Approximately 14% of the value should be added to the price of each property, it consists of:
- Lawyer (service and legal protection)
- Notary
- Entry in land and mortgage registers and in the cadastral
- Rewrite contracts
- Issuance of a bank check
- (In the case of a mortgage, an additional 3%: property valuation, loan calculation, bank commission)
To purchase a property, the buyer must prepare the following:
The duration from signing the reservation agreement to finalizing the transaction can take 2 weeks for cash purchases and up to 3 months for those requiring a mortgage.
Many individuals view purchasing property in Spain as a long-term investment. This perspective is valid, as the Spanish real estate market continues to develop, with a growing number of transactions each year. Demand remains high, and robust development activity keeps supply at a satisfactory level. Although finding lucrative deals has become more challenging since the major crisis, investing in a property in Spain is still an excellent opportunity. Even without substantial personal funds, aspiring buyers can realize their dreams of owning a home in a Mediterranean climate, thanks to loans offered by Spanish banks to foreigners.
Like in Poland, banks in Spain require a down payment (own contribution). The best offers provide financing of up to 70-80% of the property’s value. The final loan terms depend on the bank’s policies and the buyer’s financial credibility.
The process of applying for a mortgage in Spain is similar to that in England. The required documents must be translated into Spanish by a certified translator. Below is a list of necessary documents to present at the bank:
- Income statement for the previous year or current year (e.g., balance sheet or PIT)
- Current certificate of earnings (if employed)
Mortgage rates in Spain vary among banks and are negotiable. Typical interest rates range from 3.5% to 4.5% per annum, with loan terms extending up to 30 years and a maximum age limit of 75 years.
Example: Consider a property valued at €60,000 with a 25-year mortgage.
- Age: 38 years old
- Down Payment: €18,000
- Property Value: €60,000
Financial Breakdown:
- Property Price: €60,000
- Own Contribution: €18,000
- Amount of Credit: €42,000
- Loan Amount with Life Insurance: €46,171.31
- Total Mortgage Costs: €2,369.94 (fees, bank charges)
- Operational Costs: €7,585.10 (legal, notary, administrative)
- Total Loan to be Repaid: €69,342.24
- Monthly Loan Installment: €231.15 (over 300 months)
- Down Payment: €18,000
- Total Initial Costs (Mortgage and Operating): €2,369.94 + €7,585.10 = €9,955.04
- Total Paid at Start: €18,000 + €9,955.04 = €27,955.04
- Monthly Mortgage Installment: €231.15 for 25 years (300 months).
The overall cost of purchasing the property in this scenario is calculated as follows:
- Property Price: €60,000
- Fees: €9,955.04
- Total Loan Repayment: €23,170.93
TOTAL COST: €60,000 + €9,955.04 + €23,170.93 = €93,125.97
When considering property maintenance in Spain, it’s important to understand the costs associated with both apartments and houses. Generally, maintenance costs in Spain tend to be lower than in Poland, although they can vary significantly based on the region and the type of property.
The following are common expenses associated with maintaining a property in Spain:
- Electricity: Approximately €25 – €70 per month.
- Water and Garbage Collection: About €50 – €60 every three months.
- Average costs are around €320 – €650 per year, often paid quarterly or semi-annually.
- Typical fees are: €20 – €60 per month for standard urbanizations with swimming pools. €50 – €200 per month for luxury urbanizations with additional amenities like gardens, spas, gyms, and sports fields.
The I.B.I. amount is determined by the local authority and is typically paid once a year, usually in September or October. The tax amount varies based on the property’s size and location. For example: |
- An apartment of about 50 m² in popular shopping areas on the Costa Blanca incurs an annual tax of approximately €150 – €250. - A house with an area of about 150 m², including a plot, has an annual tax of around €400 – €600. |
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