GUIDE TO BUYING PROPERTY IN

S P A I N

NOW UPDATED FOR BREXIT

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A word from our sponsors...Buying a property overseas can add significantly to your quality

of life and give you, your family and friends many happy times for years to come.

It is however a big step and something you should not undertake

lightly. Within our guide, you’ll find all the information you need to help you with your purchase

Our sponsor, HomeEspaña, has been selling property across the Costa Blanca and Murcia for more than 10 years, helping thousands of happy clients purchase their dream home in the sun. Visit their website at www.homeespana.co.uk for more information and to

search hundreds of fantastic properties for sale.

We hope our buying guide to Spain will inform, enlighten and set you on your way.

sponsored by HomeEspaña

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2 A word from our sponsors3 The Country

4 STEP ONE: RESEARCH - FIRST STEP TO FINDING A PROPERTY IN SPAIN4 Popular regions of Spain6 The Spanish property market7 To buy old or new?

9 STEP TWO: STARTING YOUR SEARCH 9 Finding property in Spain

11 STEP THREE: THE BUYING PROCESS 11 Residency, tax, wills and Brexit12 Further useful information

Contents... The Country

It’s not hard to see why Spain is so popular for both holiday makers and property buyers. It receives over 60 million international tourists a year which is more than the whole population of Spain, around 47 million.

Why? Its various international airports are easy to get to from the UK, served by plenty of low cost airlines, it’s got a great climate, that much loved Mediterranean lifestyle and the superb infrastructure.

Spain has of course had its own share of problems in the last few years, but it still offers good value for money when buying property and there’s plenty of choice for all those British buyers with a freed-up pension pot of £60k or £70k.

What’s more, many people still want to live there full-time - some 800,000 Britons live in Spain, making it one of the most important host countries for UK expatriates abroad. Healthcare and education costs can be competitive and there is also a healthy appetite for running small businesses in the tourism sector.

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of course, the outdoor lifestyle that goes with it. It’s the only resort city on the Mediterranean with a true 12-month season and offers one of Spain’s largest shopping centres, 15 golf courses, four marinas, over 600 restaurants, numerous clinics and hospitals, 10 international schools, 16 miles of beaches…

You can get a resale apartment on a complex for €125,000, or a new one for €180,000 but a spacious apartment in a good gated community in a sought-after location typically tends to be nearer €300,000. Popular areas include Estepona, San Pedro (where our own presenter Laura Hamilton bought in 2012), Nueva Andalusia, Mijas Costa and Benahavis. The Anglo-friendly resort of Benalmadena is popular with tourists and expats and you can get a two-bed apartment there for €100,000, or a three-bed villa from around €400,000. Your money can also go further in the marina resort of La Duquesa, with homes from around €120,000.

There’s a reasonable choice of apartments in the €180k-250k bracket and in good locations such as Nueva Andalucía with its proximity to Puerto Banús.  Pricier locations include La Zagaleta and Sierra Blanca.

The upmarket residential enclave of Sotogrande towards Gibraltar offers golf courses and a marina and attracts both holiday homeowners and full-time residents. Apartments start at around €250,000, new-build four-bed villas weigh in at around €700,000.

Costa BlancaThe Costa Blanca extends from roughly the middle of Spain’s eastern coastline close to the wonderful city of Valencia to south of Alicante.  This is a varied coastline of sandy beaches and rugged coves, which has a temperate climate with warm winters and not too hot summers. 

It tends to be a Costa of two halves, with the northern sector a little less developed and more expensive – as a general rule. Over the years, well known towns such as Moraira, Denia, Calpe,

STEP ONE: RESEARCH - FIRST STEP TO FINDING A PROPERTY IN SPAIN

Javea and Benidorm have attracted many British property buyers for both holiday and permanent homes.

In the north, the buzzy little beach town of Denia has been riding a wave of popularity in 2015 but upmarket Moraira is a perennially popular spot. Tagged by some the “St Tropez of Spain” it’s a small coastal town backed by mountains and vineyards, and now has plenty of good-quality restaurants around its quaint cobbled alleyways and palm fringed avenues. Its most desirable areas to live are El Portet, Pla del Mar, Pinar de L’Avocat and La Cometa. A three-bed villa with a pool will cost €400,000-600,000 in the prime parts.

Alternatively in nearby Benitachell you might get a four or five bedroom villa for €250,000. Benissa Costa is another popular areas – there you might pick up a small detached villa with a pool for €295,000.

Javea is a classy, low-rise town that has been likened to a Spanish version of Dartmouth in Devon, and it’s got a marina, stunning Arenal beach, golf and also a lovely hinterland, the Jalon and Orba valleys.  A three-bed villa with a pool might cost €350,000-400,000 in Javea, whilst a three-bed villa with a pool might cost €160,000-200,000 in Jalon/Orba, a townhouse €140,000. These valleys are increasing in popularity for buyers seeking a more tranquil location than the coastal resorts; not just because you get more bang for their buck.

Heading south of Alicante, the lively resort of Torrevieja reportedly boasts the highest proportion of British expats in Spain, and it is highly popular for rentals, according to HomeAway.co.uk. That’s because it’s got a lot to offer: two salt-water lagoons, five golf courses nearby, Blue Flag beaches, a thriving market, family friendly facilities and plenty of nightlife. What’s more you can get a two-bed bungalow for around €60,000. Around Torrevieja the locations of Benijofar, Los Montesinos, Cuidad Quesada, Los Altos and Guardamar del Segura

WHERE TO BUY?

