Buy a house in Spain
Buying a house in Spain
The number of Swedes buying houses in Spain is steadily increasing. The latest available data from 2022 shows that in that year Swedes made up 6.2% of foreign home buyers in Spain. That places Swedes in fourth place after the English (15.3%), Germans (7.1%) and French (6.8%). In the Comunidad Valenciana region, including Torrevieja, Swedes are in second place with 9.8% after the English (16.5%). Buying a home in Spain can be a fun and exciting experience, but it is important that it also feels safe and easy. The process is different from buying a house in Sweden, which is why we at Real Estate by Gardewik are here to help you all the way from start to finish. We have a well-established network of lawyers, banks, insurance companies and currency exchange companies available to assist you. We offer professional help from the first step until everything is ready and you own your home. In addition, we are of course still available to answer questions and offer help even after your purchase.
Preparations
Preparation before buying a house in Spain is important to ensure a smooth process. It's a good idea to have the financing in place before you go down, so you can hit the ground running if you find your dream home.
If you need a loan, it is best to have a loan promise ready. If you want to borrow money in Spain, we at Real Estate by Gardewik can help you with bank contacts. We work with some of the biggest banks here that offer different options. Generally speaking, you can borrow up to 70% of the home's value, but the banks always make an individual assessment. It can take about a month to get a loan promise. You can of course start the loan application process before you plan to go down. Contact us and we will help you. When you find your dream home, we start the buying process together with you. Below is an overview of the steps in the purchase process.
Deposit and reservation contract
To ensure that no one else can buy the same item, the home must be removed from the market. You then pay a down payment that varies, but is normally between €3,000 – €8,000. This is done in our office at the same time as we write a reservation contract.
Lawyer and law
Our next step is to connect you with one of our carefully selected law firms. These professional and recognized agencies are knowledgeable in both Swedish and Spanish and will guide you through the entire legal process of the purchase. It is common to give the lawyer a power of attorney so that they can represent you in all matters. The power of attorney is limited and the lawyers only carry out matters that you approve. We offer a package price with our lawyers where all the costs of the purchase are included, so you don't have to worry about the price being higher than expected. The law firm will represent you in all legal matters relating to the purchase.
This includes, among other things, that:
- Create a power of attorney approved by the Notary Public.
- Open a bank account.
- Obtain a NIE number (which is equivalent to a personal identification number in Spain), which is a requirement when buying property in Spain.
- Check that there are no debts attached to the property.
- Review and ensure that all documents are in order for the residence.
- Establish purchase contracts between buyer and seller.
- Prepare and administer the deed.
- Register the property in the land register.
- Transfer electricity and water contracts to you, as well as manage garbage collection fees (which are usually paid by direct debit).
- Prepare proposals for insurance.
- Take care of all other documents required before the purchase.
- Handle the signing at the notary and collect the bank check from the bank.
We usually say that in addition to the actual purchase price, there is usually a cost of around 13-14% of the housing price, depending on the region. The largest part of this cost consists of a value added tax of 10% (depending on the region) and a stamp duty of approximately 1.5% (only for new production). The rest of the percentage covers lawyer and notary costs as well as connection fees. All parts of the process take place continuously. Together with the seller, a date is set when you go to a notary and sign over the home to you. If you have given your attorney power of attorney, they will take care of this for you. On this occasion, you also get access to the keys and the home officially becomes yours. If you are not there yourself at the signing, we at Real Estate by Gardewik can pick up your keys from the lawyer after your approval and go to the residence to do a review. We will then report back to you. When you then come down to your home, we meet and go through everything with you and hand over the keys. The lawyer will also want to meet with you and go over all the legal documents. It can also be a good time to ask about a declaration and a will.
Operating costs
We are often asked about the costs of maintaining a home in Spain. Of course, it varies depending on the type of home you buy, but it is generally common to have to pay for electricity and water subscriptions, rubbish collection fees and insurance. Since most homes are part of a community, there is also a fee for this, called "Comunidad". In addition, the property tax, IBI, is mandatory and detailed information about this can be found below. It is also important to have a legal entity or law firm that is responsible for ensuring that declarations and other administrative obligations are carried out correctly. In the first year after the purchase, we recommend that you have approximately 2000-3000 euros in your Spanish account, as the current costs are deducted via direct debit at various times during the year.
Property tax
In Spain, you pay a municipal property tax that varies between 0.4-1.1% of the assessed value, and a state property tax of approximately 0.25-0.5% of the assessed value. The municipal property tax is deducted automatically via direct debit every year in September. The government amount is determined according to the declaration that you must submit each year, which normally occurs in the spring. Your solicitor will provide you with more information on this once the purchase is complete. It is important to note that you do not pay any property tax in Sweden for your Spanish residence.