Is there really only four steps to safely buying a property in Spain?

AvailableNow takes a look at these simple steps that will help you negotiate buying a property on the Costa del Sol.

Firstly, when investing in property in Spain, whatever the exchange rate, it is a long term commitment. A property needs to increase in value by 25% to enable the buyer to break-even, as buying costs at approximately 10%, selling costs approximately the same again, plus capital gains tax of 18% all need to be taken into account. Just looking into a crystal ball and hoping that property prices will increase by 5% in the next 5-10 or 15 years – your guess is as good as ours, but buying with a long-term plan in mind is essential.

Secondly, there is no house price transparency in Spain as there is in the UK. The Spanish government hold the data, but just don’t publish it. The risk that the buyer will overpay for a property is clearly a risk, but there are ways to mitigate this risk by doing ones homework.

Three separate agencies publish summaries of the property market, but they are snapshots at best and incomplete at worse. (The Development Agency, The Associate of Notaries and the National Institute of Statistics). For example, the best ‘official’ data for Madrid quotes a single number which represents the price for a single square metre – which is like taking one price that represents properties in both Newcastle and London!

Thirdly, independent research is essential. Narrow down by area, property type and price. Check out Independent appraisal company TINSA. Spend between 10 and 250 Euros and they will appraise the market value of the property you’re interested in. And reading ‘How to buy property overseas’ is essential.

Fourth, only deal with a lawyer who is totally independent of the property and agent. Deal with an agent who can speak your language, they will also find an interpreter if you require one.

Yes the exchange rate is important and as long as you use a specialist provider (not your bank) you’ll get a good rate.Never, ever transact part of the deal in cash. Resist taking this illegal shortcut that reduces the costs by under-declaring the value of the property. This was widespread pre 2008 but has thankfully been in decline since, it can catch up with you and cost you more in the long run and will complicate the CGT calculation and the eventual sale.

Finally, think about when you come to sell your property. Who else would buy it? If the answer is ‘another foreign buyer’ then you reduce the potential number of buyers by 75%. Even though foreign buyers are very active here in Spain, they are overshadowed by Spanish wishing to buy here at home. If your property can appeal to foreign and Spanish alike then you’ll quadruple the likelihood of a quick sale.

So, does the current strength of sterling make this an ideal time for the British to buy property in Spain?

Yes, if you get the basics right, now is the ideal time.