Popular regionsMost people seeking to buy property in Spain naturally head for the Mediterranean coastline.  However, the Balearic Islands are also very popular, together with the lovely sub-tropical climate provided by the Canary Islands.  Far fewer people tend to buy property in the interior of Spain or the big inland cities such as Madrid, Zaragoza, Seville or Granada.

Spain is a vast country that is blessed with variety both geographically and culturally. One way or another, Spain has everything you could wish for including stunning medieval cities, a great restaurant scene, great golf courses, sophisticated shopping, tremendous beaches and large areas of completely unspoilt countryside. 

For the active, it is a terrific country for sightseeing, walking, cycling and riding but in truth, for most people, Spain is all about sun and sea.  So where are the hot spots? We start with the most popular ones….

Costa del SolThe best-known of all the Costas in Spain with towns such as Marbella, Torremolinos, Benalmádena, Fuengirola, Mijas, Marbella, San Pedro de Alcántara and Estepona that are virtually household names in the UK.  Malaga is the main city and has an international airport that services the coastline, which has seen massive development over the past twenty years.

Glitzy Marbella might said to be well and truly booming, with new developments back in vogue and great demand for holiday rentals. It’s also a great cultural melting pot, with nearly 40,000 of the 142,000 inhabitants  foreigners (from 137 different nationalities with a British majority) and this number gets bigger every year. So why are we so fond of “Marbs”? Top of everyone’s list has to be the weather – 320 plus days of sunshine a year appeal to anyone – and

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attract interest and offer some affordable yet cutting-edge new-build properties.

Another area currently very popular is that of Orihuela Costa - south of Torrevieja, down to around Campoamor – for offering a large selection of affordable property, new and old. Whilst the Orihuela Costa Resort Complex offers top sporting facilities) La Zenia Boulevard is a massive shopping mall.

Inland, Villamartin is very popular with its prestigious Club de Golf Villamartin and quality restaurants offered at Villamartin Plaza. Not surprisingly there’s a vibrant international community of owners and expats and demand for property remains strong.  Two-bed townhouses cost from around €80,000 whilst three-bed villas start at around €150k. At the nearby gated residential community of Los Dolses, prices are a little higher.

The three coastal hotspots of Playa Flamenca, La Zenia and Cabo Roig are all handy for both Murcia and Alicante airports (less than 45 minutes and offer many two- and even three-bed apartments around the €90-100k mark. Inland a little, in the village of Algorfa popular with expats, comparable properties might be €75-85,000.

Murcia/Costa CalidaSituated in the hottest and driest corner of Spain, Murcia is a region that is more affordable and less developed than the Costa del Sol. Sandwiched between the southern Costa Blanca to the north, and Andalusia to the south, it includes the Costa Calida and the Mar Menor, a salt-water lagoon bordered by a 22km sandbar, La Manga.

Close by is the region’s best-known resort is the La Manga Club, a well-established and prestigious sporting destination where one can buy a new two-bed apartment for €225k or a new detached four-bed villa for €550k plus. But Polaris World is another big name in Murcia, with several golf resorts offering homes at prices drastically reduced from their 2007 peak. At the largest of them, La Torre, you can get one-bed

part lively beach (Playa) resort gives overseas property buyers the ‘best of both worlds’. 

Mojácar Pueblo is a picture book village of little whitewashed houses and Moorish-style “cortijo” farmhouses flanking narrow winding streets, nestled in the olive and almond grove dotted foothills of the Sierra Cabrera mountain range. Meanwhile Mojácar Playa offers 17 km of uncrowded shoreline.

You have plenty of choice of one or two-bed apartments with a budget of €100,000; villas range from €200k. 

Vera is another hotspot – also divided Pueblo and Playa areas.  Here there is a larger number of new developments, as well as distressed properties on the market and it’s cheaper than Mojacar:  two-bed apartments cost from €60k. Properties rent well to the Spanish.

Other nearby towns are Garrucha – a working port with a new harbour that is not quite as popular with British buyers; and the scuba-diving centre of Villaricos where there are some good developments but low supply so prices are a little higher: €75k-80k for an apartment. Golfers may head to the well-known resort of Desert Springs where Ian Botham and many other British people own quality properties or the lively resort of Roquetas de Mar.

Inland of Mojacar, the village of Los Gallardos is also popular: you get more space and property for your money in from the coast.  A few years ago, Arboleas and Albox in the Almanzora valley were popular with British buyers but there have been widespread issues of properties having been built illegally on agricultural land so be careful. Prices are low there as a result don’t forget your due diligence.

Costa de la LuzCádiz and its neighbouring province of Huelva are often referred to as the Costa de la Luz – “Coast of Light” because of the crystal clarity of the blue skies in the region. Famed for white sandy beaches along a relatively unspoilt Atlantic-facing coastline, the Costa is a popular

apartments for €70,000 but repossessions have now mostly dried up.

Alternatively, the small inland village of Sucina that has become popular with the British market, partly because it also close to another golf course resort, La Peraleja. A small resale three-bed villa in Sucina centre can be bought for €100k.

