Despite the general concerns of the latest events, Spain is still one of the most popular destination for British people to buy properties. It is also one of the best countries to invest, as not only is it a great and friendly country (I may be biased here) with a great deal of sun, but currently there are still great opportunities for buyers. It is the time to negotiate a good deal for your holiday home and start your Spanish adventure.
However, make sure you are aware of the pitfalls when entering the Spanish market and do not hesitate to contact me to assist you from the outset.
A few top tips may be helpful once you have decided to start investing in a property in Spain. These are below:
1 – Location, location, location
It is important that you pinpoint the purpose of your purchase, so that you can establish what type of property will be better for you.
If you are thinking about renting the property out, you may prefer to be closer to the town centre or the coast and not in a rural location, as rural areas may only attract tourists in the peak season unless you are providing some alternative specific service (i.e. yoga retreat, etc).
You may also want to consider the saleability of the property in the future. A property which can appeal to both Spanish and foreign residents may be quicker to sell. You should also take into account the facilities provided in the area as these may attract a wide range of potential buyers.
2 – Instruct a Spanish qualified legal adviser from the outset
Always instruct a Spanish lawyer from the beginning. You can instruct your lawyer even before you find your dream home as they will be ready to answer any queries you may have once you find the right property.
It is important that your legal adviser is fluent in both Spanish and English language. As a bilingual dual qualified lawyer, I can explain to you the steps within the Spanish purchase with an equivalent in the English conveyancing, as you may be more familiar with them. I also have the benefit of being regulated by the Solicitors Regulation Authority, therefore giving you extra, which you are unlikely to obtain if you instruct lawyers based in Spain.
However, regardless as to the lawyer you instruct, I would strongly recommend they are independent from the seller or estate agent, to avoid any potential conflict of interest.
As I mentioned before, your lawyer will be able to assist you from the outset, advising you on any documentation which you may be asked to sign, review any sums you may be asked to pay and do the necessary checks and searches.
3 – Check the overall cost of your purchase
Your legal adviser will be able to give you an estimate of the costs you are likely to incur in the transaction. This will assist you in understanding the costs and expenses of purchasing a Spanish property to make sure you have the funds available.
The costs you are likely to incur may vary depending on whether the property is a resale property or a new development. You will also need to pay taxes for the purchase (an equivalent to the stamp duty), as well as paying third party expenses such as the Notary Public fees and Land Registry, among others.
There may be extra costs during and after the purchase process, such as a surveyor fee, bankers’ cheques commissions, property insurance and ongoing tax liability in Spain. You will also need to bear in mind that, merely for owning a Spanish property, you will need to submit annual non-resident tax returns in Spain and pay the appropriate taxes.
4 – Be aware of Estate Agencies
Please be aware of the role of the Estate Agents. Although they will try to appear helpful, they have a contract with the seller to sell the property and a commission is (at least in the majority of the cases) paid by the seller, in the same way as in the UK. Therefore, on occasions they may try to close the deal not always in your own interest.
My recommendation would be never to pay any deposit money without making sure there is a contract in place. That contract should have been checked by your legal adviser first to make sure it protects you. And definitely never agree to pay any money just to make an offer. Any payment of a deposit should be made once the purchase price has been accepted by the seller.
Unfortunately, there are many estate agents who are still taking advantage due to buyers’ lack of knowledge of the Spanish system. They may try to pressurise you to make unnecessary payments or close a deal without you having made the appropriate checks.
5 – Currency / Mortgage
Because the transaction is most likely going to be carried out in Euros, it is recommended that you have a Spanish account. When sending funds to Spain, you should check your options to try to obtain a good exchange rate. Transfer via a currency exchange company may save you commission charges, as well as giving you a better exchange rate.
If you need a mortgage, there are specialised international mortgage brokers in the UK, who may be able to assist with choosing the best deal for you. It is important that you understand the terms and conditions of the mortgage agreement in full before going ahead, and your lender must explain the documentation you need to sign.
6 – The impact of Brexit – Spanish VISAS
Unfortunately, unless you become a Spanish resident, British nationals are only able to stay in Spain for 90 days within a total period of 180 days without a VISA. There are many requirements to obtain a VISA in Spain but if you are thinking about becoming a resident, it will be worth checking if you can obtain one.
Whatever you do, you should do your homework beforehand to make sure you are totally happy to invest in a foreign country and, over all, you must enjoy the process.
I will be happy to assist you and make the process enjoyable from start to finish.
If you have any queries in relation to your Spanish adventure, please do not hesitate to contact us on 0333 400 4499.