Financial plans for buying property in Spain
When buying property in Spain, you will usually find there is more to consider financially than you originally think. So it’s a good idea to spend some time looking at your finances, and carefully planning for every eventuality.
Having decided to buy in Spain, start thinking about your finances and assessing how much you can afford to spend. There are a number of ways that you can do this, from your own savings or through a mortgage for example, making it wise to research these options and assess which is the best one for you in advance.
In addition to the cost of your property, and the costs of the purchase itself, you need to think about how you will pay for maintenance costs after you have moved in, such as your mortgage payments etc.
When thinking about how much you can afford to spend, rather than just thinking of the actual purchase price of the property, it is important not to get caught out by the additional costs that will arise during the process. We refer to these as ‘hidden costs’ in our detailed Spain Buying Guide, given how often these are unexpected by the buyers. These include everything from estate agent’s commission, legal fees, additional taxes, to the cost of transferring your money over to Spain (among others). Altogether these costs can run into the thousands. This highlights the importance of planning for these and set money aside as soon as you can.
In addition to the cost of your property and the costs of the purchase itself, you need to think about how you will pay for maintenance costs after you have bought your Spanish home.
The Spain Buying Guide looks into this in detail, and can guide you through everything you need to consider. Download your guide today.
Financing your property
Knowing how you are going to pay for your property in advance will go a long way to ensuring you are prepared for your purchase. If you are going to purchase with a mortgage, you will need to assess all the different options available, and assess the criteria for this – this will be different for foreign purchasers in Spain, and given how badly Spain were affected by the financial crisis, may be even more stringent. We recommend speaking to a professional advisor about the options available and which are the best ones for you. Speak to a trusted mortgage provider about your financial requirements today.
When relocating permanently to Spain, you will need to be aware of any tax implications based on residential status. After all, you don’t want to end up paying your taxes in both Spain and the UK. There are also HMRC regulations that may be affected by your emigration. As well as taxes on selling your UK home or purchasing your Spanish homes, and inheritance tax. Speak to an expert, who can help you navigate through the jargon and ensure all your taxes are considered. Speak to a trusted IFA about your tax concerns today.
Overseas money transfers
Currency exchange is a critical part of the overseas property buying process. Unfortunately it is something that is often overlooked until the last minute. Every single transfer you make to pay for your property – whether a deposit, estate agent fees, or lump sum for the final purchase – has the potential to cost you more than it should, driving up the cost of your property. A change in the value of the pound against the euro by as little as 1%, which happens on a regular basis, will raise or lower the price of your €150,000 Spanish home by well over £1,000. Don’t just sit back and leave your money at the mercy of fluctuating exchange rates.
Spain Property Guide recommends using trusted currency specialists, Smart Currency Exchange to make your transfers.
To avoid wasting time and money, the team at Spain Property Guide recommends using trusted currency specialists, Smart Currency Exchange. You will be assigned a personal trader who will work with you to devise a bespoke currency strategy that protects your budget from the risks associated with sending money overseas. For example, a Forward Contract secures your exchange rate, on payment of a deposit. This protects you from any adverse fluctuations before you complete. Of course the rate could change in your favour and the property become cheaper, but that is a big risk.
Save money when buying overseas
Get the best foreign exchange rates with Smart Currency Exchange. You can save up to 4% compared to your bank! Whether you are buying a property abroad, making regular payments, sending money overseas or back in to the UK, you want the most cost-effective, safe and easy way to transfer your money. That’s where Smart Currency Exchange can help. As the one of the UK’s fastest-growing currency exchange specialists, we save our clients thousands of pounds every day by offering the best currency exchange rates, along with your own dedicated personal trader.