When buying in Spain, every first-time buyer needs to be aware of the property market. Whether homebuyers want a budget property to buy below 100K, or a high-end villa with six-figure property prices, buying property in Spain, or indeed in any other country, is nothing short of a huge decision, and big lifestyle purchase.
Whether buying a bargain holiday home or looking to invest, before taking any steps towards purchasing a Spanish property, it is vital to work out finances with affordability in mind. Decide how much money do you intend to spend and where will it come from. Will it involve either selling or mortgaging UK property or selling other assets to raise the necessary amount?
When purchasing any property, also consider all the extra costs involved. Buyers who don’t have a firm grasp on available money and knowing at which stage of the home-buying process the funds need to be released sometimes get attached to an investment property they can’t buy. Therefore making a financial plan is perhaps the most crucial step on the path to purchasing a home for sale without unexpected problems.
About Buying in Spain – Property Guide
1: Determine Your Property Budget
Once you have worked out exactly how much to spend on your new first home in Spain, eliminate any properties out of the price range. This lessens the chance of becoming emotionally attached to a family home you can’t buy.
Make a note of the following critical financial points:
- How much available hard cash there is.
- Find out how much of a down-payment to pay, and work out the monthly mortgage payment and interest rates if borrowing.
- Decide whether you will remortgage your UK home to release equity.
- Add up all fees and taxes the average homebuyer must pay.
- Determine the maximum budget for the property, fees and taxes included.
- Add up the overall cost of home-ownership per annum.
- Estimate how much it will cost to spend time in your dream home if you are not moving permanently.
2: Closing-Costs for Buying
There are further costs apart from the purchase price involved with purchasing a property in Spain. These costs depend on a few different factors:
- Whether the property is a new build or a resale
- The purchase price of the home
- Whether buying the property with a mortgage
Allow approximately 10% to 12% of the total purchase price for fees and taxes. So buyers looking at a 150,000€ budget should consider an extra 16,000€ for costs.
The fees and taxes incurred when house buying include the following:
- Transferring tax for the deed on a resale home
- ITP – Levied at 8% across Spain, will need to be paid. (ITP is levied at 10% in the Costa Blanca region, except for Murcia)
- Notary fees- approximately 400€ to 900€
- Land Registry fees – roughly half of the cost of the notary fees
- Fees for independent lawyers, usually between 1,000€ and 2,000€
- Property bought with mortgages also evoke valuation fees
- Stamp duty – approx. 1.5% of the mortgage deeds, and a lender’s commission, which generally around 1% of the capital loans
- On new build property, buyers pay 10% VAT rather than an ITP
- On new builds, 1.5% of the total purchase price goes on a stamp duty
If this list overwhelms you, do not worry because, as your real estate agent, we have experience in property sales, first-time home buyers and will take care of the paperwork on your behalf. All you need to do is know exactly where the money will come from and exactly how much you can borrow, and you will be one step closer to buy a house in Spain.
Where to Buy a Home in Spain
When looking at properties in Spain, there are many Mediterranean coast and inland destinations to choose from. Some that stand out for foreigners buying a new home include the Costa Del sol, Costa Calida, Alicante, Torrevieja, Balearic-islands, Estepona, Canary-islands, Benidorm, Ibiza, and Tenerife. Deciding which location is best depends on two factors; your lifestyle preference and budget. Please find out more about our article on the best places to buy a property.
Buying Your First Home
Once finances are sorted out for your property purchase, you can start to find your perfect home. The housing market in Spain is full of apartments and villas for sale; hence you do not have to compromise. Decide on a new property, resale or off-plan home and then begin your property search by browsing our new listings. Each contains everything to know, including the type of property, number of bedrooms, bathrooms, home features, price, and location. Also listed are contact details to find out more via email or arrange a viewing.
About Us: We are Spot Blue, an international estate agent who helps people who plan on buying in Spain. Our expert knowledge of the property market stems countrywide with specific attention on the southern part of Spain, including the Andalusia region. Before buying, get in contact today to discuss houses for sale in Spain. Otherwise, our blog section includes more helpful information for anyone looking at renting, buying a home, becoming a homeowner, looking at houses for sale, the Spanish real estate market, and living in Spain.