Six key differences between buying a property in Spain and in the UK
If you're thinking about buying property in Spain and have previously bought one in the UK, you'll find a few significant differences in the house buying process between the two countries.
In many ways, the house-buying process can actually be easier and shorter in Spain than it is in the UK, however, there are some notable differences you should be aware of before going ahead.
1) You have to pay a deposit in Spain
In the UK, it’s common for house sales to fall through either because the buyer or the seller pulled out of the deal. This can happen right up until the exchange of contracts and after you’ve paid countless solicitor bills.
In Spain, however, you have to pay a deposit known as compraventa in order to safeguard this from happening. This amount can be anywhere from 10 to 20 percent of the property value, depending on what region in Spain you’re buying in. The money doesn’t go straight to the seller, however, it is kept by a legal entity until the final contract is signed.
READ ALSO: Property in Spain -- how and when can you negotiate the price?
If you pull out at any time then the seller gets to walk away with this money. If the seller pulls out then the money gets returned to you, but in addition, they have to pay you the same amount. This scenario can also happen if either you or the seller don’t have the necessary documents ready by the completion date.
2) You’ll pay different property taxes and fees
The property taxes you pay in Spain will be different from those in the UK. In Spain, you can expect to pay between 8 and 11.5 percent in taxes when you buy a house or an apartment. In the UK, according to the government, you pay stamp duty land tax on any property above £250,000.
In the UK you also pay monthly council tax fees, while in Spain, you pay IBI or Impuesto sobre Bienes Inmuebles tax just once a year. Spain gives competitive tax rates for non-residents.
READ ALSO: What is Spain’s IBI tax and how do I pay it?
3) There’s no exclusivity agreement with estate agents in Spain
In Spain, sellers can register with as many different estate agents as they want in order to sell their property.
This can be great for the seller, but can sometimes prove frustrating for the buyer. This is because you’ll often see the same property advertised on several different websites, and they may be advertised at different prices too.
Sometimes you can find out that a property has already been sold because the seller sold it with one estate agent, but forgot to tell the others that it was no longer on the market.
4) You have to go through a notary in Spain
In the UK you’ll hire a solicitor to do the paperwork and property checks when you buy a house.
In Spain, it’s in fact not necessary for you to hire a lawyer at all (although it’s a good idea), but what is necessary is to sign the final contract in front of a notary. This will be the final step in the house-buying process in Spain.
You will meet at the notary's office with the buyer and sign the final contract in front of them, where they will notarise it. You will hand over your cheque to the buyer and they will hand over the keys. The notary will inform you when you can go and pick the deeds up from the notary as soon as they’re ready.
READ ALSO: What’s the difference between a gestor, a lawyer and a notary in Spain?
5) Property surveys are not common
In the UK, it’s typical to hire a property surveyor to carry out structural checks or to point out any other problems with the house that may need to be fixed and could cost you extra money down the line. This is commonly done after your offer has been accepted, but before you sign the contracts.
In Spain, however, surveys are rarely carried out. Even if it’s not commonplace it’s still a good idea if you are in any doubt about the property. Remember, you should do this before handing over the deposit so you can pull out if necessary.
You can also ask to see the ITE (Inspección Técnica de Edificios) certificate or Technical Inspection of Buildings.
This is a certificate that shows that an inspection has been carried out on the building and looks at the safety, as well as issues that may affect the quality of life of the people living in it. It must be carried out on all buildings periodically, depending on how old they are, and must be shown to the buyer before the signing of the contract.
6) There is no address on advertised properties in Spain
In the UK properties are advertised with the street name so that you know exactly where they are and can even go and look at the street before you make an appointment for a house viewing.
In Spain, you often won’t know what street the property is on, only the general area it’s located in. Estate agents are reluctant to share the exact address until an appointment to view it has been made.
This is due to the fact that sellers can register with more than one agent, so sometimes other agents will try and poach clients by knocking on doors and visiting the specific addresses of the sellers.
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In many ways, the house-buying process can actually be easier and shorter in Spain than it is in the UK, however, there are some notable differences you should be aware of before going ahead.
1) You have to pay a deposit in Spain
In the UK, it’s common for house sales to fall through either because the buyer or the seller pulled out of the deal. This can happen right up until the exchange of contracts and after you’ve paid countless solicitor bills.
In Spain, however, you have to pay a deposit known as compraventa in order to safeguard this from happening. This amount can be anywhere from 10 to 20 percent of the property value, depending on what region in Spain you’re buying in. The money doesn’t go straight to the seller, however, it is kept by a legal entity until the final contract is signed.
READ ALSO: Property in Spain -- how and when can you negotiate the price?
If you pull out at any time then the seller gets to walk away with this money. If the seller pulls out then the money gets returned to you, but in addition, they have to pay you the same amount. This scenario can also happen if either you or the seller don’t have the necessary documents ready by the completion date.
2) You’ll pay different property taxes and fees
The property taxes you pay in Spain will be different from those in the UK. In Spain, you can expect to pay between 8 and 11.5 percent in taxes when you buy a house or an apartment. In the UK, according to the government, you pay stamp duty land tax on any property above £250,000.
In the UK you also pay monthly council tax fees, while in Spain, you pay IBI or Impuesto sobre Bienes Inmuebles tax just once a year. Spain gives competitive tax rates for non-residents.
READ ALSO: What is Spain’s IBI tax and how do I pay it?
3) There’s no exclusivity agreement with estate agents in Spain
In Spain, sellers can register with as many different estate agents as they want in order to sell their property.
This can be great for the seller, but can sometimes prove frustrating for the buyer. This is because you’ll often see the same property advertised on several different websites, and they may be advertised at different prices too.
Sometimes you can find out that a property has already been sold because the seller sold it with one estate agent, but forgot to tell the others that it was no longer on the market.
4) You have to go through a notary in Spain
In the UK you’ll hire a solicitor to do the paperwork and property checks when you buy a house.
In Spain, it’s in fact not necessary for you to hire a lawyer at all (although it’s a good idea), but what is necessary is to sign the final contract in front of a notary. This will be the final step in the house-buying process in Spain.
You will meet at the notary's office with the buyer and sign the final contract in front of them, where they will notarise it. You will hand over your cheque to the buyer and they will hand over the keys. The notary will inform you when you can go and pick the deeds up from the notary as soon as they’re ready.
READ ALSO: What’s the difference between a gestor, a lawyer and a notary in Spain?
5) Property surveys are not common
In the UK, it’s typical to hire a property surveyor to carry out structural checks or to point out any other problems with the house that may need to be fixed and could cost you extra money down the line. This is commonly done after your offer has been accepted, but before you sign the contracts.
In Spain, however, surveys are rarely carried out. Even if it’s not commonplace it’s still a good idea if you are in any doubt about the property. Remember, you should do this before handing over the deposit so you can pull out if necessary.
You can also ask to see the ITE (Inspección Técnica de Edificios) certificate or Technical Inspection of Buildings.
This is a certificate that shows that an inspection has been carried out on the building and looks at the safety, as well as issues that may affect the quality of life of the people living in it. It must be carried out on all buildings periodically, depending on how old they are, and must be shown to the buyer before the signing of the contract.
6) There is no address on advertised properties in Spain
In the UK properties are advertised with the street name so that you know exactly where they are and can even go and look at the street before you make an appointment for a house viewing.
In Spain, you often won’t know what street the property is on, only the general area it’s located in. Estate agents are reluctant to share the exact address until an appointment to view it has been made.
This is due to the fact that sellers can register with more than one agent, so sometimes other agents will try and poach clients by knocking on doors and visiting the specific addresses of the sellers.
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