House buyers should know the pitfalls of buying a property in Spain. Of course, you want everything to go smoothly for your dream purchase and the ideal opportunity to live a sun and sea lifestyle. Buyers in Spain look forward to dining Mediterranean style and enjoying the Spanish culture while making a wise real estate investment.
However, as with any house sale worldwide, there is red tape, stress, and strict legalities to follow. While property sales going wrong is rare, forearmed is forewarned. When you are also knowledgeable about the pitfalls, you remain in control of your property purchase in Spain with confidence. So, let’s look at what information to know.
Pitfalls of Buying a Property in Spain
1: Buying Tax
When declaring the tax value in Spain of properties, there are two prices. First, the valuation estimation and then the market purchase price. If the valuation is higher than the market price, that is what you will pay tax on. Secondly, Spanish authorities will claim the difference back later if property buyers pay under the tax rate, with tax fines incurred.
2: Currency Fluctuations When Buying Property
One crucial aspect all buyers in Spain need to be aware of is the currency fluctuations if your income is in a different currency to the market Euro. Source, an exchange company, to lock in rates and secure better currency exchange and transfer fees and rates, rather than using banks. You can save hundreds this way.
3: Illegal Properties and Registration
Lawyers in Spain perform important checks, including whether the house is legal and registered with the land registry. If they do come back with disappointing news, you need to make a choice. First, instruct the seller to sort out the legalities, in which case, the purchase becomes long and drawn out. Or lose your deposit.
4: Not Using a Good Lawyer in Spain
Not employing a lawyer may sound tempting to save money on fees, but we strongly advise all house buyers in Spain to use one. First, most foreign house buyers in Spain don’t speak Spanish, so finding out all the information to safeguard your investment is a headache. Secondly, without good knowledge of Spanish customs and culture, you will require assistance to buy property. Lawyers are there to perform certain checks, give you help and legal advice and ensure your purchase goes through as required by law.
5: Residency to Live in Spain
When buying property, foreigners can only stay in Spain for three months. Any time after this goes into the residency factor, of which you need to buy a visa. For those who dream of living in Spain or even moving to Spain for the winter, factor extra residency costs into your yearly budget. Residency visas are pretty simple to complete, as seen in thousands of foreigners who live in Spain already.
6: Complex Maintenance
When buying a villa or an apartment in a complex in Spain, you will need to pay a yearly maintenance fee for communal upkeep areas like the swimming pool. Factor this into your annual budget because failure to pay can result in court action and loss of property. Additionally, your lawyer can check to ensure there are no maintenance debts on the property.
7: Extensions and Renovations
When buying an older property, chances are there has been renovation work or extensions added. However, in some cases, the property owners in Spain did not declare these changes to the land registry. The thought never occurred that an extra room or a swimming pool would need permission. Your lawyer in Spain will check for this at the time of buying.
8: Not Understanding the Legal Contract
In most cases, foreign buyers assume the property buying process in Spain is the same as in their home country. Hence, they don’t take the time to understand the contract and what they are liable to pay. Therefore, read it very carefully, and double-check that you are not paying costs that the seller should.
9: Buying Resale Properties
Furniture, appliances, and other household items are included in many resale properties. Therefore, have an inventory when drawing up the contract in Spain to avoid misunderstandings or the seller changing their minds. Remember, the house should be sold as seen.
10: Rental Incomes in Spain
Real estate investors who plan to generate tourism rent income from their property should check the market beforehand since many places in Spain are saturated with them. Additionally, find out if there are any local, regional, and country-wide restrictions on tourism lets.
11: Buying Off-Plan Properties
The Spanish government introduced laws to protect purchasers of off-plan properties because, previously, developers went bankrupt, and people were left paying a mortgage for a non-existent property. Therefore, if buying an off-plan property, only use developers in Spain who have bank guarantees. This will protect your deposit and staged payments if the construction does not finish.
12: NIE number and Bank Account
Many people think finding a property is the first step of the buying process in Spain. However, it isn’t. For a smoother and quicker purchase, get your NIE number first. This is a foreign identification tax number. Also, open a bank account to ensure a Spanish paper trail of all payments and pay future bills.
13: Local Research
Some foreigners buy property where they have holidayed for years. However, vacationing and being a property owner are two different things. Do local research on property values and amenities and pre-empt any situations, such as paying the electric bill and property taxes.
14: Financial Mismanagement
One of the biggest pitfalls is not sorting out your finances before starting to search for a house. Remember to factor in extra purchasing costs and mortgage fees. Also, factor in yearly running and maintenance costs. Good financial preparation is vital when finding a house to buy.
Also, About Property in Spain
Property Buying Process: If you want to know how to buy a property in Spain, rest assured of a straightforward procedure. Experts say buying a property is highly stressful, so purchasing a home overseas naturally makes buyers nervous. However, research, the best knowledge, and taking your time goes a long way in making buying easier. This guide and article explain everything.
How Much is Spanish Property? Occasionally, we get inquiries about how much property is in Spain, the extra purchasing costs, and any other financial aspects to consider. While we can answer the latter two questions directly, potential homebuyers should narrow down to specific regions for property values.
Contact Us: We are Spot Blue International real estate agents, and we have helped hundreds of buyers purchase houses in Spain. Contact us today and talk with an agent about any more questions about the pitfalls of buying property in Spain. Otherwise, you might also like to browse our portfolio of apartments and villas in many different areas of Spain. Each listing contains everything, including price, location, home features and how to arrange property viewings in Spain.
Property shown in photos – https://www.spotblue.com/property-for-sale/spain/malaga/marbella/villas/sensational-villa-in-nueva-andalucia-esmarv595