Important Things to Consider When Buying a Property in Spain
Dreaming of owning a flat in the sleek city of Madrid or a holiday home villa on Costa Blanca? Here’s what you need to know: Spain homeownership levels are high, with an estimated 80% of residents
Dreaming of owning a flat in the sleek city of Madrid or a holiday home villa on Costa Blanca? Here’s what you need to know:
Spain homeownership levels are high, with an estimated 80% of residents owning their own property. Having suffered from a global financial crisis and then the ensuing property market crash, house prices plummeted by 30% but has become to stabilize in the last few years.
Prices had gone back to rising steadily since 2016, however, the Covid-19 pandemic significantly affected the market. An analysis from the Global Property Guide reveals the pre-pandemic property prices per square meter for 14 of Spain’s 17 autonomous regions.
The Spanish Market
Based on Q3 of 2019, the figures showed that average house prices in major cities such as Barcelona and Madrid rose by 5%, amounting to €1,649 per square meter. Barcelona, Madrid, and San Sebastian are the most expensive cities to buy in, with prices ranging from €3,000 to €3,600 per sqm.
Madrid was the most expensive place to buy land in Spain, with prices of €338 per square meter. The Canary Islands (€245), Catalunya (€184), Andalucia (€171) and Valencia (€158) made the top five. Castilla y Leon is the cheapest place to buy, with average land prices of €66 per square metre.
It’s worth noting that the full economic impacts of the Covid-19 pandemic still remain to be seen. Experts predict that house prices values could fall by 5-10% in the short term.
What Do I Need to Buy a House in Spain?
In order to buy property in Spain, you’ll need an NIE number, which is the Spanish identification number. This is unique to each individual and is essential to carry out any transaction in Spain, so you must have it before signing a deed. The NIE isn’t too difficult to obtain, however it can be a lengthy process so we recommend sorting this out in advance.
Having a Spanish bank account isn’t compulsory, but it will make the process a lot easier. Your payments will be faster and you won’t be charged commissions.
Once you have become a property owner in Spain, you must appoint a tax representative if you’re not a Spanish resident.
Buying Property as an Expat in Spain
This brings us along to our next point, Spain is a very welcoming country when it comes to foreign buyers, limiting the possibilities of common homebuying issues.
First, you’ll need a financial number, obtained by heading to a police station with your passport. This is typically processed on the same day for Spanish and EU citizens and may take a few weeks for non-EU citizens.
Spain also offers something known as a Golden Visa program for foreign property owners, where you get a residency visa upon investing more than £500,000 in Spanish properties.
Important Final Points
The following fees vary from area to area, and many are open to negotiation as there are no fixed fees for lawyers or estate agents:
- Property transfer tax: 6–10% (existing properties) / VAT (or IVA) at 10% (new properties)
- Notary costs, title deed tax, and land registration fee: 1–2.5%
- Legal fees: 1–2% (including VAT)
In Spain, whoever you’re buying from usually pays the estate agent fees, usually charging around 3% of the final sale price.
Who to Contact Before Buying a Property
Esempere is a consulting firm that specialises in real estate. Specialised in giving advice to non-Spanish residents, Esempere will help you in the decision-making process by getting to know in depth your financial needs.
Not only do they act as business advisors maximizing your profits but they are also independent advisors. They are responsible for analyzing and advising on all individual finances.
Based in Elche, just outside of Alicante, Esempere will guide you through the whole process involved in the operation of buying property, as well as providing you with all the necessary information and documentation, and acting as a mediator with the other party.
Phone: (+34) 606 44 51 14