Spain

With over 300 days a year of guaranteed sunshine, Spain has been described as the sunniest country in Europe.

Costs

If you are thinking about buying property in Spain don't forget to include funds for the various taxes when working out your budget. There's not only the tax when you are buying your property, but there is also the local tax and housing rates to pay each year.

Fees: As with any purchase there are a variety of fees involved which usually add up to around 10% of the overall price.

New Property: When you buy a new property in Spain you will be liable to pay 7% IVA which is the equivalent of VAT plus an extra 0.5% - 1% in stamp duty.

Land Tax: Impuesto Municipal sobre el Incremento del Valor de los Terrenos - or the shorter version, 'plus valia' which rolls off the tongue with slightly more ease. This is a tax based on the increase in value of the land your property stands on but which is low on modern properties such as apartments and little land is involved.

Notary Fees: This fee is fixed by law and is based on a sliding scale depending on the sale price - check with your 'Notario' before proceeding.

Lawyer: Hiring a lawyer is optional to complete the sale but it is highly recommended. If you are getting a mortgage in Spain most banks get their own lawyers to check out the legalities of the sale and charge a much lower rate.

Deed Registration Fee: This is the fee to register your deeds in Spain and is typically no higher than €500.

Yearly Rates: Most homeowners have to pay a yearly rate to contribute towards the cost of street lighting, rubbish collection etc, this rate depends on the area itself and is paid to the local council.

Process of buying

Contract: The first step is to sign the contract or contrato. These can vary. A private purchase contract, which is standard, is binding for both parties and involves a deposit. An option contract isn't binding but you lose your deposit if you withdraw from the purchase. A reservation contract will secure a property for a few days if you pay a nominal deposit.

Deposit: This is normally referred to as - deposito, and means you put down 10% when you sign your contract, paying the balance at the completion date. This is refundable if all the conditions laid out in the contract are not met e.g. if you can't raise the mortgage.

Tip

Make sure that conditional clauses such as not being able to raise a mortgage are laid out clearly in the contract.

Completion: You are now ready to sign the deed and transfer ownership, this usually happens three months after you have signed the contract. This takes place in the notary's office and it is normal to have all parties present.

Balance: You are now ready to pay the balance, either by bank draft or bank transfer.

Registration: Now for the important bit - only when the deed has been registered are you the legal owner and your notary should have this completed within 30 days of it being signed.

Tip

Inheritance law is complicated in Spain so before you decide in whose name the property will be registered, consider the implications further down the line.

Final Tips

Tip 1: Use an estate agent. You can't afford to be without one, if you choose to go it alone, be very careful.

Tip 2: Rules & Regulations - always seek sound legal advice before you sign on the dotted line.

Tip 3: Find the location that's right for you, if this means taking your time - then take your time.

Tip 4: Decide if you are buying for investment only in which case think with your head and not your heart.