Having a second home in Spain is becoming a must for Britons in search of a place in the sun. The Spanish property market is the most buoyant in Europe and in some publications is described as ‘the fastest growing property market in the world’. The Economist reports that house prices in Spain have risen faster in the last 20 years than anywhere in the world.

In some areas of Spain properties have risen on average over 30% per year. Experts predict that the Spanish property market will continue to rise, though perhaps not at the same pace as in recent years, and is still a sound investment for those looking to invest overseas. The introduction of the euro has highlighted the fact that Spanish property compares favourably with housing costs in the rest of Europe.

Do Your Research

Anyone wishing to invest in Spain needs to research thoroughly the opportunities offered. There are many new developments and the choice of where to buy and what to buy is vast. This chapter aims to help you make an informed choice and warn you of some of the pitfalls that you may stumble into, resulting in the dream home turning into a nightmare scenario.

It is vital, when considering investing in Spain, that you bear three things in mind:

• You may not speak the language.
• Spanish law is different.
• All that glisters is not gold.

Why Are People Choosing To Invest In Spain?

Few developments, soaring UK property prices and the launch of low cost airlines mean that owning a Spanish home, once a luxury that only the rich could afford, is now financially within the means of a much wider market. As traditional investment opportunities continue to offer relatively low returns, more and more people are turning to investing in overseas property. This is not only seen as a sound investment but it can be an enriching lifestyle choice too. The rental opportunities that a Spanish property can provide make it an investment that can contribute substantially towards its funding.

Legal And Financial Aspects

Spanish Lawyers

It is advisable to use a Spanish lawyer when purchasing property in Spain, as they will understand the ins and outs of buying in Spain, perhaps more so than a British solicitor who speaks Spanish! It is important that you get sound legal advice before you commit to any purchase. Advise your lawyer that you will require that the contract to be translated into your own language.

How Much Are My Legal Expenses Likely To Be?

Estimate to pay about 1 % of the value of the transaction. Make sure that you have agreed the costs before you instruct your lawyer. Other costs you may be responsible for will be:

• opening of a Spanish bank account.
• preparation of Spanish identification numbers
• financial advice (both in home country and arrival in Spain)
• arranging a Spanish will
• house contents and building insurance (includes premium payment)
• connection of water and electricity (includes connection fee)
• fiscal representation
• assistance when signing the title deed.

Why Do I Need A Spanish Bank Account And A Fiscal Representative?

You will need a Spanish bank account in order to pay your electricity and water charges by direct debit. A fiscal representative will make payments of your rates at the town hall on your behalf and make sure that your annual property tax is paid.

Do I Have To Pay For My Spanish Property In Euros?

You can pay for your property in euros, with a cheque through a Spanish bank account. You can also pay by cheque in a foreign currency. You can also pay by direct transfer from your foreign bank to the vendor’s foreign bank.

Can I Get A Spanish Mortgage?

Mortgages of 100% for periods of 20 and 30 years are now available in Spain. If you are a non-resident purchaser, however, the maximum you will be allowed to borrow will probably be 70% of the property’s value. Spanish bank mortgages are currently amongst the lowest in Europe, with rates being offered at less than 5%.