How to Buy Property in Barcelona
A Guide for Foreigners
Barcelona’s a great place to buy property, but proceed with caution. Doing business in a foreign country is not easy. Below is a ten-step guide.
Step 1. Calculate the Property’s Total Cost
A. Paying in Cash: The property’s price + 10% sales tax on the purchase + app. 5.000€ for other fees. As a general rule, add 12% to 14% to the purchase price. The tax is 5% if you’re under 33 and meet other requirements.
B. Paying with a Mortgage. As of July 2019, the mortgage bank must pay all closing costs associated with the mortgage (set-up costs). The bank may charge an opening and other fees. For mortgage questions, we recommend Mortgage Direct: Contact Mortgage Direct Here
Click for details on the total purchase costs.
Step 2. Talk to Banks if you need a Mortage
No sense going any further until you are sure you qualify for a mortgage. You must use a Spanish bank, preferably in the area where you buy. Visit banks, or hire a respected intermediary such as Mortgage Direct. Most banks grant up to 80% of the purchase price to Spanish residents and 60% to non-residents. As of June 2020, interest rates are very reasonable.
Step 3. Calculate your Budget
Once you know what you can borrow, you can make a budget. Place a lower limit for what you would like to spend, and an upper limit as your maximum. Include the tax and closing expenses. Save some money for renovations as buying a flat that needs work can save you money.
Step 4. Create Search Parameters
Draft a Wish List of your buying specifications:
A. Your Budget. Listed prices are normally inflated by up to 15% so consider properties about 15% over your maximum budget.
B. Area. You must visit Barcelona and walk its neighborhoods to see where you, and your family, feel comfortable. See this post for a review of Barcelona’s neighborhoods.
C. Size. Most Barcelona flats are quite small (40-120 square meters). Prices jump once you get above 100 sm. Consider how much space you need now and 10 years from now. As children grow they require more room.
D. Property Features. List what the property must have; you can’t compromise on these. Enter your online search queries accordingly. Then list what it would be nice to have. These would be great, but not necessary. For example:
1) Common Must-Haves. An elevator, a certain number of bedrooms or bathrooms, quiet (flats facing the interior are normally quieter than those facing the street), near a school, near a metro station, in a certain neighborhood, etc.
2) Common Nice-to-Haves. A terrace or patio (large outdoor spaces are hard to find so they’re more expensive), parking, near the beach, good view, in a certain neighborhood, etc. You might have to sacrifice space for one of these.
Step 5. How to Search for Property in Barcelona
A. Online. There are several websites that carry a large variety of properties for sale in and near Barcelona. Most are in English and easy to find through google. Some of the best deals, however, are sold before they go online.
B. Visit agents. Go to the area where you want to buy and visit local real estate agents.
C. Hire our Service. We rarely search online because the best deals are gone before they’re posted. We work with a network of agents and owners who send us their new properties before they’re posted online. See this link for details.
Step 6. Visiting Properties in Barcelona
A. Reluctant buyer. While in the property say nothing positive, look for defects and ask about them. Never express excitement; once the agent knows you’re interested, they won’t negotiate.
B. Don’t negotiate the price. You need more information first. After investigating the property carefully you’ll probably find something negative that you can use to negotiate.
Step 7. Due Diligence
You found the property, but is it safe to buy? Bear in mind, real estate agents in Barcelona have a very limited duty to reveal any defects about the property. You must research its legal condition to identify the true owner, bank liens and zoning laws. And you must inspect its physical condition for damages. Building repairs are expensive and the flat owners have to pay them. Hire an architect if necessary. We can recommend some.
Step 8. NIE and Bank Account
Once you are certain you will buy, you must obtain a Spanish tax number called a NIE. It’s needed to get a mortgage and to sign the deed. See this page for details. You will also need to open a local bank account to pay for the property and taxes.
Step 9. Pre-purchase Contracts
There are normally two:
A. The ‘Reserve’. The agent will show you a form called a ‘reserve’. You write your offer on it and pay a deposit of app. 1% of the purchase price. If the owner accepts, you must buy or you lose the deposit. If they reject, they must return your deposit. Beware: the ‘reserve’ does not reserve the property for you unless it says so. Read it carefully before signing. And some agents charge the buyer, in which case they’ll keep your deposit as their fee even if the owner rejects your offer. See this post for details.
B. The ‘Arras’. You pay a deposit of app. 10% of the purchase price. You must buy or lose it. The seller must sell to you or repay double the deposit. Negotiate the terms with caution as they will be incorporated into the property deed. See this post for details.
Step 10. Signing the Deed
Once all issues are resolved you can sign the deed. It’s done before a Public Notary, a Spanish attorney qualified to supervise the signing of public documents. He does not provide legal advice. Once signed, you exchange the purchase check for the keys and the property is yours. The deed is then filed with the land registry office (Registro).
Call or email if you have any questions. Mark at [email protected] or +34 664 665 365.
Updated: June 7, 2020