not liable for any leftover charges from the previous owner – such as mortgage costs and taxes – and that your property complies with planning and building regulations. They can also help you make a Spanish will and navigate the inheritance laws in your region of Spain.
In short, we advise you use both a lawyer and a notary during your Spanish property purchase.
2. Decide how you will pay for your Spanish property
How you plan on financing your Spanish home will determine what you need to do next. Are you hoping to sell your UK home? Or maybe you plan on taking out a mortgage for your Spanish property.
If you fall under the latter category, it may be worth hiring a mortgage advisor. Unlike the UK, getting the best deal on a mortgage in Spain can come down to ‘who you know’. Therefore, having a qualified professional by your side could make all the difference.
When deciding on a budget for your Spanish home, don’t forget to factor in additional buying costs, such as legal fees, the cost of a property survey and taxes. We generally advise allowing around 10-16% of the total cost of your purchase to cover these costs.
Can a non-resident get a Spanish mortgage?
Yes. You don’t need to be a Spanish resident to take out a mortgage, however, your residency status will affect how much you can borrow from a Spanish bank. Residents can borrow as much as 80% of the property’s assessed value, while non-residents are often limited to 50-70%.
Regardless of your residency status, you will need a Número de Identificación de Extranjeros (NIE), which is a tax identification number for foreigners, to get a Spanish mortgage.
If you are over the age of 60 and receive a pension, you can still take out a Spanish mortgage in your own name. Another option is to appoint a guarantor, such as a family member, to secure the mortgage.
Spanish mortgage interest rates
Most Spanish lenders use the annual Euribor as the base rate and then add their own margin on top (e.g. Euribor plus 2%).
Many Spanish mortgages are variable rate; however, non-resident mortgages are often fixed rate with a term of no more than 20 years.
3. Find and secure your perfect Spanish property
Now comes the fun part, searching for your Spanish property! But before you head out on a viewing trip, narrow down your search by focusing on a few key areas and types of property. Do you want a beachfront apartment, traditional townhouse or spacious villa? Focusing your search will save you both time and money.
Once you have found your perfect home, it is time to put an offer in. If your offer gets accepted, you will be asked to sign the pre-purchase contract (Contrato de Reserva) and pay a deposit. This secures the property for you, taking it off the market for a fixed amount of time (usually 30 days), and outlines the terms and conditions of the transaction, such as the deadline for the purchase. Most deposits range between €3,000 to €6,000.
It is at this point that it can be a good idea to get a survey done of the property. This will ensure you have complete transparency of the condition of the property before you complete the transaction.
If you are happy with the outcome of the survey, it is time to complete on the purchase. You will be asked to sign the deposit contract (Contrato de Arras) which is an agreement that commits both the buyer and seller to the sale. Usually, you will pay 10% of the property price on signing this.
After this, both parties must sign the title deeds at the offices of the Notary Public. Note that all parties connected with the sale must be present, including lawyers and mortgage advisors if applicable.
The final payment for the property must be made at the same time as the signing of the title deeds. After everything has been signed and the payment has been made, the keys can be handed over and the property is yours!
It generally takes anywhere from one to two months to reach completion.
4. Protect your budget from currency exchange rates
As mentioned above, there will be a period of time between making an offer on your Spanish property and actually making the final payment. If you are transferring your funds between currencies, such as from pounds to euros, it is important to consider the exchange rate and its inevitable fluctuations.
You will have agreed a price in euros, but if the exchange rate changes, this could cost you more in pounds than you had initially budgeted for. For example, in the last 12 months, a €200,000 property has varied in price by over £14,000 due to fluctuating exchange rates.
This risk can easily be mediated by using the services of a currency exchange provider, such as Smart Currency Exchange. They can discuss the best options for you, such as locking in an attractive exchange rate for up to 12 months, meaning you won’t have to worry about the pound potentially weakening against the euro and your property costing more than you expect.
5. Decide if you need a visa
The next question to ask yourself is how long you plan on spending in your Spanish property.
Now the UK is no longer in the European Union, British citizens will have to contend with the ’90-day rule’. This states that you can spend a maximum of 90 days in a rolling 180-day period without needing a visa. If you want to spend longer than this in Spain, perhaps for a permanent move or a split retirement between Spain and the UK, you will need a visa.
There are several visa options for non-EU citizens which we go into in more detail in our ‘Applying for a visa in Spain’ article. But in short, the most popular option for expats is the non-lucrative visa which grants the right to reside in Spain to those who can financially support themselves – usually through a pension or an income source from outside of Spain. Note that this visa does not give you the right to work for a Spanish company.
Another option is the Spanish golden visa. This grants the holder the right to live and work in Spain in exchange for a substantial investment, usually property worth a minimum of €500,000. This is a popular option due to its flexibility – there are no minimum stay requirements and several family members can be added on to the application.
You can apply for a Spanish visa in the UK at a Spanish consulate.