A favourite amongst the British in terms of both tourism and purchasing homes abroad, Spain is a country evocative of mystery, romance and vitality - be sure to check out our guide on buying your dream property here

The country that us Brits love so much. Tens of thousands of us retreat every year to her inviting shores, to soak up some of the ambiance of a Mediterranean life.

Spain’s feisty Latino passion mixed with a relaxed outdoors living really lends well to a nation exuberating vitality. The good life of its rural pastures and the urban chic to its cities ensures no one taste is forgotten.

A healthy ex pat community is welcomed with open arms, but if it is tranquillity and a taste of real Spain you are craving then head inland to rolling hills, vineyards bursting with aroma and quaint rural farm houses just waiting to be discovered.

Spain has an alluring power and once you have sampled her delights, a life anywhere else is simply unquestionable.

•    Country overview
•    Property facts
•    Buying process
•    Area guides

Country overview

Fast facts

Population: 40,491,052 (July 2008 est.)
Capital city: Madrid
Major cities: Madrid, Barcelona, Valencia, Seville, Malaga, Murcia, Las Palmas, Palma de Mallorca, Bilbao
Languages: Spanish
Location: South-western Europe, bordering the Bay of Biscay, Mediterranean Sea, North Atlantic Ocean, and Pyrenees Mountains, southwest of France

Utility costs: It is necessary to pay for all set up costs including, power, water and telecommunications when purchasing in Spain

Economy:
•    Inflation rate (consumer prices): 3.5% (2006 est.)
•    GDP (official exchange rate): $1.081 trillion (2006 est.)
•    GDP (purchasing power parity): $1.07 trillion (2006 est.)
•    GDP (real) growth rate: 3.6% (2006 est.)
•    Foreign Direct Investment (net inflow): -$35.9 billion

The Spanish economy mainly features around a large manufacturing base, to include key industries such as textiles, automobiles, tourism, beverages and metals.

Traditionally, unemployment levels were dangerously high, however this is gradually reducing. A sluggish work ethic, inflexibilities in the labour market and loss of competition in the housing sector are Spain’s current issues.


Property facts
−    Main property markets
−    Ownership and restrictions
−    How safe is my contract
−    Mortgages

Main property markets
Spain’s property market enjoys a healthy number of foreign investors, with Britain being its prime target. The main trade area is Spain’s ‘Costa del Sol’. This is also their prime tourist destination. The region is home to many golf courses, long sandy beaches and towns such as Malaga and the ultra trendy Marbella. Other key investment spots are the Costa Blanca, home to Benidorm (another favourite holidaying spot for many Europeans), Madrid and Barcelona also have very healthy property markets.

Forms of ownership/restrictions
Property can be owned on a freehold basis.

There are two main ways in which you can own property in Spain. Sole and co-ownership. Always be advised however that under co-ownership you not only own the rights to your property but of the undivided real estate. The option to not own a fraction of the whole estate is not possible in Spanish law.

Another option, under co-ownership is to own via a company. This is worth looking into for its added tax benefits.

Timeshare options are also widely available in Spain; however there are a number of unreputable companies which will offer timeshares. Always do thorough checks into any company you choose.

Restrictions
There are no restrictions for foreign nationals to buy in Spain. However there are a number of legal processes that you must become familiar with before buying into the Spanish market.

−    Pre-emption
Certain third parties can sometimes have first refusal on your property, and if this wasn’t given prior to your sell they can evoke this at a later stage.

−    Matrimonial and family law
Always ensure that again under this heading no one has pre-emption

−    Limitations
Land that has been set aside for military use or is environmentally protected.

How safe is it?
Spain has a reputable court system, if somewhat slow. There are issues that foreign buyers should be aware of though.
The infamous Valencia ‘land grab’ system which is currently in the process of a reform was a law introduced in the 90s to ensure there was enough land available for urban development. This was abused by some land developers which resulted in small time land owners losing out.

Marbella had a similar problem where it was revealed that the council planning department had become corrupt resulting in property being built illegally. This is still undergoing court procedures.    

Also, as in Italy vendors sometimes accept offers on their property which are higher then that, which is written in legal documents. This is a tax avoidance scam and can lead to harsh penalties.

