Spain has a homeownership rate of over 75%, and much of the country's estate is already owned by foreigners. At present numerous expat communities are flourishing in the landscape.
If you are also considering owning property in Spain, you must know the present estate market there post-Brexit. Read this guide to get a proper idea of all that you need to know before you buy a house in Spain.
British expats have historically been the greatest single group to invest in Spanish estate and this trend has persisted even during Brexit-related developments. As of 2020, the British owned about 13% of foreign-owned properties in Spain.
However, the Spanish estate market has stabilised after the pandemic. It even appears to already make strides toward recovering from this global health crisis, as average sale prices rose by 2.1% in 2020's 2nd half.
But several regulations to purchase and sell properties have changed post-Brexit for British people. However, British expats can still buy a property in Spain as per their choice.
Spanish property taxes differ depending on whether you purchase a new home or a resale property.
A property is considered new if it has never been sold before; in this instance, a developer typically sells it directly.
Homes that have been sold at least once before, are referred to as resales. This covers recent homes that banks have acquired or assumed in the event of mortgage payment default, for instance:
For example, you would have to pay 1.5% of the purchase price, that is, the stamp duty (AJD, or legal documentation tax) rate.
On the other hand, if you are buying a new house, you would be subject to IVA or VAT, levied at about 10%.
Transfer tax, or ITP in Spanish, is the only tax imposed on purchasing real estate sold previously. The payment is determined by a sliding scale and the cost of the property.
When you purchase a home, you must pay fees for services in addition to taxes, irrespective of the country. These are a few such payments that you might have to make when purchasing a property in Spain:
Notary Fees
The fee is levied by a notary who created the title deeds for a particular sale and witnessed both parties' signatures on the deeds.
This amount is determined by the purchase price and the complexity of the title deeds.
However, acquisitions, including mortgages, are subject to higher notary fees even though you will probably pay about 0.5 -1% of the cost.
Land Registry Fees
Once the transaction is complete, the Land Registry (Registro de la Propiedad) formally registers your property's ownership.
Depending on the purchase price and the use of a mortgage, a fee ranging from 0.5 - 1% is added for this.
Gestoria Fees
It is customary for you to take assistance from the gestora to handle the necessary paperwork related to purchasing a property in Spain. The gestora is in charge of certain duties, such as:
a. Making sure that your taxes are paid.
b. Fetching the notarized deeds and bringing them to the land registry to be registered under your name.
c. Registering you for community fees and local council taxes.
d. Changing the ownership of your utility supplies and establishing a direct debit for such payments.
Estate Agent Fees
The seller often covers estate agency fees. Depending on the property type and whether the agent has an exclusive contract to sell the property, fees can range from 2% to 10% (or more).
You don't need to budget separately for estate agency costs in your calculations, as they are typically included in the purchase price.
Mortgage Fees
If you are financing the purchase of your Spanish property, you must account for bank fees in your budget.
In addition to the mortgage payments, you will also need to pay for an appraisal, which typically costs around €500.
These usually vary depending on the type of mortgage and the loan amount. However, since it is a part of a guideline, anticipate paying at least 1% of the mortgage value in fees.
The buyer's ability to acquire a home in the nation is unaffected by their nationality, and the procedure remains exactly the same.
You can own a property if you successfully locate a seller, settle on a price, and are prepared to pay that particular sum.
However, as a British citizen, you must pay the Non-resident Income Tax (IRNR). On the other hand, for citizens of EU/EEA nations, Spain levies a 19% rental income tax. They can also write off costs related to renting.
These costs consist of the cost of upkeep and repairs for the rental property, household insurance premiums, costs for third-party services, community dues, etc. These costs can significantly reduce the real tax rate.
Before Brexit, British people enjoyed the freedom of movement as EU citizens, allowing them to travel, reside and work in any country within the European Union, including Spain.
But the scenario has drastically changed as of 1 st January 2021. However, a visa or any travel document other than a passport is still not essential for UK citizens to visit Spain for a vacation.
You are currently permitted to visit Spain whenever you like as a tourist, as long as you do not remain for more than 90 days in any 180-day period.
Usually, the entire procedure of purchasing a property in Spain can take up a significant amount of time. Since the Spanish government now limits your stay there to approximately 3 months, you should get most of the settlement done remotely.
Hire a reliable estate agent in Spain and send all the taxes and mandatory fees to their account. This way, you can visit Spain only to sign the final contract and spend a lovely vacation immediately.
However, do not choose banking facilities to send your money to, as that would only add up more charges on your overall expenses. Instead, choose an online alternative like The Currency Club.
We let you make international payments online and keep a nominal margin as our profit. There are no hidden or unreasonable charges, which is why we can offer you competitive exchange rates. Furthermore, you can check the interbank exchange rate on the very page for international transactions making the entire endeavour transparent for you.
We have made every effort to ensure that the information published here is correct and accurate, however you should check and confirm the latest exchange rates with The Currency Club directly prior to making a decision. The information published is general and does not consider your personal objectives, financial situation or particular needs. Full disclaimer available
The Currency Club's officers, employees, representatives or agents shall not be held liable for any damages or injury resulting from your access to, or inability to access this internet site, or from your reliance on any information provided on this site or any accompanying literature or documentation.
The information and material provided on this site has been collected on a best efforts basis and does not constitute an offer to sell or the solicitation of an offer to buy, any currencies or securities and must not be relied upon in connection with any investment decision.
Whilst we take reasonable care to keep the information on the website accurate and up to date, there may be occasions when this is not possible and figures, fees etc are all subject to change. All facts quoted about 'The Currency Club' on the website are in relation to group statistics and not individual subsidiaries, unless otherwise stated.
Blogs including examples or case studies are provided for your information only and are not intended to predict future moves in exchange rates.
If you are in any doubt as to the suitability of any foreign exchange product that you are intending to purchase from The Currency Club, we recommend that you seek independent financial advice first.
Telephone calls are recorded for training and quality assurance purposes.
The Currency Club makes no representations, warranties, or assurances as to the accuracy or completeness of any information derived from third party sources.
The information and material provided on this site may not be reproduced or distributed, in whole or in part, without the prior written consent of The Currency Club.
A page for us to share with you our thoughts on everything to do with with foreign exchange and much more. From new product launches and widgets to political announcements, market insights and even where to head on your next holiday look no further, you'll find it all here.
March 2022
There can be multiple reasons for which you would need to send money abroad. Be it to pay for an item, to buy a property or just transfer money to a loved one.
Read More
October 2020
As a new year begins and the January blues sets in, many will return to their desks attempting to tackle their backlog of emails but at the same time distracted by which destination they should escape to next..
Read More
December 2020
According to Mintel research, 43% of holidaymakers used a debit or credit card last year and this seems to be on the rise with the 30-45 year age group.
Read More
Overview
Faq
Reviews
Back to home page