Buying Spanish Property
It is a very exciting time, when we start the process of owning our own home. Even more exciting is buying a Spanish property, and making the transition to expat. Let us just remind you, living under the Spanish sun is fabulous!
Making the final steps in your purchase of a Spanish property will no doubt be a blend of excitement and anxiety. The sheer feelings of excitement and anticipation can sometimes be a driving force; but common sense and good judgement is also needed when making a considerable property investment. Dealings in property may be out of your usual comfort zone. In some cases, like when buying a property in Spain, the geographical area can be completely brand new to you. So of course, questions will arise, and to be perfectly honest, you should indeed be asking several questions.
For the first time home buyer, knowing the right questions to ask in order to make a correct decision is imperative. Getting the answers and the advice you need from a trusted real estate agent in Spain is equally if not more important. In order to help you with the process, we’ve compiled a list of important questions you should be asking before buying a Spanish property.
Spanish Property Q&A
- Where do you want the property and why?
This may seem like a straightforward question, but it’s very important that you look into the different areas of Spain in order to assess what is there for you and what is not. It is very important that you buy your home in the most suitable location, whether for you personally or for a business. Are you quiet people looking for some tranquillity, away from it all and are prepared to live a more rural life? You may love that view from the beach side apartment, but maybe it’s not for you come the busy tourists’ season of summer.
If you have children, make sure to ask what amenities are close by, and of course check schools. Going to the beach every weekend or playing in the pool every day will get boring quickly – so making sure that certain activities are available for the kids is important.
- What type of property investment are you making?
Do you require the property for yourselves, for example are you retiring? Or will you rent it out as a holiday home, taking advantage of the tourists in Spain? If you are making an investment and planning to take advantage of rental income, then a beach side apartment might be the perfect property.
- How are your finances?
Of course, in situations like making a property purchase, being as realistic as possible about personal finance is important. You must ask additional questions when it comes to financial issues; for example, will you need a mortgage? When it comes to buying a property in Spain or abroad anywhere else for that matter, we must consider the possibility of hidden costs. This is where a Spanish real estate agent comes in handy. A trusted estate agency in Spain will tell you and even list for you the additional costs involved.
- Getting the first Mortgage – What happens?
As previously mentioned in question #3, considering a mortgage will require additional information. For now, it’s important that you know, although mortgages are more expensive to arrange in Spain the interest is much lower. It is important to ask what loans you may qualify for, as this will be a factor as to whether you can put up the initial cost percentage.
- What loans do you qualify for?
You must find this out as you will be expected to come up with at least 20 – 30% of the asking price, plus the mortgage costs.
- What are the extra costs like taxes and insurance?
- Municipal Added Value Tax (PlusValía):
- Rates or Annual Property Tax (IBI):
- Rubbish Tax (Basura)
- Wealth Tax (Impuesto de Patrimonio)
- Income Tax (Impuesto sobre la Renta)
- Capital Gains Tax (Impuesto sobre Ganancias Patrimoniales Inmobiliarias) and Retentions
- Municipal Added Value Tax (PlusValía):
- Get Title Insurance.
You must cover yourself and your property by purchasing Title Insurance if you want complete peace of mind when it comes to the security of your home. This will cover the property owner for sudden or unseen eventualities like third party claims such as undisclosed heirs, unrecorded tax liens, alteration or loss of title documentation, fraud, forgery and even typographical errors that may affect your title. These may seem like small matters but can have huge consequences if not anticipated and dealt with at the offset.
- Do I need a property expert?
The answer to this question is a resounding ‘YES.’ It would be very short sighted to say the least to think that you will not get lost in the complex property maze. If you do not have someone who knows exactly where to lead you out of any potential danger areas that you did not anticipate. To try to navigate this complicated and involved area in another country, with limited knowledge you are in fact setting yourself up for both headache and heartbreak.
There have been so many cases now of investigations into unscrupulous real estate agents, selling illegal properties that left innocent and unknowing people totally bereft. It is just not worth the risk. Our best advice so far is do not do it! Find one, like Euro Prestige who are already well established and have a proven history and track record of the real estate and property market in Spain.
This is what we do best and why we are here to help you.