Buying Guide Details

Buying Property in rural Spain

Where to buy property in rural Spain

While many overseas property buyers look at coastal Spain because of its fantastic climate and the wonderful Mediterranean beaches, there are some who are looking inland for a rural property away from the developed resorts. Even with rural property values rising fast over the last few years, prices are still often much lower than equivalent properties on the coast and property buyers can expect a good deal more property for their money in ‘the real Spain’.

Some will opt to purchase a cheap farmhouse or finca in need of total renovation, but bringing a ruin up to scratch might involve installing even the most basic utilities and will certainly add to the cost of the purchase. If such an undertaking is too daunting, property buyers can pay more for a habitable rural property. The asking price will also be influenced by the size and quality of the plot and outbuildings, though for some the prospect of a working vineyard or olive grove is all part of the allure.

There’s no doubt that a significant element of overseas property buyers love the idea of an idyllic country life abroad, away from the expats and among the local people. While a life outside the urban centres is by no means an easy option with amenities likely to be few and far between, it certainly can offer value for money and an authentic and rewarding experience in Spain amongst the Spanish people.

The Process of Buying Property in rural Spain

Anyone wishing to buy (or sell) a property in rural Spain must first obtain from the state – in person – a fiscal number for foreigners known as NIE (numero de identificacion de extranjeros)
Once the property buyer has received the NIE number, the property buyer’s lawyers can make an offer on their behalf. When a price has been agreed, it is recommended that both parties sign a preliminary agreement which outlines details such as the completion date
A deposit of 10% is the normal amount placed to secure the deal. After this, if the property buyer pulls out they lose the full deposit but, should the seller decide not to go ahead, he/she must return double the amount of the deposit – i.e. 20% – to the property buyer
If buying property in rural Spain off-plan, it is usual for payments to be broken into stages, the balance being paid when construction finishes
On completion, when all the necessary checks have been carried out, both parties sign the escritura (title deeds) in the presence of a notary. The buyer then pays the balance, plus all other fees and taxes. Copies of the deeds are sent to the Land Registry and the tax office.

Homes Overseas Property Club

Homes Overseas has joined forces with a collection of IFA specialists to form the Homes Overseas Property Club (HOPC), designed for existing and prospective overseas property homeowners.

The Club – which has access to international lawyers in no fewer than 43 different countries - has been set up in order to guide people through some of the various issues relating to buying and maintaining a property overseas. It offers advice on a range of topics, including financial, legal, insurance, taxation, property management and foreign currency matters.

For further information please telephone 0845 838 7142 or email info@homesoverseaspropertyclub.com

Fees & Taxes

Taxes and fees usually amount to around 10% of the total purchase price of the property in rural Spain
Taxes payable depend on whether the property in rural Spain being purchased is new-build or resale. Currently, transfer tax of around 7% is applied on resales, which includes stamp duty. For new-build properties, VAT (IVA) of 7% is payable in addition to 1% stamp duty
On top of this there is also plusvalia (capital gains tax), which is set by the local authorities and depends on the area concerned and the amount of profit being made on the sale. This is usually paid by the seller
If the property buyer is purchasing land or commercial property in rural Spain rather than residential property in rural Spain, VAT is 16% as opposed to 7%. Stamp duty remains the same
Most Spanish lawyers charge around 1% of the final purchase price, and notary fees are around 0.5%
Agents’ fees can vary anywhere between 2% and 15% – so be careful not to be ripped off