If you are planning a move to Spain, it’s likely you are trying to decide if you should be renting or buying in Spain when it comes to where to you are going to live. Whether you rent a flat or buy a house will depend on your long term goals. Do you plan to live in Spain temporarily or indefinitely? Are you absolutely set on where in Spain you want to live?
In most circumstances, I always recommend renting for 6 to 12 months before buying in a new area. We have moved several times within the United States, and we rented each time to really make sure we knew where we wanted to live. After a year, we almost always ended up choosing a different part of town or neighboring area. It can be really helpful to rent for a while to make sure you truly love the area.
This guide will help guide you on purchasing property in Spain based on our experience. There were definitely some things we wish we knew before buying in Spain that would have been helpful as we went through the process. Overall, the real estate transaction process is not much different from what you may be used to elsewhere. Here are the 10 basic steps you need to take buying a house or property in Spain.
10 Steps to Buying Property in Spain
1. Budget Planning For Buying In Spain
The costs of buying in Spain are typically paid by the buyer. Unlike in the United States, it is unlikely you will be able to roll these expenses into your mortgage, so plan for an additional 15-20% of your purchase price as a cost to consider upfront. This was a little surprising to us so we had to put down more than what we originally anticipated. Here are some estimates of what to expect in addition to your purchase price. We ended up paying about 13% of our total purchase price in fees.
- Existing Properties: Property Transfer Tax 6-10%
- New Properties: VAT or IVA at 10%
- Notary Costs, title deed tax and land registration fees 1-2.5%
- Legal fees 1-2% (including VAT)
2. Get Your NIE
To do any financial transaction in Spain you will need an NIE number. In most cases, you will need to contact the Spanish Administration or go through your local Spanish Consulate to get this number. It is also normally issued as part of your Visa Approval if you are pursuing one. If you are pursuing a mortgage, the bank you use may be able to facilitate this on your behalf. We used Abanca. I already had an account with them and so when we asked for a mortgage, they were easily able to request a NIE number for my husband and handle it for us.
3. Find A Realtor
While a buyer’s agent is not very common in Spain, you will find there are service providers that can serve as your representative to help you buy a property in Spain. These services in more common in expat heavy areas like Madrid, Barcelona, Valencia, and Sevilla. Below are some service providers I found through a simple google search:
4. Search For Properties In Spain
This was by far one of the most frustrating aspects of buying in Spain. There is no central MLS system in Spain, unlike in the United States. If you have a buyers agent, they will help locate properties for you based on your criteria but you may also want to look yourself. If you will be searching for properties yourself, you can use portals like Idealista.com and fotocasa.com. There are also several FB Groups that post listings. I followed every realtor with a Facebook page in the area we were buying and joined local buy/sell groups where some realtors post listings. This is ultimately how we found our home.
5. Submit An Offer On A Property In Spain
Once you have decided on the property or house you want to buy, you will want to submit a formal offer. This will require an earnest money deposit typically between 3,000 – 5,000 Euros. The agent(s) will then present the offer to the seller and they can accept or counter offer. Once you reach on an agreed upon price, you can proceed with securing your mortgage or move on to scheduling the closing if you are buying with cash.
6. Securing A Mortgage In Spain As An Expat
While a little more complicated, expats can secure a mortgage in Spain using income from another country. You may have to put more down as a deposit but it is possible. Most banks will offer residents a mortgage at 70 – 80% of home value. As an expat, you may be required to put down as much as 40%. You can use a mortgage broker to find you the best rates or go straight to the banks like we did.
7. Real Estate Closing When Buying In Spain
At the time of closing you will need to be present or have someone represent you. There are no virtual closings so you will not be able to do this electronically. If you will not be in Spain at time of closing, you will need to designate a representative for you and get a Power of Attorney completed. You can designate a local lawyer, a friend or a family member sign for you.
To get a Power of Attorney completed for your property purchase, I recommend you get it done while you are in Spain visiting or looking at listings. If you need to have a Power of Attorney drawn up while abroad, your local Spanish Consulate can do this for you. This is what we ended up doing. While the process took a little extra time, it was fairly easy.
8. Get Home Insurance
If you are pursuing a mortgage, it is likely that the bank will offer you home insurance as part of your mortgage process. If you purchase the policy through them, they typically adjust your mortgage rate some. They also incentivize you if you have a regular deposit to your account. Be advised that they may also require you purchase a life insurance policy as collateral on the mortgage.
If you want to get home insurance separately, you can reach out to any of the insurance brokers in Spain to get you a quote. Below are a few insurance companies that write policies in Spain.
If you prefer a company with English support, you can try one of the insurance providers dedicated to expats such as Caser Expat Insurance.
9. Setup Utilities And Other Services
Once you have purchased your house in Spain, you will need to go to the utility services to register for a new account. These include:
- trash collection
- water & sewer services
- Electricity
- Propane or Gas Delivery if applicable
- Phone and/or Internet Service
There are many providers and it will vary by region. We simply took the last bill provided by the seller and went down to each location to get the account switched into our name. If you will not be in Spain make sure you have this also written into your Power of Attorney document so your representative at closing can also handle these items for you.
10. Register as a Resident
Once you actually move to Spain, you will need to go to the town hall to register as a resident “empadronaderte”. This lets the town know you are now a resident in the area and allows you to get other things done as well such as:
- Securing work and residency permits
- Obtaining health insurance
- Getting or exchanging your driver’s license
- Register your children in school
- Access to social services
- Establish your permanent residency
- Establishes you as a tax resident in Spain
To register as a resident, you will need a rental agreement or property purchase agreement, original passport and copies for each family member, and complete a form that town hall will provide you.
Additional Tips For Buying In Spain:
- The best deals will not be listed on websites, Check local buy/sell groups and realtor FB pages for deals. If you know someone in the area you are planning to move to, have them ask around to see if any properties might be coming on the market that aren’t already published.
- Always check the qualifications of the attorneys or real estate agents engaged in the transaction. Choose a different attorney, than the one your realtor recommends.
- Check the land registry to make sure the property is legally registered correctly.
- We ran into this trying to buy a property early on.
- Have your lawyer check that there are no outstanding obligations on the property.
- Hire a surveyor or an architect to make sure the structure of the property is sound.
I hope this helps you in planning your move to Spain. Buying in Spain was definitely the right choice for us vs renting and I wish we had something to guide us through the process beforehand to prepare for it.