Other hotspots around the Mar Menor include the lively tourist centre of San Pedro del Pinatar where two-bed apartments cost around €90,000; the popular sailing resort of Santiago de la Ribera; the watersports centre of Los Alcazares or the “old world” little town of Los Urrutias with its famous weekly market. Also worth a mention is the village of Mar de Cristal with its little marina, good sandy beach backed by an attractive promenade.

South of the Mar Menor, there’s the Gulf of Mazarron, with 35km of beaches backed by the foothills of the Sierra de la Almenara, with the port, or Puerto de Mazarron its sea-faring hub. Heavily discounted property options include the Mazarron Country Club (villas from around €100k mark), and also Camposol golf resort where you can get a two-bed terraced home from around €45,000.

Much less inventory is on the market in the attractive Roman port city of Aguilas, a popular resort area with great scuba-diving where a four-bed townhouse in the centre might cost €180k. 

AlmeriaThe nearby Costa Almeria, a stretch of unspoilt coastline between Murcia and Granada, is not as developed as the Costa del Sol, perhaps not as well-known by the British, yet its fans like the fact its villages retain much of their Spanish identity – it’s the “real Spain” still.  Its hot and dry climate suits some more than others.

Mojacar remains a popular spot, less than one hour’s drive from the airport, and a central location for getting around Almeria as well as a traditional holiday destination - ideal for families and couples in its own right. The town’s dual identity: part quiet hillside village (Pueblo) and

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destination for tourists - still, it has managed to avoid the built-up resort infrastructure and busy excesses of some of Spain’s other Costas. That said, it still remains off the radar for many British buyers and does seem to be heavily marketed outside Spain.

The countryside around the town of Jerez de la Frontera is beautiful, with typically Andalucían white villages scattered among its palm tree-lined horizon – there frontier towns including Chiclana de la Frontera, Palos de la Frontera (renowned departure site for Christopher Columbus’ journey to America) and Arcos de la Frontera have proved popular with a niche of British buyers opening boutique hotels in the lovely Moorish townhouses.

In the latter you can find a studio apartment for around €50,000, a three-bed townhouse with change from €150,000 or a rural finca property for around €500,000, although there a few around for much less.

The coastline between Tarifa and Sanlucár de Barrameda is particularly breathtaking, and the kite-surfing mecca of Tarifa is fashionable with weekenders. You can buy an apartment in the old town for less than €100,000 or luxury villas or fincas for around €1 million.

Costa BravaThe Costa Brava is situated to the north of Spain’s second largest city, Barcelona, and is notable for its rugged and pretty coastline.  Its proximity to France has meant that it has been an easy place to drive to from the UK; however although the summers are truly Mediterranean, the winters can be hard and it’s comparatively expensive for property.

With buzzy Barcelona down the road — now reached by a fast train link from Girona that takes 36 minutes — and a landscape of pine forests leading to quiet coves and unspoilt fishing villages, it’s idyllic, upmarket Spain that appeals to lovers of Mallorca or France’s Languedoc region. Near Girona, the PGA Catalunya Resort combines a solid-gold name in golf (the course

€275,000.Ibiza gets every more trendy and property

prices reflect this as the island has evolved a minimalist, contemporary style of luxury villa all its own. Expect to pay €1.5m for a new high-spec villa around Ibiza Town in the south-west, but you can buy new apartments in the centre from around €275,000. Hotspots outside the main hub of Ibiza Town include Cala Tarida and Playa d’en Bossa whilst full-time relocators favour Santa Eulalia or Santa Gertrudis.

Menorca is the most family-friendly and laid-back island, and with the property market remaining sluggish there, there’s a lot of stock at reduced prices. Decent apartments kick off around €60,000 whilst those around the island’s main hotspot of Mahon will typically be nearer €100,000.

The Canary IslandsEver popular, are the Canary Islands, of which there are thirteen, including Tenerife, Fuerteventura, Gran Canaria and Lanzarote.  Amazingly, these islands attract some 13 million tourists a year - many drawn to the islands as much for their winter sun and warm temperatures as for the spectacular scenery.

The hotspots of Tenerife include the resort areas around Playa de las Americas and Los Cristianos but also Adeje and north a little to Los Gigantes. Prices have been hit hard by the downturn and you can get apartments from around €60,000. Just be careful about letting out your property for holiday rentals – the authorities have been clamping down on this so check licences before you buy.  

Meanwhile, in Lanzarote, a two-bed apartment starts at €90,000 and a three bed villa at  €200,000 and the hot spots are Puerto del Carmen, Playa Blanca and the Costa Teguise.  Building has always been more strictly controlled than in Tenerife so prices tend to be a little higher in areas where demand is high.

is voted the best in Spain) with a property developer with a stellar history — Denis O’Brien, who owns the Algarve’s Quinta do Lago resort.

Among the coast’s most popular locations with foreign buyers — for obvious reasons, given its charming old town and beautiful beaches within walking distance — is Begur. Another of the coast’s upmarket seaside villages is Llafranc, loved by Dali and Hemingway. Few properties come on the market here, and even small seafront houses can cost millions, but expect to pay €600,000 plus for a well-located villa, and similar prices for popular Tamariu and Palafrugell.

