Buying property in Spain

01Why to rent before buying property in Spain §

Spain in February is a different country from Spain in July — we wrote about exactly this in the Costa Blanca in winter. The village that hums in August can be shuttered, windy and closed for the season in January. The urbanisation that felt sociable in the summer can be two-thirds empty.

And there is the thing nobody says out loud: the house with the view is up a hill, and the hill is a different proposition at eighty than at sixty-three. So are the stairs, the pool maintenance, the forty-minute drive to a hospital and the walk to a bakery.

The people we meet who regret their purchase almost always bought within three months of arriving. The ones who are happy rented first, drove around in the rain, and bought their second choice.

We are paid by you, not by the seller. That is why we can say: not this one.

02The real cost of buying property in Spain §

The purchase price is not the number to budget against. Allow for these on top:

• Transfer tax (ITP) on a resale property — set regionally; in the Comunitat Valenciana allow around a tenth of the price.
• VAT plus stamp duty (IVA + AJD) on a new build from a developer instead of ITP.
• Notary and land registry — modest but not trivial, and scaled to the price.
• Your lawyer — typically around one per cent, and the best money in the transaction.
• An independent survey — unusual in Spain, essential on an older villa. Damp, roofs, pools, boundaries and illegal extensions are all real.
• Currency — on a large transfer, the difference between a bank’s rate and a specialist broker can be thousands. Nobody tells you this because nobody is paid to.

A working rule: twelve to fourteen per cent above the price, and more on a new build. Anyone quoting you materially less has left something out.

03Legal checks when buying property in Spain §

1. Nota simple from the land registry — who actually owns it, and what charges sit against it.
2. Debts follow the property, not the seller. Unpaid community fees, IBI and utility arrears become yours. Check them.
3. Planning and licences — that the build is legal, matches the registry, and has a first occupation licence. Unregistered extensions are extremely common.
4. Community rules and accounts — the reserve fund, any pending special levy, whether there is litigation.
5. Energy certificate and habitation certificate.
6. Your own lawyer, engaged by you. Not the agent’s recommendation, not the developer’s, not the one who is "very good and speaks English" according to the seller.

The deposit contract is where people get committed before they are protected. Do not sign anything, or transfer any reservation money, before your lawyer has read it. A reservation fee paid on a viewing afternoon is the single most common way to lose leverage.

04How to own property in Spain §

Whose name the property goes into, and in what proportions, is a decision with tax and inheritance consequences that last for decades. Joint, sole, in a company, with a usufruct for a surviving spouse — each has different results on a death.

Getting it right at the notary costs nothing extra. Changing it later can cost a great deal. This is why we insist that the will and the purchase are planned together rather than years apart — see Spanish wills and inheritance.

05Annual costs of owning property in Spain §

• IBI, the annual council property tax.
• Community fees, if it is part of a complex — and these can rise sharply for lifts, pools and repairs.
• Rubbish collection, billed separately in most towns.
• Home insurance, and worth checking it covers an empty property if you travel.
• Non-resident income tax if you own before becoming resident, even with no rental income.