The hidden fees when purchasing property in Spain – and how you can avoid them

While purchasing a home in Spain is an exciting venture, the additional fees can quickly add up. Many of the costs of buying Spanish property are well known, but others often catch buyers by surprise.

In this guide, we’ll uncover the lesser-known fees and charges associated with buying property in Spain – and show you how to avoid or minimise them to keep your budget on track.

Banker’s draft fees

A key cost that many would-be buyers are unaware of is the fee for raising a banker’s draft.

A banker’s draft is a form of secure payment whereby the bank ringfences the money for the property purchase, protecting both parties. However, most banks charge a fee of around 0.5% for raising a draft, which can come to thousands of euros.

Fortunately, this fee is entirely avoidable. Our Redpin payments service allows you to transfer money directly to the seller completely free of charge. It’s just as secure as raising a banker’s draft, but without the added cost or hassle.

Bank charges

Banks also tend to levy various fees and charges for handling international transfers. Banks in both the UK and Spain often charge for sending money abroad, while Spanish banks usually add on fees for handling large payments.

Using a currency broker can help you avoid these costs, particularly if they allow you to hold currency on account so that you don’t need to use a Spanish bank.

At Currencies Direct, we don’t charge transfer fees, and you can store your funds in a secure digital wallet. When paired with using Redpin, this means you can stay in control of your transactions and avoid opening a Spanish bank account, potentially saving you from hefty fees.

Additional notary fees

When buying property in Spain, it’s mandatory to have a notary present to formalise the property deeds. While many buyers anticipate this, what often goes unnoticed is the range of additional fees the notary may charge.

Notary fees are generally calculated based on the value of the property, and they can include costs for document preparation, copies of the deeds, and the registration process. The fees typically range between 0.1% and 0.5% of the property price, but extra charges for supplementary services like translations or handling complex legal issues can add to the final bill.

To mitigate these costs, ensure you ask for a full breakdown of the notary’s fees in advance. You may also want to see if you can find more affordable alternatives to supplementary services, such as hiring your own lawyer or translator.

Valuation fees

Before approving a mortgage, Spanish banks often require a valuation of the property. This involves an independent appraisal to assess the property’s market value, ensuring it matches the amount you’re borrowing. These valuation fees are usually borne by the buyer and can cost between €300 and €800, depending on the value and size of the property.

While you can’t entirely avoid valuation fees, you can shop around for better deals. Some banks might offer preferential rates on valuations if you’re using their mortgage services. Alternatively, if you’re paying in cash or using a non-bank financing option, you can avoid the requirement for a formal valuation altogether.

Exchange rates and currency fluctuations

Securing a favourable exchange rate is crucial when buying property in Spain. The currency market fluctuates constantly, and some providers may offer uncompetitive rates or add hidden fees after the initial quote.

To avoid costly surprises, explore your options carefully and request full, transparent quotes from any providers you contact. At Currencies Direct, we offer competitive exchange rates with no hidden costs, ensuring that you know exactly what you’ll get from your transfer.

We also specialise in timing transfers to help you make the most of your money. Even small changes in the exchange rate can significantly impact your budget. For example, if you were transferring £500,000 from GBP to EUR and the exchange rate dropped by just two cents, you could lose out on €10,000.

With Currencies Direct, you can lock in a rate in advance of your transfer, set a target rate higher than the current one, or receive regular market insights from our analysts – helping you maximise your budget and minimise risk.

Hidden costs are just one of the stumbling blocks you could come across when buying Spanish property. Check out our article on the pitfalls of buying property in Spain for tips and tactics to overcome common challenges.

Avoid hidden fees and costs with Currencies Direct

Purchasing property in Spain doesn’t have to come with unexpected fees and unfavourable exchange rates. By understanding these hidden costs and taking proactive steps – such as using services like Redpin and timing your transfer – you can save thousands and stay in control of your finances.

At Currencies Direct, we’re here to make the process seamless and cost-effective. Whether you’re ready to make a transfer or just exploring your options, we can guide you through every step with personalised guidance and expert support.

Ready to avoid unnecessary fees and get the best deal on your currency transfers? Open a free account today or get in touch with the team.