The Barcelona market has been picking up fast (entry level resale apartments are €100k but nearer €200k in good, central districts); and the surrounding area remains popular too. A three-bed villa in the fashionable resort of Sitges kicks off at €700,000, quality apartments north of €300,000.

The Balearics  The Balearic Islands of Majorca, Minorca, Ibiza and Formentera have long been known as fine places to holiday for the mainland Spanish – especially from Barcelona - and have had a long history of Britons living there.  They are however very different propositions for property hunters, with Mallorca by far the big favourite. Prices have risen by 10-15 per cent at the high end during 2015 in both Ibiza and Majorca – in Menorca prices are static.

Mallorca actually offers something to suit all budgets, from a new-build apartment from €200,000 to multi-million euro villas in the fashionable hub of the south-west – around Puerto Andratx and Palma. A nice two-bed renovation apartment in the increasingly fashionable Palma Old Town kicks off at €275,000 whilst you can get a two-bed apartment in popular Santa Ponsa for around €220,000. Over in the east in the fashionable little enclave of Pollensa (home to Bradley Wiggins amongst others), a three-bed apartment costs around

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WHAT DO YOU WANT TO BUY?The Spanish property marketSpanish property prices rose to absurd levels during the Spanish property boom, which came to a dramatic halt in 2008.  Since then Spain has suffered a severe economic crisis, which has further damaged property values, with the result that property prices in many areas are still similar to those existing in 2004.  Indeed, house prices have dropped by as much as 35%-50% since the boom and now offer exceptional value for money.

But prices vary wildly between different areas of Spain and the market recovery that began in 2012/13 is certainly not across the board. Over-supply issues were never such a big issue in Mallorca and Ibiza so prices have begun to rise again already. Tinsa, the Spanish Property Index, reported the first nationwide property rise [since the downturn] of 0.8 per cent at the end of 2015.

The enduringly popular Marbella arguably led the recovery on the Costas, whilst in 2014 the Costa Blanca market – especially the new-build sector – sprung back into action. The National Statistics Institute revealed that 40 per cent of foreign buyers in Spain were in the Alicante region (including the Costa Blanca). British buyers still lead the way, but are followed by a much more diverse spread of nationalities that include non-EU investors seeking “golden visas” as well as a good range of northern Europeans seeking to escape freezing winters.

Many of the distress sales we heard so much about have now been hoovered up so whilst buyers may still find some great deals amongst resale properties with vendors anxious to sell quickly, the scope for negotiation is narrowing in the hot spots of the Costa del Sol and Costa Blanca.

That’s not to say the market is completely rosy – far from it –properties in less popular or marginal locations are still struggling to sell – along with desirable properties in areas such as Menorca where supply outweighs demand.

The real market recovery won’t gather momentum until the domestic sector bounces

back, and there are now reports of Spanish retirees joining the overseas bargain hunters on the Costas, so these are positive signs. Mortgage options have increased during 2015 but cash is still king amongst the lower price bands.

Confidence in the off-plan sector is another, and high-end schemes in Marbella are selling quickly, whilst those in the €80,000 to €120,000 price band are moving faster around Alicante, according to reports.  Whether you are seeking something new or old, it’s clearly a great time to buy in Spain – before those price rises really gather momentum.

What CAN you buy?EU nationals can buy freely in Spain.

Identify WHAT you want…For many of the recent buyers we feature on this website or in the magazine the search for a property began a good couple of years ago. Rarely these days is it a spontaneous decision, rather the result of several months of careful research and watching the market.

Such research may have included visiting a property show or two to pick up advice and ideas, as well as trawling the internet or property publications. Internet sites provide pointers but rarely portray the reality of an area - both in and out of season – so fact-finding trips are vital. It’s amazing how many people state that they “thought” they wanted to be in once place, yet they ended up changing their mind halfway through their search process.

After all, not only do you need to hone down the region – how relevant is climate? – but then the area, and maybe a shortlist of villages or resorts, down to the right part of a town for you.

Equally you really need to see any property you are buying to view both the quality and the location. Certainly, there is no shortcut to buying property in Spain and an essential part of your research should always involve staying where you think you wish to buy. Many developments offer this possibility.

And WHY you are buying?As with buying anywhere abroad, you must ask yourself WHY you are buying and from this lots of other questions will follow. Do you want somewhere for regular holidays or do you want somewhere as an investment to pass on to the kids or do you seek a genuine second or semi-permanent home? Maybe you will need to cover your costs by renting it out too?

Consider the practicalities of owning a home abroad and how much time and money you are prepared to spend on your property. Rural or urban? New or old? Stand alone home in tranquil privacy or on an urbanization? Amongst expats or locals?

Other key considerations include how far you want to be from an airport, beaches and key amenities such as supermarkets and a local restaurant. At least half of buyers we interview want to be within walking distance of cafes and restaurants because many people don’t want to be reliant on a car abroad.

If you are relocating full-time with a family then schooling options will need to be investigated early on (and places applied for months in advance), whilst retirees will need to check on medical facilities and pharmacies.

On the other hand if you are banking on renting out your property you will need to consider the ideal size and type of property, the sort of features that rentals might expect (outside space? Use of a pool?) as well as popular locations.

