BUYING A HOUSE IN SPAIN
1. Why buy a property in Spain?
Spain has a pleasant climate compared to many countries in Europe and other countries outside Europe and even the sunlight throughout the year makes life very pleasant. The country also has a fully developed infrastructure for tourism and entertainment. It’s a short flight to Spain from a different city in Europe and Spain is a member of the EU, which means that mostly the same rules apply as in all other EU countries when you buy a home.
2. What attracts foreigners most when it comes to buying a home in Spain?
The climate and above all that it is sunny almost all year round. Good food and nice warm sandy beaches.
3. What are the most popular areas?
Costa del Sol, Costa Blanca, Costa Cálida, Mallorca and the Canary Islands.
4. Who are the people who buy properties in Spain?
The majority who buy a home in Spain are over 50. But in recent years people aged 35–40 have also started buying a holiday home in Spain. Several have moved there permanently and work from there today.
5. What does the housing market currently look like?
The housing market in Spain varies between the inland areas and the coast. Inland, Spanish buyers dominate, while coastal areas attract international investors, driving up prices.
During this year 2024, housing prices have increased by an average of 4%. The high demand for new homes, which exceeds the available supply, has contributed to stable and rising prices. New construction has decreased since the housing market crisis years ago, and developers are now more cautious, waiting to start new projects until previous developments have been sold, ensuring a balance between supply and demand.
A continued rise in prices is expected as interest rates begin to decrease and the number of mortgages increases, which could further drive demand. The resale of second-hand homes has also risen.
6. Where do I start when I want to buy a house in Spain?
About 13% of which 10% VAT plus about 3% costs for the home purchase are added to the housing price on all the Spanish coasts: Legal documents, Notary fee for the Deed, stamp, property register and more. Approximately 21% VAT is added to the garage's price if purchased separately. 21% is added to the price of the furniture package if you buy separately or if they are not included in the home purchase.
7. What should I think about when buying a property in Spain?
Decide on the area where you want to live and then let our expert show you that area.
8. What is the difference between buying a house in Spain and in my own country?
Spain has its system, therefore it is very important to have the help of a broker who can also guide you through the legal process. In addition, the entire deal is reviewed by a Notary Public at the time of signing the purchase contract, deeds, and other contracts, like electricity and water.
9. How does the bidding work?
In Spain, it is rare to have multiple prospective buyers interested in the same object. The price is fixed but you can bid below the set price and then the broker negotiates further with the seller to reach a final price. For newly built homes the prices are fixed by the developer and they do not negotiate to reduce the price.
10. Deposit/reservation fee. How much cash deposit do I have to pay?
The initial fee should be approximately 40 percent for new construction and 10 percent for second-hand homes. At the drafting of a contract for a second-hand sale, you, as the buyer, must pay a down payment. Typically the down payment is 10 percent of the purchase price. Final payment is usually made on the day of access.
If you decide to buy a new house a booking agreement is drawn up with the promoter in which you pay a booking fee of € 6,000. You can usually pay the reservation fee with your credit card. Then you have 2–3 weeks to sign the purchase agreement and start the payments according to the contract.
11. Can I request a bank loan to buy a home in Spain?
You can get a bank loan in Spain and use the intended home as collateral. The amount you can borrow depends on the value of the home, as well as your income and debts. They provide Europeans with up to 60 - 70 percent of the value appraised by the bank. The main rule is that Spanish banks often do not grant a loan when your living expenses and debts exceed 30% of your income. There may be a little difference in the requirements between them of course.
12. Taxes
Today, there is a value-added tax (VAT) of 10 percent for new production, a single tax, and 10 percent for the transfer of property (ITP) from one person to another when you buy a property in Spain. Taxes may vary between areas.
In Spain, you pay a municipal property tax based on the assessed value. The tax rate varies between municipalities and ranges between 0.4 and 1.1 percent. You also pay a state estate tax of approximately 0.5 percent, which is also based on the assessed value of the home.
13. The public title deed
In Spain, a title deed is issued for every house you buy. Condominiums do not exist in Spain. The deed is issued before the Notary Public and then the lawyer registers it in the Spanish Registry of Deeds. Housing fees are lower in Spain. Property owners only pay community fees for, among other things, the association's operation, such as common areas, garden, pool maintenance, stair cleaning, and elevator maintenance. If you own a garage space, you also pay for its maintenance duties. In developments or buildings with a common surveillance system, a fee is also paid for the services.
We often collaborate with an English and other language-speaking law firm on-site to make home-buying easier for our clients.
14. How big are the ongoing operating costs?
The costs of running your house in Spain naturally depend on the type of house you have bought and how much you use it. A conservative estimate of total operating costs for a 3-bedroom apartment is around €100 – €150 per month, depending on whether it is a new or used home. The cost includes community fees, electricity and water, home insurance premiums, and real estate tax (ibi that is paid to SUMA once a year).
15. Legal service
We put you in contact with our law firm which speaks several languages. Together we help you:
- Obtain a registration number from the Spanish Treasury (NIE) for the purchase.
- Open a bank account to pay direct debits and taxes and receive income.
- Review all documentation for acquisition.
- Title of Deed for a Notary Public.
- Registration of Property before the Spanish authorities.
- Seal of Scripture.
- Management of home insurance, water, and electricity subscriptions. In short, all the formalities so that you receive the title of the property and the keys and do not have to worry about bureaucratic issues.
Law firms offer the security that the client needs to carry out a secure transaction.