Mortgages
The Spanish lending system is well established and fairly competitive. The options available to foreign investors are;

−    Release equity on your UK property
−    Off shore lenders
−    Spanish mortgage in euros.

If you decide on obtaining a mortgage from the UK, do remember that although your house price will remain constant in Euros, the exchange rate will change.

The buying process
The Spanish market is very popular with foreign investors and studies have shown that tens of thousands of Brits have already emigrated there. At one stage it was thought of as an exhausted market, this is far from true.

The turn around between signing and completion can be very quick and can sometimes take literally days. The only downside is Spain’s legal procedures. However, just ensure that prior to making any decisions that you have your homework done. Being familiar with the property market in Spain will reduce any need for concern or unnecessary stress. Always employ a bilingual lawyer who is familiar with both English and Spanish law to look after your own personal interests.

−    Choosing an area
−    Viewings
−    Legal representation
−    The sale
−    Legal matters
−    Total costs

Choosing an area
Spain has an abundance of different houses on the market and this can range from brand new apartments to complete renovation projects deep in the heart of its rural land. The key questions to ask yourself are what you are looking for, what is its purpose and of course price; what are you prepared to pay? This will help determine an area and help filter search results. 

Finding a property in Spain is relatively easy. With technology being as it is, the internet provides a really good place to begin. Always check out local newspapers and magazines to find hidden gems.

It is advisable to use a registered estate agent in Spain (API) and they will be happy to show you around a number of selected properties.

Always keep an open mind too, as when you visit different areas you never know what you will find. This will help you discover where you can get the best deal for your money.

Viewings
Even though the internet provides a very good basis for research there is no substitute for actually going there and getting a feel for an area. Viewings are highly recommended.

First viewings are all about falling in love with a property, second viewings are for going in with your head. It is advisable to take a check list.

Legal representation
Once you have decided on a property, a Spanish notary will handle all the legal avenues. They are non- bias legal professionals who simply register the property, do any checks on the land, property and vendor. They will handle all documentation and ensure all taxes are paid. As they are not acting in the interests of neither the buyer nor vendor it is advisable to employ the talents of a second lawyer who is both bilingual and has knowledge of both English and Spanish law. It is generally uncommon to find a Spanish solicitor who has this knowledge therefore most foreign investor’s use a solicitor from their own country.

The sale
Now that you have found your property, the process can begin. Firstly, it is advisable to get a survey. Although in Spanish law this isn’t compulsory it is, never the less a good idea, especially if you are buying property over ten years old, as younger property is required to have a structural guarantee from the builders. The survey will also allow you to make accurate estimations in regards to renovations. Also if you are acquiring an English mortgage you will legally need to have this completed anyway.
 
In Spain, your lawyer won’t necessarily carry out all checks such as land ownership and land registry records, your surveyor will. This is another very important factor to consider if you are thinking against having one done.

The next process you should complete is obtaining a NIE number. You will need this for any financial dealings and no estate agent will start any procedures until you have this. The number can be obtained from the foreigners department at a national police station.

Negotiating the price is next on the agenda; a small reservation fee is paid to take the property off the market whilst your lawyer carries out the proposed private contract check. It is normal to go in at 5-10% below the asking price. Many Spanish vendors assume foreign buyers are ignorant of the market and therefore ensure you do not fall prey to this.

Once you have both agreed on a price, it is not uncommon for you to sign a reservation agreement. Although this non binding, if you ‘pull out’ you may lose your reservation fee.

The next stage is to get any outstanding legal checks made. This should include
−    No outstanding monies or taxes on the property
−    The vendor actually owns the property
−    The vendor has legal rights to sell the property

You will now be in a position to sign the private purchase contract. This is legally binding. You should ensure the contract is translated so you fully what is that you are signing.

At this point a 10- 15% deposit will be paid, if the buyer walks away, he/she will lose the deposit, if the Vendor pulls out, they will be liable to reimburse the buyer twice the deposit in compensation.

Once all legal paperwork has been completed the sale is near closure. The final step is to sign the public deed at the notary’s office. The vendor, buyer and notary are required to be present at this event. Once signed, the deeds are passed over and the notary will ensure all monies, including taxes and fees are paid.  The property must be registered on the land register, which will be handled by your private lawyer. This will make sure no third party claims can be made.

Taxes
When purchasing a property in Spain the following taxes and charges will be required.