You should create a brief that sets out your list of requirements, from number of bedrooms, type of property to the features you wish to have. Here are some key areas to consider:

 

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important that you attend these meetings if you want to have any say in how the community is to be run.

Management and upkeep costs needs to be covered by all of the owners in the development.  If a high proportion of the owners are not making payment of their service charge, then those funds will need to be raised from the others.  The problem of unpaid fees can be witnessed in developments across Spain since the global downturn – as it can be on condo developments in the USA.

So when considering buying on urbanization, you or your lawyer should contact the community to determine the level of service charge over the past three years. Are there any projects being contemplated by the community that are likely to incur a high cost, such as replacing the swimming pool or repairing balconies throughout the development?

Also, do the vendors of your property owe any service charges? If they do, ensure that any outstanding service charge will be paid upon completion (either by the sellers paying that amount to the community or by you retaining an equal amount from the purchase monies).

TO BUY OLD OR NEW?You probably have a pretty good idea whether you seek a charming old property or a brand-new one, but whether you buy one that is ten years old rather than straight from the builder raises a few interesting issues.

Whilst buying a “tried and tested” resale property you can see how the property works from a layout and position of the sun point of view. You might well get something that has been built in a great position that would not be available now. Equally, if a vendor is desperate to sell their home, you might get one at a great price compared to a new property of the same spec.

But all said, there are several definite advantages of buying new if you can afford it:

 • You can choose your fittings from a selection of options to make your holiday home bespoke. Sometimes you can tweak the layout too, not just tiles and fixtures.• Better build quality. Improved building controls mean that new homes need to meet certain standards. They have to be well insulated, for sound as well as heating, more eco-friendly and comply with regulations for earthquake resistance.• Modern layouts. The style will be contemporary with spacious living areas and outdoor terraces. On the minus side, the pay off for larger living areas does mean slightly smaller bedrooms.• Cherry-pick the best location. If you’re hoping to make a return on your investment, choosing the best plot, with the best view, is always going to appeal to renters and also buyers when you want to resell.• Less upkeep hassle and costs. Everything is new, you won’t need to budget for repairs – yet!• Aftersales care. Buying when building work is ongoing means you’ll have the developers team will still be onsite. Any niggles or flaws in the property will be fixed easily.

• Ten-year warranty. New-builds come with certain guarantees so problems can be quickly solved.

On an urbanization – or not?Buying on an urbanization in Spain (also referred to as community or residential development), like anything, brings both advantages and disadvantages.

Whilst community life can provide security, a sense of community, shared amenities and lack of upkeep hassles – at financial cost, of course; conversely, if managed badly, it can bring greater financial headaches, stress and neighbourly tensions.

Whilst properties on urbanisations can appeal to holiday rentals for their facilities such as communal pools you need to determine whether a community permits short-term rentals (or those less than three months long, for example) and what the affect will be on the ambience of the development. Will a daily turnover of residents be noisy and disruptive?

 Apart from bigger issues such as ascertaining whether a motorway is being built close to the development, how well-located it is for those prospective rentals (is it in the middle of nowhere? On a bus route?) you need to determine what service charges you will be liable for every month or year. What is included in this – home insurance or just communal areas cover?

You need also need to consider the other issues that might cost you money, due to either a possible reduction in the value of your property, or an increase in those service charges that you have budgeted for.

The relationships between the current property owners are fundamental, as are the dynamics between the property owners and the people who are responsible for running the development. Owners on a development are subject to a regular service charge, managed by a community of property owners, the executive committee who will have annual meetings to discuss budgets and community rules. It is very

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Finding property in SpainThe key to finding the right property in Spain is to recognise that the property market and land law are markedly different from the UK. 

Indeed, whilst the vast majority of properties in Spain are safe buys we all know there have been a fair few that been liabilities. 

So, to buy safely in Spain, far more research is needed than in Britain.  Equally, you should always use a good, independent lawyer and specialist (English speaking), building surveyor to investigate every aspect of your proposed new home, before paying anything for it.

FinanceWork out your funds before you even start your search. You need to know exactly how much you can afford to spend and how you will finance your property. Will you re-mortgage your UK home to release equity, use savings and/or pension funds, or try to get a mortgage (see Mortgages below). You must also factor in buying costs – quite high in Spain - and running costs.

Currency exchangeAre you aware of the best way to transfer money to Spain? One of the biggest mistakes you can make is failing to appreciate the impact of exchange rates on your property purchase. Don’t expose yourself to currency movements.

Buying and owning a property in Spain means you’ll need a certain amount of euros available in a Spanish bank account, to pay for your property and to cover ongoing costs, including mortgage payments, and bills. When you begin your property hunt, all your funds are likely to be in pounds, so at some point you will need

to exchange them into euros and have them transferred to an account in Spain.

So why are currency firms better at doing this? For starters, they consistently offer £/€ exchange rates that are 3-4 per cent better than a bank, and charge no – or minimal – transfer fees. This means if you asked a currency firm to transfer

£100,000 into your Spanish bank account, you’d receive €3,000-€4,000 more than if you asked your bank to make the same transfer. A ‘forward contract’ is another useful tool to help you budget, allowing you to secure an exchange rate applicable to an agreed amount of pounds (or euros), which you typically have access to for a year - so the cost in pounds of your property won’t change with the exchange rate fluctuation.

