Moving to Spain Guide – Chapter 9 – Preparation
Contents
Affordability
Buying versus renting
Professional Advice
FIVE important Steps to take BEFORE you buy property in Spain
John’s story – the rain in Spain falls mainly in Santiago de Compostela!
When the children were young, we always holidayed in Spain as the resorts of the south coast were readily accessible from our native Scotland. When the children became too old to holiday with boring parents, I began to explore inland Spain and I spent many hours walking in the foothills of Andalucia. Then I discovered Sevilla. I think it is a beautiful city where the architecture reflects its rich and varied history. I started going there in the summer holidays. One of my hobbies is that I’m a church organist and I was asked to play in a church right in the heart of the Barrio Santa Cruz in the very centre of town. It was then my fantasy blossomed. I would retire, live in Seville, play the organ and sip chilled sherry in one of the orange groves with my friends! So I thought.
At this time, I was living and working in London. I began to hate the daily commute to my office on the underground where passengers were packed in like sardines. To cope with it I often indulged in my Spanish fantasy, day dreaming about when I would have enough money to sell up and buy a villa in the Spanish sun. I’d spent much of my youth tramping the Scottish hills and so when I heard about the Camino de Santiago – the great pilgrimage trail to Santiago de Compostela in Northwest Spain I decided that this would be a Spanish adventure to herald my retirement to Seville. I set off from Seville to walk to Santiago on 2 January 2007. The journey took 36 days. During that time, I walked through tiny villages that I’d never heard of. I explored the historic cities of Caceres and Salamanca. I saw another Spain which I didn’t know existed. I had little Spanish at that time and I wrote out words and phrases in a notebook and showed them to people when I wanted to ask, ‘Do you have a room?’ or ‘Is there food available?’. I discovered that as soon as I tried to communicate local people responded with patience and kindness. I resolved to learn Spanish as soon as I could.
Then I reached Santiago de Compostela. The city is over 1000 years old and what we see now in the ‘Old Town’ was developed in the middle ages and has been largely preserved ever since. The town is small with less than 100,000 residents but it boasts a famous University and is the third most visited Christian pilgrimage destination alongside Rome and Jerusalem. I was attracted to its stone buildings and arches which shone in the summer sun, but it was the open-hearted Galician people who made me change my mind. I decided I would come to live in Santiago de Compostela. And so I did.
At that time there was a dip in the housing market in London and I considered that it was wise to wait before selling my home there. ‘Try before you buy’ was the best advice I received and so I decided to rent out my house in the UK and rent a place in Santiago at first. Researching the housing market in Spain I discovered that re-selling houses can take a very long time and partly for this reason the rental market is very buoyant. I was pleasantly surprised to discover that the rent I would pay in Spain for a bigger house than I had in London was considerably less than the rental income I could expect from the London property. Whilst I loved living in Santiago with the buzz of pilgrims and students thronging in the streets, I also discovered it can rain at any time, and often does. Prodigiously. Those first winters weren’t as cold as in Scotland but they were much wetter. Literally my first January it rained every single day of that month.
That was 15 years ago. I decided to try to have the best of both worlds. I decided not to sell up in the UK in order to buy in Spain. My property there has increased in value and has been rented out continuously. I have a long-term lease on my house in Santiago seven minutes’ walk from the Cathedral in the heart of the medieval city. In the winter I now go South, renting in the warmer and drier climes of Andalucia. This model might not be for everyone, but it certainly works for me, as I prefer the flexibility and independence it gives me, as well as maintaining a foothold in the UK housing market.
John Rafferty, former President of Age in Spain
Affordability
1.Review the checklist you prepared of the features you are looking for in your new home and community.
