Advice for Buying a Property in Spain
Buying a property in Spain is a very different from the UK process. Therefore it is essential to use the services of a professional estate agent and solicitor to guide you through the whole buying process to ensure you join the majority of people who have a trouble free journey to owning their new home in Spain.
The UK media is fond of repeating the tales of woe of those unfortunate people who fell foul of cowboys and dodgy builders and ended up with an illegal property or on an off plan development that was never finished properly. Fortunately these cases represent a very small minority and mostly happened several years ago in the greed led property boom. Now most of the cowboys have been chased out of town and the corrupt mayors are in the jailhouse and new stronger regulations are in force to protect the buyer. However you should still endevour to use experienced estate agents and solicitors who have earned a good reputation over many years.
The following are the main points to consider in sequential order for buying a property in Spain.
FIRST: Decide the Main Use - Holiday Home or Main Residence or Future Main Residence
This is important because it determines your choice of region and area. The requirements of a holiday home are totally different from those of the permanent resident. Normally the holiday home should be near an airport or two, should be close to the beach and holiday entertainments and be easy to maintain. These attributes will also make it easier to rent out to produce a holiday letting income. Consideration should be given to properties that offer 24/7 security for a lock up and go property with low maintenance to avoid spending valuable holiday time working.
If the property is to be used as a main residence the normal requirements are to be away from the tourists areas and in attractive locations where there are other permanent residents with amenities and activities that are open all year round and not closed up in the off season. This opens up other areas for the permanent resident which may offer a better quality of life and at the same time be less expensive than the holiday areas.
There is also the consideration for the climate in winter. For example the areas south of Alicante to Almeria have the best winter temperatures and are most suitable for full time or winter residents with plenty of all year round activities and culture.
SECOND: Plan How Best To Finance Your Spanish Property
You will have to determine the budget for your new Spanish home which should include all the buying costs which are currently around 12%-15% of the purchase cost plus mortgage costs if required. This is made up of:
RESALE Properties Transfer Tax: 10% (Valencia) 8% (Murcia)
NEW Properties Taxes : 10% IVA (vat) + Stamp Duty 1.5% (Valencia) 2% (Murcia)
10% IVA (Vat) instead of transfer tax
Notary & Legal Costs: 2% approx.
Notary and registration fees are around 1,500 Euros. Then there is 1% for your legal costs/solicitor
Mortgage Costs: 1%-2% bank set up charges
Spanish mortgages are still available up to 70% loan to value (LTV)
THIRD: Choose Your Estate Agent
You are already using the internet so from the security of your own computer you can select an estate agent who can offer the experience, area knowledge and choice of the sort of properties that appeal to you. Request detailed information not just on the properties that interest you but also about the areas and amenities that are available.
As in the UK Spansih estate agents are paid a sales commission by the vendors so their service should be free to the buyer.
Fourth: Choose the Region/Area as the Location is of Equal Importance as the Property itself
Remember just as in the UK the location is as if not more important than the property itself. So choose an agent who has a wide experience of different areas and ideally who can offer a property finding service and who is prepared to show you different areas in diiferent regions.