Understanding the buying process: a step-by-step guide for UK residents purchasing property in Spain

Currencies Direct April 10th 2024 - 4 minute read

Purchasing property in Spain can be daunting, with many different factors to take into account. But it can help if you understand the process ahead of time.

That’s why we’ve put together this guide to help you navigate the property purchase. From the initial planning stage to completing the sale, here are the steps you need to take to make your dream of owning a property in Spain a reality.

1. Planning and preparation

The first part of the process is to start planning, and that begins with a budget. Figure out what you can afford, and remember to include things like travel costs, taxes, and legal fees.

Allow for anywhere between 10% and 15% of the purchase price to cover the costs of buying your new property in Spain . This will cover transfer tax as well as land registry, notary and legal fees.

At this point it’s also best to get your finances in order. Decide how you’re going to fund the purchase and, if you’re applying for a mortgage, get an offer in principle.

This is also the stage when you’ll do your preliminary research on where you want to buy in Spain. Perhaps you have a particular location in mind, such as Madrid or Marbella, but it’s still best to explore your options.

2. Choosing a location

With the preliminary planning done, it’s time to narrow down where you want to live. You’ll also need to consider the type of property you want, regional prices, and amenities. Do you want a modern coastal apartment with shops and attractions nearby or a rustic villa in the quiet countryside?

Where you choose to buy also depends on how you plan to use the property. You’ll need to research things like schools in the area, work opportunities, transport links, and any other factors that could impact you and your plans.

For instance, some areas have large expat communities, which may be perfect if you’re moving to Spain. Meanwhile, tourist hotspots can bring a tidy income, but may not be the best place for retirees.

Many Brits seeking a new life or a bolthole in Spain opt for property in Costa Blanca, the Costa del Sol or Almeria, where prices start from as low as €50,000 for a small townhouse.

Barcelona and Madrid are also popular, as are the Canary Islands, particularly Tenerife. Fuerteventura, Gran Canaria and Lanzarote, as well as the Balearic Islands, along with Marbella and Costa Brava are other popular choices for expats looking to make Spain their new home.

It’s worth visiting the areas that draw your attention – take a holiday, live life as a local for a few days. This can help you get a feeling for what life in your new property might be like.

3. Searching for a property

Once you’ve settled on a location and got your finances in place, it’s time to start your property search in earnest. There are two main options: you can search for properties online or contact Spanish estate agents and seek their help. Oftentimes, it’s best to do both.

You may even opt for a buyer’s agent or property finder. These may come with a fee, but their local expertise can be extremely useful.

During this stage, it’s good to visit the location where you’re buying as much as possible to get a feel for the locale and view any shortlisted properties in person. And it’s definitely preferable to arrange a viewing before you put in an offer.

If you can, you might want to visit a prospective location at different times of the day to check things like traffic and noise pollution.

4. Get professional guidance

At this point it’s a good idea to get guidance from professionals – most importantly, a lawyer. Your lawyer will help draw up the contract, carry out due diligence, and have your interests at heart, so it’s important you choose wisely.

Look for a legal professional with experience in Spanish property sales, preferably one that speaks English. The British Embassy has a service that can help you find English-speaking lawyers abroad.

While not essential, you may also want to hire a financial advisor, mortgage broker or independent translator. It’s also best to get in touch with your currency transfer provider, such as Currencies Direct, to talk about how and when you’ll need to send money to Spain .

5. Making an offer

Found your dream property? It’s time to make an offer. Spanish sellers are often willing to negotiate, as long as you’re being reasonable. If using your own agent, let them know your budget so they can help with negotiations.

Once your offer is accepted, a notary can put it in writing. You might also need to sign a reservation contract (contrato de reserva) or preliminary contract (contrato privado de compraventa) and make a small down payment.

This establishes the terms of the sale and secures the property and the price, protecting you and the seller. Make sure you get your lawyer to check over the contract before you sign.

The initial down payment is usually around 10% of the purchase price. Before you send any money, it’s crucial that you’re sure the seller is genuine.

6. Completing the purchase

With the reservation contract signed, your lawyer will then fully review all the property documentation, conduct any necessary surveys, and help draw up the sales contract.

You’ll sign and exchange private purchase contracts and then pay your full deposit, which can be anywhere from 10% to 50% depending on the type of property and how you’re financing it. Your earlier down payment to reserve the property is usually deducted from the deposit.

The last steps are to obtain a Foreigners’ Identification Number (NIE) from the Spanish Ministry of the Interior, raise a banker’s draft or use our Property Completion Solution , and then sign the contract of sale (escritura de compraventa). You’ll sign the deed in the notary’s office with your lawyer present and pay the remaining funds in full, and the seller will transfer the property into your name.

How we can help

As part of your property purchase, it’s likely you’ll need to exchange currencies. This could be spending money to cover everyday expenses, regular transfers for a Spanish mortgage or bills, or a large lump sum  to cover a deposit.

We could help you save time and money on your transfers to Spain, through our expertise and range of specialist services.

For instance, you can set up a forward contract with us. This allows you to lock in the current exchange rate for up to a year, protecting you from currency volatility and making it far easier to budget. You can also automate regular overseas payments, taking the hassle out of monthly expenses like bills or pension payments.

We also offer PropertyPay, a bespoke property completion solution which could help you avoid hefty bank fees and save time by streamlining the payment process.

If you want to find out more, get in touch with the team at customer.s@currenciesdirect.com or call +44 (0) 20 7847 9400. We also have many local branches throughout Spain, where you can pop in for a friendly chat.

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Currencies Direct

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