The Top 10 Questions Every foreigner Should Ask When Buying Property in Spain

5 July, 2023 | Alba Tebar

Spain is a country in southwestern Europe that has the potential to attract people from all over the world. Thanks to its rich history, diverse culture, beautiful landscapes, and desirable lifestyle, it has become a perfect spot not only to go on holidays, but to live in. That’s why lots of foreigners who come here to work for a while, quickly fall in love with our land and want to buy a property here.

However, it is not easy to know where to look to buy a second residence when you are a foreigner. It is easy to get lost in all the information you can obtain. For that reason, in Hipotecasplus we want to help you buy a property in Spain, no matter if you want it as a second residence, as a retiree place to live, or as a business strategy. So, out team of mortgage brokers has prepared to you this article with the top 10 questions you should ask as a foreigner in order to obtain the best mortgage and the best house here in Spain. Do not think it twice!

1. Which taxes you need to pay in Spain?

In that context, it is fundamental that you familiarize yourself with the tax obligations associated with owning property in Spain, including property taxes, capital gains taxes, and potential inheritance taxes.

When it comes to buy a flat or a house, you should be familiarized with the property transfer tax. It is a tax imposed to the transfer of property ownership from one party to another. It is typically calculated as a percentage of the property’s purchase price or its assessed value.

So, it will depend on whether the property you are going to buy is new or not. If the property is second-handed, the PTF will be equivalent to 10%. However, if the property is brand new, you’ll need to add an extra 1’5% in terms of registration.

2. What financial options are available?

If you require financing, explore the mortgage options for foreigners and understand the requirements, interest rates, and repayment terms offered by various lenders. There are plenty of different bank entities in Spain, so the question here relies on finding the one that will better fit with your needs and interests.

In Hipotecasplus we are mortgage brokers, so we are used to work hand in hand with the banks and negotiating between them and our customers. So, if you rely on us, we can advertise you with the best lenders you could get, according to your personal needs and interests.

3. How much money will banks lend me for mortgage?

This question is tricky to answer because there are many different banks in Spain, and each of them has different offers and conditions to customers. Anyways, it is true that most of the entities here will give foreigners from 60% to 70% of the price of the property.

These percentages are lower than the ones given to Spanish customers, as bank entities tend to see them as a more solvent source than foreigners.

What’s more, remember that the 60% or 70% of funding is not from the real price of the property you want to obtain, but from the value it has been established.

4. What are the associated costs?

When purchasing a property, it’s essential to consider the associated costs in addition to the property price. Although they can vary depending on the location or other specific circumstances. Anyways, there are some common expenses:

  • Notary fees
  • Property registration fees
  • Taxes
  • Mortgage-related costs

In that sense, it is also recommendable to ask a professional about all their associated costs, because they might be more familiar with the local regulations and can provide more accurate information.

5. How long does it take to buy a house?

Once again, this is a tricky question too. There are many different factors that can affect the process of buying a house, so it is quite impossible to say an exact number.

The truth is that, once you have found your house and have the green light of a bank entity to concede you the mortgage, you can buy the house in just 1 or 2 weeks, depending on the seller and the agency. So, as you might have guessed, the larger part of the process is the checking part; check the registration certification, check the technical conditions of the property, check your working stability, etc. We’re sorry, but there is no a mathematic formula!

6. Can I afford the property?

It is important to double-check your monthly income and compare it with the mortgage price, in order to discover if you will be able to afford the property. Furthermore, be careful with the community charges that might be associated with the property, or the extra taxes!

7. It is better to sell or rent?

The decision to sell or rent a house depends on your individual circumstances and goals. It’s essential to carefully evaluate your financial objectives, market conditions, and your ability and willingness to take on the responsibilities of being a landlord.

In addition, consulting with real estate professionals and financial advisors can provide valuable insights to help you make an informed decision.

8. What are the neighbourhood and amenities like?

It’s crucial to research the neighbourhood and amenities to ensure they align with your preferences and needs. Some of the key aspects to investigate are:

  • Amenities: look into nearby amenities such as grocery stores, shopping centres, restaurants, parks, depending on your personal preferences.
  • Transportation
  • Schools
  • Healthcare facilities
  • Proximity to services
  • Safety

Additionally, it is a good idea to visit the neighbourhood in person to get a feel for the surroundings!

9. What is the legal status of the property?

If you are an expat, it is normal to be lost in terms of legal aspects of the housing market. In that sense, make sure the property you are about to buy has all the necessary permits, licenses, and titles in order. And, if you are not sure about it, verity its legal status with the local authorities and get advice from a local mortgage broker.

10. It is a good idea to hire a mortgage broker?

Finally, this question might be more important than it may seem. When talking about buying houses, it is crucial to master the market, so having the advice of an expert in that field, that perfectly knows the language and the market, will very helpful.

Nevertheless, remember that you might find some real estate agents that are not fully honest. So, only go for those whom you really trust, because those are going to be the ones that will truly help you find your dream house in Spain and will make your future here brighter and happier.

In that sense, remember you can always get in touch with our team of mortgage brokers, with no commitment, and ask Hipotecasplus whatever you might need. ¡We will be more than happy to help you!