If you have an idea of where you’d like to move to then start to research as much as you can about that area and plan a number of visits there. When there, seek out other English speakers and ask them about the area, the services, the hospitals, the community life, the schools. They will also be able to give you an idea of the cost of living in the area – many immigrants are only too happy to compare the cost of living in different places. Social Media can also be a great place to ask questions, perhaps phrased like “how much income would a family of four need to live comfortably in a rented apartment in the city”
2. Understand the cost of housing
During your visits check out prices of commodities and utilities. Once you know which area you are attracted to start browsing the house listings such as:
where you will see purchase prices and rental costs.
3. Draw up a budget comparing your income to your likely expenditure in Spain.
Assess if you will you have enough money to live. Consider potential changes in your circumstances after you have moved. For example as your children get older, if your health were to deteriorate, if the currency exchange rate were to suddenly drop.
Consider how future proof your preferred location is. A finca in the hills might be a dream now, but will it still be suitable in five or ten years time? Are you willing to move again should your needs change? Important things for example, if you were to break a hip, how would you access medical centres or be able to buy groceries (supermarkets often do not deliver to remote areas).
Buying or renting in Spain
See this excellent guide prepared for UK nationals but also useful to others:
Before committing to a purchase, if possible you might consider renting first. Living in your chosen area for a while gives you a feel for the neighbourhood, local services, and daily life — things no brochure or viewing can fully capture.
Renting offers flexibility. If your circumstances change or the area isn’t quite what you imagined, moving on is simple. Buying, on the other hand, gives you the freedom to shape your home to your taste — but selling later can be slow, especially in quieter or oversupplied areas.
Take your time. Spain isn’t going anywhere.
Always seek professional advice
We can’t emphasise enough that whether you are buying a property or trying to understand a rental contract it is important that you seek professional advice.
In response to the needs of many people who have asked for information Age in Spain has compiled a list of trusted partners who also support our work. We also have a guide to professional services in the fields of:
- legal services
- official translations
- money exchange
- funeral plans
- inmobilerias
- health insurance
- medical certificates (part of the visa application process)
- tax
Buying property in Spain
FIVE important Steps to take BEFORE you buy property in Spain by Claudia Font, Partner, Solicitor and Spanish Lawyer
You might be quite certain about what kind of property you want to buy, whether it is a seaside place in one of the Spanish islands, or a cottage in the Pyrenees. You will also have a clear idea on how much you would like to spend on it.
But it is likely that you are not very familiar with how the conveyancing will work in Spain, or you assume that it will work similarly to conveyancing in your coutry of origin (for the purposes of this example we will assume you are moving from the UK)… but things might end up getting more complicated than you had imagined.
Many clients contact us when they have found ‘the’ property in the sun, the one they really want for them or for their family. This might seem a sensible way to proceed, but we will explain here why it is more than advisable to engage a Spanish Lawyer at an earlier stage.
So, when is the right time to start talking to a Spanish Lawyer? The answer is, AFTER you have made the decision to buy property in Spain, but BEFORE you have found ‘the’ place you want to buy. In other words, as soon as you contact an estate agent with your wish-list, you should contact your Spanish Lawyer too.
Why?
Because this will help you to move things forward much more quickly when you find the property you love, without the risk of losing it because you do not have the necessary documents in place.
Some clients contact us even after having signed a reservation agreement, thinking that this way they have secured a property. But quite the opposite, this might increase the risk of losing it. In many cases, even if a reservation fee is paid and a reservation document is signed with an estate agent, the property might not be taken off the market until a private contract is signed, and it is quite common that the property is reserved for a few days only. Thus, buyers may end up rushing to sign a private contract without obtaining the proper due diligence on the property, and more importantly, committing themselves to deadlines for completion that might not be feasible because they do not have the necessary paperwork in place. The risk of breaching the contract and losing the deposit i.e., 10% of the price, increases.
Whereas if you look at certain steps BEFORE you find the property, you will certainly be in a better position to make an offer knowing that you are ready to move things forward.
