Buying a property in Spain is a big decision but it doesn't have to be a difficult process. Take things slowly, ask lots of questions, read around the subject and make sure you take legal and financial advice. The following steps apply to anyone who is considering a property investment in Spain whether it's for a retirement home, holiday home or investment property.


1. Decide why you are buying

Before you even think about looking at brochures, visiting property exhibitions or searching the Internet, take the time to rehearse exactly what it is you’re looking for. This may sound basic, but the reasons for your purchase will affect all the subsequent decisions that you have to make. Some people buy property purely as an investment; others want to relocate, some want a second home on the sun.
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2. Choose your location

If you’re looking for investment property, for example, it’s important to choose a property of the type and location that will give you a maximum return. As a general rule, properties by the coast attract higher rental incomes. If you want a property to retire to, consider buying somewhere further inland to get more for your money and think about how far you’re prepared to travel for shops and other amenities. If you plan to make a permanent move and take up employment in Spain you may be more interested in properties that are close to the major population centres.
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3. Decide your budget

There are always hidden and additional costs when you buy property and Spain is no exception. As a general rule, allow 10% - slightly more for new and off-plan properties - on top of your purchase price, to cover various taxes and legal fees. You can get a mortgage in the UK or in Spain and, for the latter, it is normal for banks to advance a loan of up to 70% of the declared value of the property. For more information on mortgages and advice on avoiding a potential pitfall.
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4. Do your research

Once you have a clear idea of what you want to buy and where, spend some time on detailed research. Magazines, Sunday supplements books, guides and the Internet are all useful sources of information and it’s a good idea to visit a few property exhibitions.
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5. Visit in person

Never buy any property without making a personal visit at least once. While you’re there, spend some time in the immediate area, get to know people, ask questions and find out what the local amenities are like. See how the environment changes throughout the day. Are there busy times where traffic becomes a problem? Is there a noisy bar or club nearby? Where’s the nearest hospital?
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6. Find a lawyer

Spanish property law is complicated so make sure you have a good local lawyer to look after you interests. Lawyers will usually charge you 1% of the sale price of the property but it’s an excellent investment for peace of mind. Be aware that under Spanish law only the person named on the title deed has the right to sell the property and that some investors have been tricked into paying large sums of money to people who were merely tenants of the property.
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7. Negotiate terms

Once you’ve chosen a suitable property, the price and conditions will need to be agreed. It is quite acceptable to make an offer subject to mortgage approval and, for properties that are still being built, you’ll want to agree a schedule of stage payments rather than pay the whole amount up front. If you haven’t already appointed a lawyer, you must do this now or run the risk of entering into an agreement that cannot be enforced under Spanish law.
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8. Be prepared to act quickly

The property market in Spain is buoyant and properties can sell extremely quickly. Assuming you’ve done your research and have appointed a lawyer; be prepared to make a fast decision and back this up with a deposit (usually around €3,000) to secure the deal. The deposit is usually preferred to be made by cheque, however it is also possible to pay by cash or credit card.
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9. Exchange contracts

- Resale properties
With the offer accepted and the deposit paid, the next step is to exchange private contracts, ‘Contrato privado de compraventa’, which states the agreed price and what is to be included in the sale. This usually happens within two weeks from the offer being accepted and its where your lawyer really starts to earn his money by conducting property searches and making sure that there are no outstanding debts attached to the property, for which you may be liable. This is confirmed in a document called a Nota Simple (Nota simple informativa - Extract from the land register). In most cases you will now be required to pay a non-refundable deposit of around 10%.

- New Build Properties

Once you have selected which property you would like to purchase, the constructor will require a deposit from you, usually of 3,000 euros, to take the property off the market.  This is paid at the same time as the purchase contracts are drawn up and signed.  The stipulated payments within the contract differ between builders, and the stage of construction of the property that you wish to buy.  However, the standard payments are usually two payments of 25% in the first two months, or one payment of 30% in one month, worked out against the value of the property.  The rest of the funds are payable at the notary when you sign the title deeds.  It is at the notary that also, that the payment of 7% IVA (the equivalent of VAT tax) is payable.

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10. Final completion and registration of the title deed

Final completion takes place when the title deeds are signed before a notary and you pay the balance of the purchase price. The signed deed is lodged with the land registry and your lawyer will take care of the remaining formalities such as payment of the relevant transfer taxes.

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