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Ten top tips for buying property in Spain

The Spanish property market is well on the road to recovery and foreign buyers, especially those outside the Eurozone, are once again rushing to pick up a bargain.

Published: 14 May 2015 16:04 CEST

If you are a Brit thinking of buying in Spain, the general election result last week that saw a surprise victory for the Conservative party has made Sterling even stronger against the Euro, so if you are looking to invest in property in Spain there has never been a better time

But to help you avoid the pitfalls of which there can be many, The Local brings you a top ten guide to buying Spanish property from Laura Richards, Spain Buying Guide Country Manager from the  OverseasGuidesCompany.com.

1. Think about your finances as soon as you can

Once you have decided that you want to move to Spain, it’s important to start organising your finances straight away. You will need to raise money for the purchase of a property, taking into account buying fees and any other costs that could arise; this could include legal fees, registration fees, estate agent commission and more.

2. Accept the consequences of currency fluctuations

Photo: Shutterstock

Currency rates fluctuate continuously, as they are transferred on a ‘live’ market. Very often, a buyer will view a property and decide to buy based on the GBP/EUR rate of that day. As rates fluctuate by the minute, by the time they come to complete on the purchase and make the transfer, the rate could have dropped dramatically.

3. Make sure your budget is realistic

It’s so important to know exactly how much you can afford before you make a trip over to Spain to view property. The last thing you want to do is fall in love with a property and then find out that you cannot realistically afford it. We also recommend speaking to a currency exchange specialist to help you assess the risk of currency fluctuations and guide you on the best ways to protect yourself and maximize your budget.

4.Research the Spanish buying process

With such a huge decision as purchasing property, especially one in another country, preparation will always be of paramount importance. Spend time researching online, but make sure that you ensure everything that you read is the latest version– legislations do tend to change regularly. SpainBuyingGuide.com is always kept up to date, and we receive regular contributions from expats in Spain who can update us on changes as they happen.

5. Research the areas you like with care

Photo: Wikipedia commons/Espenca

Don’t presume that everywhere in Spain is hot, sunny and near a beach. There are myriad different landscapes and climates across the country, and it’s so important to assess each area you like the look of and work out exactly what it is you want from your new neighbourhood – in terms of climate, facilities, residents and anything else important to you.

6.Find the right estate agent

Your estate agent will be one of the most important people to help you on your overseas property journey, and it’s important to make sure you chose the right one. You need an agent that specialises in the areas that you are interested in, who will understand your exact requirements, and who has experience in buying or selling with expats from the UK. Researching online is useful, and will give you an idea of the different options you can chose from. If you know someone who has already purchased property in the area, see if they can recommend an agent personally. It’s so important to make sure you have an estate agent that you trust; this will ensure you can make the most of any viewing trips, saving you both time and money.

7. Visit in the off-peak season

Photo: AFP

It’s a good idea to visit your prospective neighbourhood in the winter as well as the summer. The weather will often be a bit colder and the towns a lot quieter than you would expect, and this gives you a chance to familiarize yourself with all the seasonal differences. In the winter months you may also find that the estate agents have more time for you and vendors may be willing to accept slightly lower offers.

8. Consult an independent, bilingual solicitor that you trust

Having an independent solicitor on your side, someone who is familiar with the buying process in Spain, is really important. They will work with your best interests in mind and will be able to advise you at every stage.

9. Think about renting before you buy

Photo: Shutterstock 

If you are still unsure about the best way to make the move over to Spain and purchasing a property while you are out of the country, why not consider renting a property first? You could always spend a couple of months in a few different places until you find your dream neighbourhood.

10. Avoid risk when sending money overseas

Whatever you decide to do, you can avoid the risk of currency fluctuations by making use of a specialist currency product called a forward contract. This enables you to lock in an exchange rate at the time you commit to purchasing the property, meaning you won’t lose any money if the currency markets move dramatically while the sale is in progress. When the time comes to transfer the final balance for a property, you can be safe in the knowledge that the rate (and therefore the price of the property in sterling) will remain the same – no matter what the market is doing.

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PROPERTY

Q&A: What to do if you buy a property built illegally in Spain

Buying an illegally built property in Spain is fairly common but can have several consequences down the line. Here's what you need to know, how to make it legal, whether you can sell it, and the benefits of doing so.

