Whether you’re after a luxury villa with a yacht languishing in the marina and a private infinity pool or a budget buy-to-let apartment in a beach resort to phase in your eventual overseas retirement, you need to be realistic about what you can afford, what the costs are and what house prices are like in Spain.
House prices in Spain at a glance
Spain is the second biggest country in the European Union. Split into provinces that have their own domestic laws, and then locally governed along additional county and municipal lines, each area has something different to offer a Spanish property hunter. The only thing you can guarantee is the sunshine!
Luxury houses in Spain can be found in areas like Ibiza, Moraira, Sotogrande, and Marbella. But foreclosures mean that banks can sell repossessions at reduced prices almost anywhere. Some pockets of undiscovered coast can still offer cheap apartments along the Mediterranean. While brand new villas in urbanisations set back from but still close to the coast offer relocators decent square-footage and excellent facilities at bargain prices. Read more about how to find your perfect location on our blog.
Average international buyer budget
Spanish mortgages have low interest rates but require high deposits for shorter terms – the maximum being about 25 years. Costs can mount up when you factor in securities, repayments, taxes, bank fees and legal costs. Try our budget calculator to see what you can afford.
Costs to include in your budget when buying in Spain
- Deposit. If you are a non-resident than you might need to meet up to 40% of the price of the property if you want a mortgage. If you intend to live in Spain and register there for tax purposes this can drop to 20 – 30%.
- Taxes. There will be a property transfer tax (like VAT) that differs by province; it’s usually 6 – 10% of the purchase price. There is also a stamp duty to pay, which can be 0.5 – 1.5% of the purchase price.
- Bank Fees. You may not need to pay bank fees, it depends on how you finance your house purchase. If you open a Spanish bank account or get a mortgage which needs a valuation, you should factor this in. Both taxes and bank fees can add up to around an extra 10% on top of the cost of the property.
- Legal Costs. In Spain, a public notary has to be present when you sign your contracts, which comes at a small fee. In addition, it’s advisable to get an independent lawyer, possibly one who speaks Spanish or is a translator too, so you know exactly what you’re signing.
- Other Costs. You will be obliged to take out property insurance and may want to add mortgage and life insurance for your own peace of mind. You might want to consider using a mortgage broker. There may be ground rents or maintenance service fees in communal developments and also costs related to the management of leasehold properties.
- Repayments. Most Spanish mortgages last for 25 years, repayments shouldn’t equate to more than 35% of your monthly income.
Factors affecting the affordability of Spanish properties.
There are a number of factors that add or detract value to Spanish properties. Quiet towns can be either cheap or expensive; vibrant cities likewise. It’s largely down to how crowded the area is, what kind of amenities are available and what kind of buyer the area attracts.
Where do you want to spend your time and money? These things will affect your new lifestyle; the culture, infrastructure and politics of each place will be influenced by its inhabitants. For example, regions with high-end restaurants, good schools or expensive leisure clubs – like La Manga Club in Murcia – will drive up house prices.
Do you want to walk to a beach, shops and restaurants or would you prefer to run a family car and live away from the hustle and bustle? In general, the more inland you’re prepared to travel, the better value the properties. Public transport is more reliable in some areas – for example in northern Alicante, where a cheap, regular tram service joins the coastal towns to the inner city stations. Living near an international airport is considered so vital for some that it drives up house prices.
Although people usually move to Spain for warmer weather, different areas have different levels of heat. The southern towns can be almost desert-like in their lack of rain. Running air conditioning units might be essential and will affect your living costs. Electricity rates vary from town to town, so check before you commit to make sure you can afford to live comfortably.
Our Spain Buying Guide recommends that you give careful consideration to what you want from the property, then use our real estate portal to research what that kind of property might cost. Does this fit your budget or do you need to compromise? Sometimes, a visit to Spain to view properties can change your opinion of an area or help you to refine your choices.
With so many different regions to explore, whether you are seeking beaches, outstanding natural beauty, big city-life or or a peaceful village community, you are sure to discover the perfect property and stay on budget!