Using a regulated currency firm is as safe as using your bank to send money to Spain. Currency firms are classed as Payment Institutions and must be either registered or authorised by the Financial Conduct Authority (FCA). They must adhere to FCA regulations, including holding clients’ funds in a segregated account at all times, so you know your money is safe.

Buying costsAllow for between 10 and 14 per cent of the purchase price to cover the costs of buying your property in Spain but this figure varies, according to the region. If you have a Spanish mortgage you need to add an additional cost of 2 to 4 per cent. There will also be costs for obtaining an NIE number and connecting utilities.

But the ballpark above includes Transfer tax (ITP), equivalent to stamp duty, calculated on the property purchase price and between 6.5 and 10 per cent, depending on the region.

It also includes the Notario’s fee of around 0.5 per cent of the purchase price, and tends to range from €300 and €1200. Land Registry fees in Spain tend to be between €400 and €600 – or 0.4 per cent of the purchase price.

Legal fees are usually a percentage of the purchase price – generally 1 per cent plus VAT– but with a minimum fee. Typically this might be €1,000 to€2,000.

VAT on new-build properties in Spain is 10 per cent and stamp duty on new-build is 1.5 per cent of the purchase price.

Running costsThe running costs of your Spanish property will depend upon the type of property that you buy and whether or not you become a fiscal resident of Spain.  However, all properties are liable to council tax, which is known as IBI (Impuestos de Bienes Inmuebles).  IBI is normally considerably cheaper in Spain than it is in the UK for a comparable property.

If you buy on some estates or urbanisations you will be liable for Community Charges (Cuota Comunidad de Propietarios), which are for the maintenance of the estate or the care and maintenance of the common parts of a block of flats.

 If you are non-tax resident in Spain then you will have to pay an annual tax (Renta) on your property, as if you had made a profit from renting it out (even if you have not).  This is a nominal tax but must be paid annually.

Of course, you will also have all the normal running costs associated with any property, such as: water and electricity, building and contents insurance and general maintenance. Don’t forget TV/cable/satellite costs, broadband, medical fees and transport costs.

Estate agentsNeedless to say there are many estate agents operating in Spain, of all nationalities, with British agents or agents with English language ability common in most coastal areas.  So, finding an agent with whom you can communicate is rarely a problem. But finding a good one is key to your success.

Throughout many areas of Spain registration of an agent is not compulsory and, even in the areas in which it is obligatory, the industry is considered unreliable. Does the agent belong to a professional association such as the AIPP (aipp.org)? Don’t take anything that agents tell you at face value. Equally, under no circumstances should you ever sign any document from an agent without your lawyer present.

So what should you expect of your agent?

STEP TWO: STARTING YOUR SEARCH

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They should be proactive, know the local market thoroughly and be prepared to spend extra time with you offering all sorts of general advice and assistance. Anyone who takes ages to get back to you on your first inquiry does not bode well for the search ahead.

Estate agency commissions vary widely across Spain but tend to be high as the agent does do a lot more for the overseas buyer than a typical UK agent.  In some areas it is common for sellers to pay an agent 3% commission, whilst in others the sales commission can be as high as 7% or even 10%.  Sometimes (normally on new-build developments) agents may earn as much as 18% on a sale. 

Occasionally, you, as the buyer, may be asked to pay a fee to the agent who shows you a property and this is normally a percentage of the sale price (for example 3%) and is sometimes called a ‘buyer’s premium’.  As such ‘premiums’ can be a lot of money, you should always carefully look at any contract between yourself and an estate agent (and get it specifically approved by your lawyer before signing it).

Viewing trips – worth a go?Consider going on a viewing trip but make sure you know what to expect and that you go on your own terms. Whilst a lot of properties in an area can be fitted into a day or two, you will probably need to make initial exploratory trips in your time so you can properly explore, and such trips might be better suited to the stage when you have honed down your search to a few key developments or areas.

Don’t feel pressurized into buying anything there and then – you need time to reflect away from the sun and sangria!

Creating checklists and keeping recordsOn any type of viewing trip it is handy to take records of each property so you can look back and compare with all the information (and pictures) you need. It can be useful to use a wishlist of tick boxes, to rate properties 1-10, or list their pros and cons, after seeing each one, so you don’t confuse them. Make a note of things you want to follow-up with the agent on each.

LawyersOnce you have narrowed down the area within which you want to buy, you should find a lawyer who can act for you.  This is a vitally important move, with the services of an excellent lawyer critical to the success of any purchase of a fully legal, sound, Spanish property, devoid of any potential liabilities.

 When looking for a lawyer, make sure that you find one who is: fluent in English; a specialist in conveyancing; completely independent of the seller/developer and your estate agent; and fully insured to a public liability premium well above the value of your purchase (and always ask to see the policy).

Furthermore, always insist that all advice from your lawyer is put in writing, something that many Spanish lawyers are reluctant to do.  This concentrates the mind of any lawyer and helps to ensure a higher standard of professionalism.

Finally, always get your lawyer to inspect any paperwork or contract before you sign it, whether it relates to a property or other services (i.e. banking, estate agent, building works etc.).