Published: 25 April 2024 09:35 CEST
Q&A: What to do if you buy a property built illegally in Spain

Unfortunately, over the years, many properties have been built illegally in Spain, not adhering to local rules and regulations. Foreigners who don’t know the legislation can easily fall into the trap of buying one of these properties, only to find out later down the line.

Maybe it’s when they come to sell or perhaps it’s when they want to do works or improvements on the property.

There are several reasons a home could have been built illegally in Spain. Firstly, it could have been built on the wrong type of land. This is it could have been built on suelo rústico, rural land where residential properties are prohibited, also called no urbanizable. 

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It could have also been built too near the coast. This is down to the Ley de Costas or Coastal Law, which was brought into force in December 1989 in order to protect the costas from overdevelopment and high rises spoiling the landscape. 

The law defines different areas of the beach and dictates which is public land, owned by the state and which parts can be owned privately and built on.

If you buy or own a house in one of these non-buildable zones, there are many problems you could face down the line, often sooner rather than later. This is because there are several rules you have to abide by concerning works, reforms and extensions. In some cases, they may not be allowed at all and everything must be approved first by the local government by providing a detailed project.

Because of coastal erosion, this issue is getting worse as some shoreside homes that were once built outside of these areas are finding that they’re now illegal.

READ ALSO: 

The house may have also had extensions made to it that were built without a license, meaning that the extra parts are illegal.

Q: How do I know if my home is legal or not?

A: Unfortunately it can be difficult to know if your property is legal or not. You could have bought and signed for it with a notary and it could be inscribed on the Property Registry, but this still doesn’t mean it was built to the correct specification and on the right land.

The only way to truly tell is to find out if your home ever had a Licencia de Primera Ocupación or First Occupation license, also referred to as a Cédula de Habitabilidad or Certificate of Habitability. This means that according to the authorities, it is suitable to live in and has the correct licenses.

READ ALSO: How to get Spain’s certificate of liveability for properties

Q: What happens if my property doesn’t have a habitability certificate?

A: If your property has never had a Certificate of Habitability, you must regularise the legal situation. First you’ll need to start a legalisation file (expediente de legalización) and contact the town hall. Depending on the seriousness of the case (ie. where exactly it was built, if there’s any structural danger, whether the entire property is illegal or just an extension) the cost of making an illegal property legal can be considerable. As such, each case must be studied individually with the help of an expert to determine whether it is even feasible or worth the investment.

The next step is to bring in an architect and check whether the property complies with all the building regulations. If it does, you simply need present the expediente de legalización to your local town hall, who will confirm whether or not the property adheres to building regulations and can be made legal.

If it doesn’t, you’ll need to consider whether it will comply with the regulations after some renovations. If that’s the case, you’ll need to draw up a renovations project document (proyecto de reforma) outlining the proposed changes and how they will adhere to building regulations. It must be presented to the town hall along with your expediente de legalización.

According to law firm Acal, the legalisation process can be broken down into steps as follows:

  • Contact the town hall.
  • Begin with the expediente de legalización when the town hall confirm whether or not the property can be made legal.
  • Pay the corresponding fees and taxes (in this case it will be IBI) depending on your municipality and region.
  • If you need to make renovations, obtain the proyecto de reforma and hire an architect.
  • Obtain a building permit from the town hall.
  • Once completed, register the property in the Land Registry.

READ ALSO: What is Spain’s IBI tax and how do I pay it?

Q: Do I really need to make my property legal?

A: Yes, because it will benefit you in the long run. It doesn’t matter what the previous owner told you when you were originally buying the property, owning a property that isn’t fully legal (or legal at all) can create problems and even lead to fines worth up to 20 percent of the property’s value in extreme cases.

By going through the legalisation process and making the relevant renovations, if necessary, you gain a legal property for all purposes and with all the benefits that entails.

You will not have problems setting up, paying, or cancelling electricity, water or gas utility services. You won’t have to undertake reforms and renovation work unofficially, avoiding the eyes of the authorities. Instead you’ll be able to register your property in the Land Registry, which will make things much easier when you decide to sell it or pass it on.

In terms of selling it, perhaps that is the biggest benefit of legalising your illegal property: by registering it properly, you will be able to benefit from its full value when selling it. When a property is illegal, the appraised value will probably be no more than 40-45 percent of its real value at best.

The renovations needed to get your property in shape to meet the building regulations could be costly, but will they cost you half of the total value of your property? 

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