Property Cheat Sheet: Spain

Despite Brexit, Spain remains one of the most common destinations for British expats, especially retirees. While Brexit has added complications to gaining citizenship, purchasing property remains relatively painless and can even assist in a path to residency or citizenship. If a property you want to purchase is worth more than 500,000EUR, then you can gain access to the Golden Visa programme. 

Of course, the first thing you will need to do is set a budget and pick a location. The south coast is a common destination where a lot of home British comforts will be available, along with the tremendous weather Spain is known for. English speakers and other expats will also be more common. Inland, there is natural beauty aplenty. From the rolling hills of the Rioja wine region to the more mountainous yet still lush Galicia, there’s something for everyone. 

In terms of cities, Madrid and Barcelona are international cities to rival any throughout Europe. Bilbao, a former port city, has reinvented itself as a centre of culture, with lots of modern architecture contrasting its historic quarters. 

Other things to consider when searching for your property are

1. a)     the qualifications of the estate agents you’re using,
2. b)    that there are no outstanding obligations on the property,
3. c)     that there is adequate planning approval and that the structure of the property is sound, which a surveyor should be able to ascertain.

It’s also worth mentioning that, when setting a budget, taxes associated with a sale are paid by the buyer, with a property transfer tax of 6-10% varying across regions, notary costs (title deed, land registration etc.) of 1-2.5% and legal fees of 1-2%. 

Administratively, you will need a NIE (Número de Identificación del extranjero). This is a unique identification number that allows you to make transactions in Spain as a foreigner. It will appear on all documents that you sign or are issued to you in Spain, so you will need it before signing a deed. It is not difficult to obtain but can take a long time to acquire. Working with an estate agent can speed up the process. Having a bank account in Spain will also make a lot of processes easier. The final administrative factor to consider is that if you own a property in Spain, but are not a resident, you will need to appoint a tax representative. 

The actual purchasing process begins when the buyer pays a fee and reserves the right to purchase a property, the ‘reservation agreement’. A letter of intent may also be presented by either party and negotiated before the purchase is finalised. Generally there will be a holding fee of around 3000 to 6000EUR. The mortgage will then be confirmed, the deposit is usually around 20% of the property value. The purchase contract itself is known as the contrato privado de compraventa and a 10% deposit will be paid to the seller. All parties will then come together: the buyer, the seller, lawyers and mortgage provider for the final signing and transfer of ownership. 

Of course, these funds will almost always be in Euros. Currency UK ensure that our clients get the most out of their money when making currency exchanges, especially when dealing with large sums. We can also hold money on account for you prior to your purchase and lock in an exchange rate for you giving you certainty on your property purchase or sale.