Power of AttorneyJust as in the UK, you can authorise someone (normally your lawyer) to act on your behalf with regard to your legal matters in Spain.  This is often wise, as travelling to Spain to sign documents can become inconvenient or mean that you miss an essential signing date through ill-health or travel disruption. 

A Power of Attorney can be either general or limited to a specific function (for example, the signing on your behalf of the escritura (Deeds) to your intended property. 

Building surveys in SpainOddly enough, there is no specific profession in Spain to compare with that of building surveyors in the UK, who specialise in analysing the state of existing buildings.  As a consequence, many agents in Spain advise clients that surveys are ‘not done’ in Spain, despite them being critically important.  In reality, there are British trained building surveyors in Spain, who can undertake a proper survey and you should always use one. 

However, make sure your surveyor is properly qualified as a building surveyor (as opposed to an architect or quantity surveyor etc.); fully insured to undertake building surveying in Spain; and able to provide a report in writing.

NIEYou cannot buy a property in Spain without a NIE number (Numero de Identificación de Extranjero), which is an identity/fiscal number for non-Spaniards.  So, apply for this as soon as you start looking for a property.

Currently, you must apply for your NIE number in person (although the rules on this tend to change from time to time; your estate agent or lawyer, who should help you).  A NIE number is obtained from the Policia Nacional, who have offices in all major towns and cities throughout Spain.

MortgagesMortgages are available for the purchase of properties in Spain but the variety and type of mortgages on offer have decreased markedly over the past few years – but is now rising again. Currently, Spanish non-tax residents are being lent a maximum of 70% or purchase price. However, to achieve the maximum percentage you have to be an A1 client with ‘spotless’ documentation and a low debt/income ratio, so it is wise to expect a lower offer.  

100% mortgages are available but these are exclusively offered by the banks on their own (normally repossessed) properties. 

Because of the complexity of the mortgage market, it is wise to go to a professional mortgage broker and certainly you should try at least two banks before settling on a particular mortgage. See aplaceinthesun.com for recent articles on mortgages – there are likely to be changes in 2016.

You can purchase Spanish property very quickly, if you are a cash buyer and you have an NIE number.  Certainly, it is not unknown for the Spanish (in particular) to see a property and be the owner (with full access) later on the following day.

However, this is not the way to proceed for

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STEP 3: THE BUYING PROCESS

any foreign buyer and you should never rush to buy – or be rushed.  Rather, you must always allow your lawyer and building surveyor ample time to do their proper investigations. 

Indeed, never lose sight of the fact that it is far better to miss out on an amazing bargain than buy a defective property you’ll always live to regret.

Legal processOnce you have found your property, the purchase process begins with a reservation agreement. This is a contract that freezes the purchase price and takes property off the market for, usually, 30 days on payment of a fee between €3,000 and €12,000. The deposit is usually held by your lawyer or your agent in a client or escrow account.

Within 10 days of signing the reservation agreement, the full private purchase contract (contrato de arras) is signed between the buyer and the seller. This is similar to exchanging contracts in the UK buying process. Within this time your lawyer should complete all the searches on the property - confirming that the seller own the property being sold, there are no mortgages or charges and that planning consents are in order.

Once both parties sign the main contract, it is binding. The arras contract or full private contract will usually require a 10 to 20 per cent deposit to be paid. The buyer is then committed to pay the balance of the price, and the seller (once the money has been paid) must transfer ownership to the buyer.  If the seller pulls out of the transaction he must return double the amount of the deposit received by way of compensation. If the buyer pulls out he will lose the deposit paid.    The property sale is formally completed when the title deed (“Escritura de Compraventa”) is signed before a public official called a Public Notary, or Notario. This will happen at their office and be accompanied by the agreed final payment and all the relevant purchase taxes. The Escritura is then presented by the Notary to the Land Registry for registration and the property is passed to the new owner. Final registation of the title deed can

take several months.With a new-build property, obviously

completion can take a lot longer, and the payments are split over stages of the build process, and the developer should provide bank guarantees against each payment. This protects your payments in the event the developer fails to complete the property or goes bust.

Finally, make sure that you have insurance for your property, ensure all service contracts are in your name (telephone, water, electrics etc.) and register your ownership of the property with your local Town Hall (Ayuntamiento) – all of which your lawyer or agent can help you do.

 RESIDENCY, TAX, WILLS AND BREXITBrexitThe UK is still a fully paid-up member of the EU so if you are planning to move to Spain permanently there is a very good argument to do so before we leave. Under international law, you will have been deemed to have acquired rights by simply being resident in Spain and it is highly likely you will retain these rights once we leave.

While the host country is under no obligation to provide services such as healthcare, it is again likely the UK will reach an agreement with other EU countries for a reciprocal arrangement as it would be in the interests of the EU to look after their citizens given the 3 million EU nationals in the UK and only 1.3 million Brits living across Europe.

If you’re buying a holiday home and not planning to live in Spain permanently then very little changes, once the UK leaves the EU it would be possible for Spain to impose additional or higher taxes on British owners, for example on a house sale, because the basic right for a Brit on the Costa Blanca to enjoy the same tax treatment as a Spanish national will have been lost. What is unlikely is that Spain would impose anything overly-draconian to deter British buyers, given we account for one in five of Spanish property purchases by overseas buyers.

