Buying a property in Spain is an exciting process, but also one that needs a great deal of time dedicated to research and preparation. A common misconception made by first-time buyers is that the purchasing process is the same in Spain as in their home country. This can often lead to mistakes that either prolong the purchasing process or cost you more money than necessary. Here are the 5 most common pitfalls when buying a property in Spain, and how to avoid them, so that you can feel confident and fully prepared for your Spanish property journey ahead.
Not having your registrations in place before the buying process
Certain registration requirements are integral to your property process – without these, you will halt your buying process. You need to make sure you the following:
- Your NIE number – required for property purchasing and legal conveyancing
- A Spanish bank account – required to set up a mortgage or/and pay relevant fees
- We highly encourage that you complete your NIE registration early so that you can set up your bank account and start your buying process as soon as possible.
Insufficient property research
By not doing enough research into the property you would like to buy, you may risk encountering unexpected costs or additional parts of the process. You need to answer important questions such as:
- Has the house been built legally?
- Does it need any renovation work?
- Does it have building licenses to do any modifications?
- Are there any restrictions on modifications?
- Are there already any urban planning records on the property?
- Is it necessary to obtain a SWOT analysis?
- It is best to get an architect to answer these property questions and obtain the certifications you will need, as well as any relevant reports from the city hall or local authority.
Not accounting for all of the costs involved in buying a house
Buying a property in Spain can become a complicated process if you are not familiar with the exact costs that are involved. The types of tax and the amounts you pay depend on the type of property you wish to purchase (usually VAT and Stamp Duty). Additional costs include notary fees, land registry fees and legal fees, among others.
Not understanding your contract(s)
Buying a property is a considerable investment, so you need to make sure that when you sign contracts, you know exactly what they mean. By misunderstanding a contract, you could risk encountering serious consequences. The most effective way to ensure this is by hiring a lawyer who can help with the entire purchasing process, from NIE acquisition to conveyancing. You should also try to choose a different lawyer to the seller of the property, guaranteeing that they have your best interests in mind.
No preparation for future fees
Remember, the purchasing of a property does not mark the end of the process. You still need to budget for on going costs, such as your mortgage, home insurance, utility bills, and various taxes such as non-resident tax, property tax (IBI). Spain’s utility costs are one of the highest in the EU, so it is essential to take this into account when budgeting your monthly outgoings.