Buying Guide Details

Buying Property in Spanish Cities

Overview

Though most overseas property buyers will naturally look to Spain’s coastline to find their dream property, there are some who opt for a property in one of the country’s diverse urban centres, either as a place to live and work or as a straightforward investment.

Cities such as Madrid, Barcelona and Valencia can offer the property buyer a choice of colourful Old Town districts and smart outer suburbs as well as rental opportunities to professionals – with many international companies setting up shop in Spain, their commercial centres are an increasingly rich seam of rental potential. They also provide a wealth of culture, leisure and nightlife choices for domestic and international tourists.

There are a number of cities with a distinctly ‘Spanish’ flavour that appeals to some property buyers. Seville, Salamanca, Granada and Cadiz have centuries of history and are much less commercialised, factors which draw discerning property buyers who want urban property and are willing to integrate with the local people and lifestyle.

In the north, the port of Bilbao is fast becoming a cultural gem, combining daring modern architecture and infrastructure with a long, rich Basque history. Proximity to San Sebastian, Santander and the border with France make it an underrated city comparable with any in Spain.

The Process of Buying Property in Spainish Cities

• Anyone wishing to buy (or sell) a property in Spainish Cities 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 porperty 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 buyer
• If buying property in Spainish Cities 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 will offer 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 Spainish Cities
• Taxes payable depend on whether the property 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 in Spainish Cities, 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 Spainish Cities rather than residential property in Spainish Cities, 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