The information below refers to our current status as an EU member nation.

Tax and tax residencyIt is essential that you fully understand the difference between being resident in Spain and being tax resident in Spain.  The two things are quite different and can have a profound impact upon you and your family, particularly with regard to inheritance tax.

If you intend to reside in Spain for longer than three months then you must apply to go on the National Foreigner’s Registry (Registro Central de Extranjeros, which can be done when you apply for your NIE number.  However, registration on the National Foreigner’s Registry does not mean that you are tax resident.

To be tax resident in Spain you must make an annual tax declaration to the Spanish tax office.  This will be deemed as mandatory according to a number of factors such as: if you live in Spain for 183 days a year or longer or if your main and primary residence is in Spain or if your spouse and children live in Spain or your main economic interest is in Spain.

The vital point is that you must actually make a tax return to the Spanish tax authorities (even if it amounts to a nil return) to be designated as tax resident and thereby eligible for free healthcare (see below) and tax exemptions on inheritance tax.  Importantly, if you are deemed to have been tax resident and you have not made an annual tax return then you will not be eligible for tax exemptions.

 Inheritance TaxSpanish inheritance tax is very complicated and differs depending upon which Autonomous Region (there are 17 and 2 autonomous cities in Spain) you live in. 

However, of one matter you can be certain: as a non-tax resident of Spain (see above) you will not be entitled to any Spanish inheritance tax exemptions. This means that the full, unmitigated force of Spanish inheritance tax will be unleashed on the assets you own in Spain should you die. This can mean:

Your assets in Spain have Spanish inheritance

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Bookswww.movesafelytospain.comThe ultimate guide to buying property and living in Spain

www.books4spain.comSpecialist on-line books shop for books about Spain

British Embassyhttp://ukinspain.fco.gov.uk/en/British embassy in Madrid

Governmental Informationwww.dh.gov.uk/travellersHealth travel cards information

www.ine.esWebsite of the Spanish National Statistics Institute

www.registradores.org/principal/indexx.jspWebsite to buy Nota Simples

www.ukspain.comUK government advice about Spain

Information on Petswww.defra.gov.uk/animalh/quarantine/pets/Pet passports

English language newspapers and information siteswww.britishexpats.com Forums and useful articles

Spanish Language Courseswww.donquikote.org

FURTHER USEFUL INFORMATION

tax applied without (effectively) a nil rate tax band. In the UK, by comparison, you will not be taxed on the first £325,000 of your assets.

There is no such thing as nil rate inheritance tax on the disposition of your Spanish assets between you and your spouse upon the death of either.

  By comparison, if you are tax resident in Spain then in the Comunidad de Valencia, inheritance between husbands and wives has a tax exemption available of up to 99%.

WillsIf you die intestate then any assets in Spain will be taxed at the full rate.  So, making a Will is essential.  Indeed, it makes sense to have a Will in Spain for your Spanish assets (lodged at the Wills Registry in Madrid) and a Will in the UK for your UK assets.  However, care must be taken to ensure that the terms of one Will do not revoke the other Will and this requires the attention of a lawyer specialising in probate matters.

Spanish law defines to whom you must leave your assets.  However, as a foreigner, you can leave your assets to whomsoever you wish.  To ensure this, a term in your Will must state that the personal law of your country (the UK) allows for free disposition of property left by testament.

HealthcareSpain is a ‘healthy’ country in which to live, with an average life expectancy of 82.6 years – fifth highest in the world.

 Spain has an extensive network of state hospitals and health care centres (centros de salud). Almost every village has a doctor (medico) who will attend his medical centre daily. Normally a nurse (enfermera) will be in attendance and often a patient can see his doctor the same day. Meanwhile, there is a network of hospitals across Spain with accident and emergency (A&E) departments (urgencias).

Children under 14 must be seen by a paediatrician (médico de paediatrica), rather than

a GP (médico de familia). There are, therefore, medical clinics specifically for children.

Spain also has private healthcare, to which a significant minority of the Spanish population subscribes.

Healthcare is free for pensioners (over 65) and for those who pay into the Spanish social security system.  If one adult pays into the system then this will ensure cover for all the family (spouse and children).

If you are eligible for Spanish state healthcare, you will need to apply for a SIP (Sistema de Informacion Poblacional) card. This is like a credit card and displays your details and NIE number. You must show this card whenever you attend a medical centre, whether for an appointment or treatment. You will also need it when you go to a pharmacy to obtain your prescription.

Schools and educationIn Spain, education for children is compulsory from the ages of six to sixteen. Primary education (primaria) lasts six years followed by four years of compulsory secondary education (ESO), at the end of which a certificate of education is received.

The academically demanding Bachillerato takes two years and is roughly equivalent to the UK’s A Levels.

State education is free and there are primary schools (escuelas) in virtually every village with secondary schools (institutos) in most towns.

Great care needs to be taken when moving a child to a Spanish school (when not fluent).  Experience suggests that a child older than twelve or thirteen will have great difficulty learning a new language (Spanish) and successfully undertaking their academic work at the same time.

There are a number of private international schools in Spain, some of which teach the English curriculum (in English).  These are usually located along the coastline or close to the big cities and are favoured by wealthy Spanish families.

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