Common Mistakes When Buying Property in Spain and How to Avoid Them

Spain has been attracting foreigners for years with its picturesque landscapes, sunny climate, and rich culture and cuisine. For many, buying property in this country becomes not just a dream but a real investment – often more affordable than in other parts of Europe. However, for such a transaction to be a success (financially and personally), it is worth knowing the most common mistakes made by buyers and learning how to effectively avoid them.

1. Lack of thorough understanding of the local market

Mistake

One of the most common mistakes is relying on general information about the Spanish market without considering the specifics of a particular region. Costa del Sol, Costa Blanca, the Balearics, or Madrid – each of these areas has its own dynamics of prices, demand, supply, and seasonality.

How to avoid?

1. Thorough research: Check price statistics, market trends, and forecasts for the region you are interested in.
2. Consultation with local experts: Real estate agencies and financial advisors have detailed knowledge about specific areas.
3. On-site visit: Do not rely solely on photos from the Internet. Visiting the area allows you to personally assess the conditions, infrastructure, and atmosphere.

2. Underestimating the total costs of the transaction

Mistake

Focusing only on the sale price can lead to unpleasant surprises when taxes, notary fees, and other costs associated with the purchase are taken into account.

How to avoid?

1. Establish a detailed budget: In addition to the property price, include:
   • Property Transfer Tax (ITP) or VAT (IVA) for new properties.
   • Notary and registration fees.
   • Legal and translation service costs.
   • Potential commission for the agency (though often borne by the seller, it’s worth confirming).
2. Ask about local rates: The amount of taxes and additional costs varies depending on the region of Spain.

3. Overlooking a comprehensive analysis of the property's legal status

Mistake

Buyers often assume that if the offer comes from a reputable agency, the property must be fully legal. Unfortunately, in Spain, there are cases of missing proper building permits, unresolved land ownership issues, or mortgage encumbrances.

How to avoid?

1. Check the land registry (Registro de la Propiedad): Ensure that the property is not encumbered by a mortgage, easement, or other rights of third parties.
2. Request all building documents: If the property is newly built, check whether the developer has a building license (Licencia de Obra) and a habitation license (Licencia de Primera Ocupación).
3. Consult a lawyer: A real estate lawyer or attorney in Spain will verify contracts and ensure that the transaction is safe.

4. Lack of support from a professional lawyer or notary

Mistake

Many buyers forgo the services of a lawyer to reduce transaction costs. However, in Spain, where regulations may differ from those known in Poland, the absence of professional support can expose you to serious risks.

How to avoid?

1. Hire an independent lawyer: Ensure that they do not simultaneously represent the seller or developer.
2. Document verification: The lawyer will check the legal status of the property, draft or review the purchase agreement, and advise on tax matters.
3. Notary: In Spain, the notary is obliged to confirm and formalize the transaction, but does not always conduct a detailed verification of the property's legal status. Therefore, having your own legal advisor is crucial.

5. Unclear financial arrangements with the bank

Mistake

Buying property often involves taking out a mortgage. A common mistake is relying on assumptions and superficial information from the Internet regarding credit possibilities in Spain.

How to avoid?

1. Compare offers from multiple banks: Differences in margins, commissions, or maximum financing levels (LTV) can be significant.
2. Preliminary credit check: Analyze your financial situation with an advisor or directly with the bank to avoid disappointments later on.
3. Pay attention to additional costs: Commissions, life insurance, property insurance – all of these affect the total cost of the loan.

6. Incorrect assessment of the property's technical condition

Mistake

Buyers often focus on the advantages of location, sea views, or architectural charms while neglecting a thorough check of the technical condition of the building or apartment.

How to avoid?

1. Technical inspection (survey): Hire a professional inspector to check electrical, plumbing, ventilation systems, as well as the condition of the roof, foundations, or facade.
2. Request renovation documentation: If the seller claims that the property has been recently renovated, it is worth seeing invoices and project plans.
3. Community plans: In the case of properties in multi-family buildings, ask about planned renovations in common areas (e.g., elevators, roofs, facades). You may soon be burdened with additional costs.

7. Not considering maintenance costs and taxes in the long term

Mistake

Fascinated by the prospect of owning a home in sunny Spain, some buyers forget about ongoing expenses such as local taxes (IBI), community fees, utility bills, or cleaning and maintenance costs.

How to avoid?

1. Annual cost calculation: Determine what the average rates for taxes and fees are in the given location.
2. Financial reserve: It is advisable to have funds set aside for unforeseen expenses, such as an emergency air conditioning repair or flooding.
3. Monitoring regulations: Tax law in Spain can be variable, especially regarding foreigners. It is worth staying updated or consulting a tax advisor.

8. Ignoring formalities related to the tourist rental license

Mistake

Many investors buy properties with the intention of short-term rental, forgetting that in most regions of Spain, regulations require obtaining a tourist license (licencia turística).

How to avoid?

1. Check local regulations: In some regions (e.g., Barcelona), there are limits and strict rules regarding new licenses.
2. Apply for a license: If you plan to rent short-term, find out about the requirements (including safety conditions, equipment) and submit the appropriate application to the relevant office.
3. Consequences of lacking a license: Financial penalties for illegal rentals can be high, reaching tens of thousands of euros.

9. Relying solely on photos and descriptions from the Internet

Mistake

The Internet is a huge convenience, but photos often show the property in the best light, not always revealing all the flaws.

How to avoid?

1. Personal visit: If possible, visit the property in person before finalizing the transaction.
2. Video call or virtual tour: When a trip to Spain is not possible, ask for detailed video recordings or a meeting via real-time video conferencing applications.
3. External opinion: Use the help of a local agent or a friend living in Spain who can verify the property on-site.

10. Lack of a backup plan in case of changing circumstances

Mistake

Life can be unpredictable: personal, professional, or health situations can change suddenly, along with the buyer's needs and financial capabilities.

How to avoid?

1. Flexibility: Consider whether, in case of giving up the apartment in Spain, you will be able to quickly sell the property or rent it out.
2. Exit analysis: If you are buying property as an investment, check how profitability is shaping up and how long it may take to sell in that region.
3. Emergency budget: Have funds set aside for at least a few mortgage payments in case you cannot rent or sell the apartment for a while.

Summary

Buying property in Spain can be an extremely satisfying investment and a way to fulfill dreams of living in a warm climate. However, to ensure that this process goes smoothly without unpleasant surprises, it is important to remember the most common mistakes: from lack of thorough market analysis and legal status of the property, to overlooking maintenance costs or tourist licenses, to forgoing professional legal support.

Key recommendations to help minimize risk:

• Careful research and comparison of offers.
• Consultation with a lawyer, notary, and financial advisor.
• Detailed verification of ownership documents and technical condition.
• Considering all costs (taxes, fees, reserves for repairs).
• Clearly defining goals (own apartment vs. rental investment).

By exercising caution and taking care of every stage of the process, you can be sure that your adventure with Spanish property will yield only positive results. If you need help or advice related to buying property in Spain, contact us – our experts are happy to share their knowledge and experience to facilitate a safe and comfortable transaction.

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