Occasionally, we get enquiries that ask how much is property in Spain, what the extra purchasing costs are, and about any other financial aspects to consider. While we can answer the latter two questions directly, when it comes to property values, potential homebuyers should narrow it down to specific regions. Like many other real estate markets, purchase prices vary from village to town to city.
Other factors also affect regional housing price indexes, mainly supply and demand of property versus buyers, and local infrastructure. Therefore property buyers should learn about areas they plan to invest in to maximise their potential capital appreciation. Let’s look at what to consider when buying a house in Spain.
How Much is Property in Spain?
1: Most Expensive Place to Buy Property in Spain
In a 2021 study by the Idealista website, certain streets stood out for their prices per square meter as Spain’s most expensive. However, given local property markets stand-alone, we can also apply their findings to neighbourhoods as expensive places to buy a house in Spain. They were Calvia in Mallorca, Benahavis in Malaga, Calle Mozart in Marbella, Urbanizacion Cascada de Camojan neighbourhood in Marbella, La Finca, Calle Canete, and La Moraleja, in Marbella, and Calle del Camino Ancho, in La Moraleja. Grouping findings, they said prominent areas for luxury homes in Spain include Catalonia, Valencia, Canary Islands, Basque Country, and Cantabria.
2: Cheapest Place to Buy Property in Spain
Idealista conducted another study, but this time based on cheap places to buy a house in Spain according to prices per square meter. The most inexpensive place was the El Carpio de Tajo neighbourhood in Toledo. This was followed by Barruelo de Santullan in Palencia, Cebolla in Toledo, and Almaden and Herencia in Ciudad real. Prices range from 400 to 450 Euros per square meter.
3: How Much is Property Purchase Tax in Spain?
Property purchase tax in Spain costs between 8 to 11.5%, dependent on new or resale property. Usually sold by developers, new properties incur 10% VAT and 1.5% stamp duty. Meanwhile, resale homes commonly sold by owners direct or via an estate agent incur property transfer taxes which operate on sliding scales dependent on property prices. For example, any property selling for 400,000 or below incurs 8% tax. This rises to 9% for properties worth 700,000 euros and 10 per cent on any home over that amount.
4: How Much is Inheritance Tax in Spain?
Spain’s inheritance tax laws depend on several variants. Inheritance tax is called successions tax, or in Spanish impuesto de sucesiones y donaciones. Both residents and non-residents must pay it. As well as receiving property from deceased relatives, taxes also apply to money, whether this is from relatives or life insurances. Exceptions are the death of a spouse. Since Spanish Civil Code regulates inheritance tax, percentages vary from region to region. So, residents who have lived in Spain for five years or more will use regional laws. While those who are not residents but inherit money or property use state laws, regardless of the property location.
5: How much Deposit do I Need to Buy a House in Spain?
Whereas residents in Spain have access to competitive mortgage markets, non-residents are more limited by choices. So, when considering mortgages, shop around to find good deals. Generally, Spanish banks lend between 70 to 80% of the purchase price, so aim for deposits between 20 to 30%. However, also remember to factor in mortgage administration costs.
6: Extra Purchasing Costs
As well as property budgets, factor between 10% to 15% for extra purchasing costs and taxes, which vary from region to region. In addition, factor in notary, solicitor, land register, gestoria, and banking costs.
7: How to Buy a House in Spain
Start by browsing our property listings of apartments and villas for sale. Each listing includes area info, photos, bedrooms bathrooms, home description, and location. To receive further information about that property or to arrange a viewing, just use the contact details.
Once you have found a home to buy, we will get your NIE Foreigner Identification Number. You can do this in person, through the Ministry of the Interior, the Spanish Embassy in your country of origin, or an appointed proxy. Next, open a local bank account. While it is not a legal requirement, it’s helpful to pay taxes utilities, get local mortgages and transfer money. As a real estate agent in Spain, we handle everything and guide you step by step, so you are always knowledgeable.
8: About Buying Rental Property
Some buyers look at rental property investment to cover purchasing costs. Advertising flats to rent for holidays requires creative marketing skills to ensure high occupancy rates. Additionally, short term rental properties flood many coastal tourism resorts hence expect lower rental yields. Carefully vet long term tenants and research rental laws to know your legal obligations. Income taxes on rentals have varying factors, and it will be worth employing someone to handle it. In addition, non-residents will need a professional company to manage bookings, cleans and deposits.
9: About Investment Property
Spain often attracts international real estate investors. However, don’t think about flipping houses for sale to make profitable real estate investments. When buying an investment property, keep it mid-to-long-term, simply because many places in Spain have an abundance of new housing; hence annual growth is slow. Additionally, property types matter. Furnished resale homes offer annual appreciation, while off-plan projects allow property investment buyers a discount for an early purchase.
10: Money-Saving Tip
Naturally, Spanish real estate markets operate in Euros, so homebuyers need to transfer currencies. Rather than using banks, choose foreign exchange companies like Wise, who give better exchange rates and lower transfer fees.
11: Best Place to Buy Property in Spain
This article looks at regions leading the property market in Spain and what makes them stand out as desirable places for home buyers and anyone looking to invest in property. As a popular holiday and expat destination for Brits and other nationalities, cities, and small coastal resorts all over Spain bring something unique to owning international real estate. Some areas prove better than others for buy-to-let potential, while others developing infrastructure and practising sustainable urban planning offer higher capital appreciation.
Also About Spain
Moving to Spain: Some clients ask, is moving to Spain a good idea? The answer depends on lifestyle circumstances, if you are a family, or need to work. Of course, everyone’s reasons for moving to Spain are different. However, many ex-pats living in Spain wholeheartedly endorse the idea. Roughly 380,000 registered people lived in Spain, with Brits making up a massive percentage of overseas nationalities, despite Brexit. To help decide, let’s look at benefits, disadvantages and what to know before packing your bags.
Best Cities to Live in Spain: Cities in Spain form a magnificent cooking pot of modern, new trends, and traditional Spanish culture. There are many choices from history to nightlife to food and beaches, whether you want to visit or move to Spain. Madrid, Barcelona, Valencia feature as Spain’s most significant cities. However, this article discusses which cities feature the best places for foreigners. We also look at why they attract foreigners and list things to see and do while there.
About Us: Spot Blue is an international real estate agent specialising in property for sale in Spain. We have helped hundreds of buyers and sellers with investing in property abroad. We hope this article gave insight into how much is property in Spain, but call us to know more about Spain’s investment properties. Additionally, follow us on Facebook to stay updated with emerging property news from Spain.