What should be done beforehand? Here are the most important 5 Steps
Step 1 – Choose the right Solicitor
Decide whether you want to engage a local Spanish lawyer, or a dual-qualified lawyer, registered in the UK, if you are moving from the UK. Both options are perfectly possible but make sure they are independent. Many estate agents will offer you engagement with their in-house advisors or will recommend lawyers they normally work with. We would recommend engaging someone independent, free to tell you if the property you want to buy has any defects or problems you should be aware of.
The admin process of engaging a Solicitor can take two or three days. Should you contact the Solicitor only once you have signed a reservation agreement that gives you, perhaps, one week to exchange contracts. By the time a file is opened in your name and you have put deposited funds to allow the firm to start carrying out the necessary searches, the reservation might be close to expiring. Instead, when you have found a lawyer, ask them to open a file and be ready to start as soon as you give them the green light.
Step 2 – Be informed about taxes and costs involved
You will most certainly have a budget in mind for your investment in Spain. But on top of the price, you will
have to pay Taxes, Notary fees, Land Registry fees and legal fees. Having a clear breakdown of how much you should add on top of the price BEFORE making an offer is a sensible thing to do.
Step 3 – Obtain a NIE number
In order to buy property in Spain, you need to have a NIE (Spanish Tax number). Without it you will not be able to complete, nor pay taxes. You will not be able to register the property in your name until you have a NIE. Obtaining a NIE can take between two and six weeks. Therefore, committing yourself to deadlines for purchasing a property before having a NIE in place is quite risky.
NIEs for British citizens can be obtained both in the UK and in Spain. Your legal advisor will be able to tell you what is better, and more importantly, what is quicker in each case.
Step 4 Open a bank account in Spain
As soon as you find the property you like and the due diligence carried out on it is positive, you will certainly want to secure it by paying a 10% deposit (what in Spanish is called ‘arras’). You can transfer the deposit from your UK bank account – again, using the UK as an example – but at the time of completion, unless the seller is also a UK citizen and is happy to accept the price in Sterling, you will need a bank account in Spain with the money ready for completion.
Should you need a mortgage, you will also need a Spanish bank account. Some Spanish banks accept opening bank accounts for non-residents in Spain from abroad, but some others require you to sign the opening of the account in Spain, personally or through an attorney. Again, this can take some time.
Helen from West Yorkshire in the UK lives in Catalonia and she talks about the experience of opening a bank account.
“Opening the bank account was relatively straightforward. They needed my passport and NIE number and a Padrón Certificate that was less than three months old. They also asked where the money I would deposit was coming from and enquired if there would be regular deposits, such as from a UK pension. What shocked me a bit was, unlike the UK, some banks charge even just to have a bank account. Now there are many more options for free banking, including online banks, but you still need to shop around. Be prepared.”
If you are in receipt of a state pension then some banks will provide you with free banking. Others will ask you to buy one of their products (investments or insurance for example) in return for free banking. As Helen suggested, shop around before deciding on the right bank for you.
Step 5 Sign a Power of Attorney
It is advisable that you sign a POA appointing your Solicitor and their team in Spain to be able to act on your behalf to complete the transaction whenever necessary. The date for completion might not be convenient for you and you might not want to travel to Spain for the bureaucracy and would rather ask your legal representatives to sign on your behalf in Spain. Furthermore, the POA will allow them to obtain your NIE and to open a bank account for you.
Ready - Get Set - Go!
You are now in a good position to make an offer and to take the transaction forward with much more chances of succeeding ahead of other potential buyers.
Whilst this deals with buying property, the advice is the same when considering signing a contract written in Spanish.
Seek professional Advice
You may decide to engage a Gestor to help you. A gestor (or gestoría) is a private professional agent who specialises in dealing with Spanish administrative bureaucracy on behalf of a client. They provide services on a wide variety of bureaucratic procedures (e.g., tax, accountancy, vehicle registrations, residency and nationality applications etc.), and although there is often no equivalent to this role in many other countries, instructing a gestor is common practice in Spain. It should be noted that a gestor is not a qualified lawyer, therefore if you are seeking legal advice, seek a qualified lawyer (Abogado).
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