After the pandemic-induced slump, real estate prices in Spain are starting to rise once again, making this a more attractive destination for property investors.
Nowadays, homes in Spain are selling for 2.59% more than they were in 2020, as demand for property starts to tick upward slowly. This means those who want to buy a home in Spain should act as fast as possible if they want to get in while prices are still low.
There are three types of people who might consider buying a house in Spain, namely foreign investors, ex-pats, and locals. This is what to expect when you buy a house in Spain, depending on your circumstances.
A Foreigners’ Guide to Buying a House in Spain
If you’re an ex-pat or foreign investor looking at property for sale in Marbella, you may find the procedure a little different from the norm in your home country.
Before you start looking for homes in Spain, you should visit the Spanish embassy or consult to get a temporary NIE number, which identifies you as a foreigner. Those who intend to live in Spain need a resident NIE number.
Next, it’s important to open a Spanish bank account. This makes transactions much easier and quicker.
Once you’ve ticked these two boxes, you can engage with a real estate agent and begin your property search in earnest. It’s a good idea to start shopping around for a mortgage at this stage, too.
When you find a home you like, you must compare its price with other similar properties in the market. This enables you to negotiate better with the seller.
You should sign a reservation contract (contractor de reserve) and deposit agreement of around 10% (contractor de areas) as soon as you agree on a price. This effectively takes the house off the market and gets the sale process started.
It’s important to note that Spanish banks are relatively strict about awarding mortgages, after the severe real estate crisis of 2008. So, it’s important to hold off on paying a deposit until you’re assured of being able to finance the house.
The bank will request that a professional evaluate the home before they agree to your mortgage. You can assign a valuation specialist, or the bank can appoint one for you.
If you’re securing funds from your bank overseas or paying cash for the house, you can simply transfer the funds into your Spanish bank account and take it from there.
When you’ve achieved the mortgage you need, you’ll need to fill in and sign several documents, namely:
- A property report from the registry office (nota simple)
- The Inspección Técnica de Edificios or surveyors report
- The escritura pública or property deed
- Title deeds
A notary can advise you on the procedure involved in handling the title deeds and guide you through signing the sale deed. Finally, you need to register the property in the property registry.
Property Transfer Tax When You Buy a Home
You’ll need to pay a property transfer tax when you close on your newly purchased home in Spain. The amount varies according to the type of property you’re buying.
If you buy an existing home, the property tax is 10% of its value, you’ll pay 10% VAT, plus 1.5% for new registration. Buyers under the age of 32, only pay 5% VAT.
How Long Does it Take to Finalize a Home Sale in Spain?
Once again, the type of property you buy will affect the duration of the home sale. It only takes three to four weeks to complete the process if you’re buying a debt-free property with all the required paperwork.
It can take up to eight weeks if you must wait for mortgage approval or an architect’s certificate. If the home is part of an inheritance proceeding or registration dispute, it will take even longer than that.
Closing Costs in Spain
Over and above the property transfer taxes, you’ll also need to pay a few other fees before you can take ownership of your new home. These include:
- 2% to 15% of the sale price for estate agent’s fees
- 1% of the sale price for legal fees
- €500 for the property valuation
- Notary costs of 0.1% to 4.4%
- Up to 3% for Land Registry Inscription Fees
Finally, if you invest €500,000 in Spanish real estate, you can apply for a Golden visa. This entitles you to residency and visa-free access to the Schengen zone.
How Do Locals Buy a House in Spain?
Spanish people buy their homes much the same way buyers do in every other country of the world. They’ll usually engage with a real estate agent to help them navigate the purchase, and may also hire a lawyer to smooth the process.
Nationals who can make all the enquiries themselves don’t need a lawyer’s help.
Once they’ve found their dream home, the buyer should take care to work out all the costs involved in closing on the property as well as managing it, before applying for a mortgage.
Spanish homebuyers rarely enter into negotiations with the seller before securing a mortgage.
In some cases, the buyer insists that a surveyor inspect the property before they pay a deposit to secure the purchase.
Once the buyer is 100% confident that they’re happy with their decision, they pay a good faith deposit and the sale proceedings (as above) commence.
Are You Interested in Owning a Piece of Paradise?
Marbella is one of the best places to buy a house in Spain. It’s an excellent location for rental investment properties thanks to the high demand for holiday lets, and a wonderful place to spend time yourself.
We can help you take the first step toward owning a piece of this prime real estate, get in touch for expert assistance in finding your perfect luxury property in Spain.