Do you want to know how to buy a house in Spain? In this article, we’ll explain some of the key differences to the UK home buying process, but make sure you engage the services of a professional before committing to your dream home.
Update: After Brexit, some new rules will apply to Britons moving to Spain. Ownership of the property should not be affected, but if you are moving permanently there will likely be some changes. Click here for official information for UK citizens moving and living in Spain. and current Tips for traveling abroad to Spain..
How to find a property in Spain?
First of all, you must decide what type of house you want. Are you looking for an apartment with sea views, a historic property in a local village or a country estate set on its own land? Making a list of all your requirements and dividing them between “must haves” and “nice to haves” can save you a lot of time and make your search process much more efficient. For example ‘Must have a minimum of 3 bedrooms’ and ‘It would be nice to have a balcony’.
Next, you need to find properties that meet your list of requirements. There are several popular online portals that you can use, many of which are available in English to make the search process easier.
Popular online real estate portals
Below you can find some of the most popular Spanish real estate portals:
Should I use a real estate agent?
Many of the properties you see online will be managed by real estate agents. Some will speak English (certainly in more touristy areas) and most are used to dealing with foreign buyers. While real estate agents can help provide detailed information about the area or city you are looking for, it is recommended to approach them with some caution.
Regulation is relatively low in Spain and, as in the UK, there are unscrupulous estate agents. Always remember that the seller pays the agent (more on this below). Ultimately, they are trying to sell a property and will usually only show the positive aspects of the property, not its flaws. Never provide upfront payments and try to stay away from agents who suggest taking shortcuts. Some may suggest you use their connections, but we strongly recommend finding your own notary, mortgage provider and attorney so you can fully trust them to be on your side.
Buy a Spanish property
The process of buying property in Spain is simple but markedly different to the process in the UK. In the following sections you will find an overview of the most important aspects to consider when purchasing property in Spain.
The purchasing process
Initially, you will make an offer on the property of your choice, usually through the seller’s real estate agent. If the offer is accepted, the next step is for the buyer and seller to sign a preliminary contract (called a contract private purchase and sale contract) and then the buyer pays a deposit, usually 10% of the purchase price. Any checks (regulatory, construction surveys, soil tests) you wish to carry out will need to be carried out before this point. This is especially important if you are thinking of purchasing a rural property (undeveloped land) where it is not always clear what was built within the rules and what was built illegally.
You should also be aware that if you buy a property that is dilapidated, or where some of the outbuildings are dilapidated, it is not always easy to return these ruins to living condition. The exact regulations depend on the region, but in most cases a ruin will require having a partially or completely intact roof in order to obtain permission to renovate it. In any case, no matter what the real estate agency promises you, it is essential that you consult with a local architect or directly with the authorized town hall.
The buyer then arranges a mortgage if necessary, although they should have already discussed their needs with the mortgage provider. Spain has been going through a very serious real estate crisis since 2008, which has caused banks to make it much more difficult to obtain a mortgage. See the Mortgages section below for more information.
The next stage is for the purchase and sale contract (Sell script) to be signed before a notary, at which time the full sales price, taxes and other costs must be paid. If you do not live in Spain at the moment, it is recommended that you give a lawyer access to your bank account through a power of attorney so that he can go to the bank, collect the bank check and then go to the notary to sign. his name, pay the seller, and pay any taxes owed.
Even if it is not a legal requirement to complete the sale, it is highly recommended to use the services of a notary to ensure a smooth transition of ownership. This will also be a requirement for most mortgages.
The seller is officially responsible for hidden defects in the property, even if he or she is unaware of them. However, in practice obtaining compensation for such failures can be difficult and expensive. If you are unsure of the condition of a property, it is best to have a survey carried out by an independent third party before paying the deposit or as a condition of paying the full sum while paying the deposit.
It is your responsibility as a buyer to pay all costs and taxes associated with purchasing a home. If he has decided to use the services of a lawyer, he will be able to advise him on everything he should take into account.
The buyer is also responsible for registering the property. The notary may provide this service for a fee and/or may notify the registry office that the sale has been made, without completing the full registry.
Purchase financing: deposits and mortgages
After the credit crisis of 2008, Spanish banks have been heavily restructured with significant international participation from the EU and the IMF. As a result, banks are approving fewer mortgages and mortgage rates and terms have become less favorable.
One thing to keep in mind is that the value that banks place on a property can be very different from the actual market price. Furthermore, for a rural property you can only obtain a mortgage for 50% of the bank valuation of the property. Therefore, it is absolutely crucial that you speak to a bank first before making a deposit.
In Spain, mortgage lenders will not sign a mortgage contract until you own a property. For this reason, it is important to include a clause in the contract that allows you to get out of the agreement if you are unable to acquire a mortgage.
Rates and charges
Most costs are borne by the buyer in Spain and there will be significant variations in costs from region to region. As a general rule, additional fees and charges paid by the buyer will be between 8 and 12% of the purchase price and will include:
- Property transfer tax of 5 to 10 percent (existing properties);
- VAT (or IVA) at 10 percent (new properties only);
- Notary fees, property title tax and property registration fee between 1 and 2.5 percent;
- Legal fees of 1 to 2 percent (VAT included).
Real estate agent fees are usually paid by the seller, but it’s good to check with your agent at first. FYI, real estate agents typically charge the seller around 3% of the final sales price.
Capital gains tax
In Spain the capital gains tax varies between 21% and 27%. Sellers who want to minimize their taxes sometimes suggest agreeing to a lower sales price and receive the rest in the infamous brown envelope under the table. Needless to say, this is not a good idea, as accepting it has very real negative consequences. First of all, it can cause legal problems. Second, by agreeing to a lower sales price now, you yourself will have to pay more taxes if you decide to sell the property. See below for an example of how this could work:
Choose a reliable lawyer
Is highly recommended that you choose an independent lawyer specialized in Spanish real estate law (town planning). We recommend that you also check that your prospective lawyer is registered with the local bar association. (Law School). Of course, this does not guarantee competence, but at least it guarantees that you will be dealing with an official lawyer. A good place to start is a list of English-speaking lawyers divided by region which can be found on page GOV.UK website.
The Spanish property conveyancing system is different to the UK system, so you need to ensure that those involved in the transaction are qualified and experienced in Spain.
Finally, it is worth mentioning that real estate agents in Spain will often be able to recommend a lawyer. It may not be ideal to accept this offer as you will want to be 100% sure that your solicitor has your interests first and foremost rather than having the conflict of acting for both you and the seller, estate agent or both. .
How to pay for your house in Spain?
The final step; How to pay for your house in Spain. Firstly, you will need to open a Spanish bank account. There are several banks that offer a bank account specifically aimed at expats, where you can open an account with just your passport and your NIE (see This article on how to obtain your NIE). Some examples are Santander Bank and Sabadell Bank.
Transfer money for purchases abroad
Now you probably have a UK bank account with your budget in pounds sterling and you will need transfer this money to your Spanish bank account in euros. Calling your UK bank to ask them to transfer the money would certainly be one way to do this, but could result in inflated rates and potentially incur additional fees.
A currency exchange company like World first can help solve this problem by offering competitive exchange rates while also providing you with a fast and hassle-free transfer. Get in touch and we can discuss this with you in more detail.
There you have it, everything you need to know to buy a house in Spain. Let us know in the comments if you have any more questions or want to share personal stories about buying a home abroad.