SPAIN

Buying property in Madrid, Valencia

Buying property in Spain offers a unique opportunity for both expats and locals due to the country's high homeownership rates (around 80%) and welcoming stance toward foreign buyers. However, the market presents several challenges and nuances that are important to consider before making a purchase.

Market Conditions:
Post-Crisis Recovery: After the financial crash of 2008, Spanish property prices dropped significantly but have been steadily recovering since 2016.
Current Trends: The COVID-19 pandemic affected the market in 2020, with international property sales declining, but prices still showed modest growth.

Buying vs. Renting:
Renting might be more suitable for short-term stays or for avoiding high capital gains taxes. Local laws vary across Spain's 17 regions, with stricter rules on holiday lets in popular areas like the Balearic Islands and Madrid.

Eligibility for Expats:
Expats can easily buy property in Spain with the requirement of a financial identification number (NIE). However, non-residents typically need larger deposits, as mortgage loan-to-value (LTV) ratios are lower than for residents.

Cost Breakdown:
Property transfer taxes, legal fees, notary costs, and VAT can add up to 10–13% of the property price. Buyers must also be cautious about potential debts attached to the property, which transfer with ownership.

Buying Process:
Offers are usually made through estate agents, followed by a preliminary contract and a deposit of around 10% of the purchase price. Final contracts are signed in front of a notary.

Legal Due Diligence:
Hiring a lawyer is strongly recommended to ensure due diligence is conducted. This includes verifying property titles, planning permissions, and checking for debts tied to the property.

Insurance and Utilities:
Building insurance is often mandatory, especially if you take out a mortgage, while contents insurance, though optional, is recommended. Setting up utilities, waste disposal, and telecommunications are logistical tasks post-purchase.

Buying Land and New Builds:
Due to past property scams, it’s crucial to verify that new-build homes are properly registered and have necessary planning permissions before signing any contracts.

Conclusion:
Buying property in Spain is attractive but comes with specific risks and costs. Thorough research, legal support, and careful planning are essential to navigate the Spanish property market successfully, whether you're investing in a new home, or a holiday let.

We can search, source, and provide the very best property options available for you before negotiating, securing and moving you in.

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