Investing in a Holiday Home in Spain

Written by Karen Bryan

property-imageInvesting in a holiday home is something a lot of people dream of but many dismiss the idea of buying a bolthole abroad because the idea seems too complex. However, with Spain being among the most popular places to buy a holiday home, read on to find out if the holiday home buying process is really as complex as it seems.

Do Your Research

With sales up by 84% in Spain, it would seem that everyone is investing in property abroad, however, buying a holiday home isn’t something to rush in to. Never buy the first property you see and shop around to make sure you are getting the best investment for your money. Before you start viewing potential properties you will need to apply for a NIE (an identification and tax number). You will need this number to open a Spanish bank account and take out a mortgage so it is advisable to do this first step as early as possible.

Do Your Sums

There are many financial factors to take into account when buying a holiday home in Spain. One of these financial aspects is the effect the exchange rate can have on the overall cost. Initial costs include the price of the property plus a transfer tax that currently stands at 7% for a new property. When you buy a Spanish property, the estate agent fee is included but don’t forget to consider solicitor and mortgage fees, taxes and insurance costs. All of these costs can add up and leave you with up to an extra 10% to pay. Set your budget before you start looking for a property and take into account legal fees and currency rate fluctuations.

Build A Support System

Purchasing a holiday home isn’t without its own set of complications so it is important that you have a great team on your side. The legalities of buying a property in Spain differ from that of the UK. Hire an English speaking lawyer that specialises in Spanish land law (urbanismo) who can translate all of the Spanish documents that will no doubt be coming your way. A good lawyer will know the local Spanish property laws so make sure you have a lawyer present before you sign any legally binding documents. When taking out a mortgage on a Spanish property, always check that the lender you deal with is a member of the Bank of Spain.

Start Your Property Search

Once you have decided that you are eligible to buy a property in Spain and have your finances in check, it is time to start the search for that dream property. Start by homing in on a particular area that you wish to live in as location is everything. If you are planning to rent the property out, it is wise to take into account your target audience. Know the factors that make a holiday home appealing and make sure the property you buy ticks every box. If you want to successfully rent out your property, avoid properties located too far off the beaten track and ensure that it is located no more than an hour away from the nearest airport.

Buying a holiday home in Spain is not only a great investment; it provides you with the opportunity to rent the property out when you aren’t using it. With the property market picking up the pace, there is no better time to invest in a holiday home in Spain.