−    Transfer tax (resale properties only).
−    Value added tax (new properties only).
−    Legal document tax (new properties only).
−    Land tax.
−    Notary’s fees.
−    Legal fees.
−    Deed registration fee.
−    Surveyor’s fee (optional).
−    Selling agent’s fees.
−    Utility fees.

Area guide
Costa del Sol
Costa Brava
Costa Dorada
Costa Blanca
North and North West
Madrid

Costa del Sol
Spain’s sunshine coast is by far the most popular tourist destination in Spain. It also leads the way in real estate. Since 2000 prices have rocketed by 25% where as the average for the rest of Spain is just 14.

The long sandy beaches, vibrant resorts and easy access means that there is no shortage of entertainment or visitors.
Marbella plays host to the young and rich, with its chic night scene and designer stores. Whereas Malaga has its attractive Spanish charms, lively restaurants and laid back lifestyle. Travel a little inland, to the hills that surround the cities and be astonished by how the pace of life changes.

Most popular places to buy: Benalmadena - Fuengirola - Torremolinos - Marbella - Mijas - Nerja

Costa Brava
Brava, in Spanish means rugged or wild, and this part of Spain really does have a dramatic beauty. It runs along the north East coast from Barcelona to meet the Pyrenees, which divides the country from France.

In the late 50s, the Spanish government decided that this particular area deserved a development project, as it was thought of as a prime tourist destination for holidaying northern Europeans. This has led to heavy building projects and now most of this area is built up with resorts and hotels. Most of the development took place in coastal towns such as Lloret del Mar, Blanes and L’Estart. However, a few places escaped and retained their independence- so it is still possible to buy a piece of ‘real’ Spain.

The Costa Brava has always been a firm favourite for foreigners wanting to buy second homes and areas such as Baix Emporda, with its craggy coastline, beautiful harbours and tiny coves, or Alt Emporda, with its towns made up of small canals, roses and world famous fine sands are extremely popular choices.

Costa Dorada
This region of Spain spans from Barcelona south along the west coast. It acquired its name from the vast number of golden sand beaches. This is what sets it apart from its northern neighbour, the Costa Brava, it is less rugged favouring miles of flat coastline and inland, vineyards dominate almost every view.

Arriving in the Costa Dorada is extremely easy with dozens of low cost airlines flying into Barcelona’s 2 airports daily. Excellent train routes connect to the rest of Spain also, making exploring hassle free.

The diverse personalities to the towns and cities in this area allows everyone a little taster of Spain, be it vibrant cities or relaxed fishing towns, historic rural villages or vast vineyards bursting with fragrant grapes just ready to be picked and turned into their world famous red wines.

Property prices vary greatly, but a bargain can be caught by just heading a little way in from the crowds.
Other cities and towns-Barcelona, Reus, Salou, Cambrils, La Cava, Tarragona, Tortosa.

Costa Blanca
The Costa Blanca fits snugly between the Costa Brava and the Costa del Sol on the south east coast. Miles of Mediterranean coastline makes this spot a firm favourite with tourists. It is home to the hugely popular resort of Benidorm which welcomes some 5 million foreign visitors every year. If it is, however, not in your preference to be partying every night then there are still some very charming fishing villages and rural towns left to be explored.
Other cities and towns- Alicante, Torrevieja, Benidorm, Cartagena

North and North West
For a piece of a more deserted Spain, head to the relatively forgotten North and North East. With its charming fishing villages and rural pace of life, this area is rare gem in a country dominated by tourists.

Here, you can find the absolutely stunning town of La Coruna, which in recent years has become a popular docking port for Cruise ships. The old town has all the charms of traditional Spain and the airport provides regular flights back into Heathrow.

House are very fairly priced here favouring rustic farm houses in land and beachside apartments along the coast.
Other Cities and Towns- Vigo, La Coruna, Bilbao, Leon

Madrid
The mighty Spanish capital. A city full tenacity, Latin Spirit in a mix of sophisticated senoritas who know how to live life to its fullest.

The city has so much to offer all year round. The abundance of art galleries, museums, sporting venues, shops, cafes, live music spots, night clubs, the list is honestly endless. 

As with most cities, property can be expensive but head out into the suburbs and the prices come down a little.