Questions and Answers

pain Advisors helps non-Spaniards locate and purchase property in the Barcelona area. Below are common questions about the process.

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TABLE OF CONTENTS

1. Is 2024 a good time to buy property in Barcelona?

Yes. Demand for housing in Barcelona is high and supply limited. Since 2023, prices have gone up all over town, especially in the higher-demand areas of Eixample, Gracia, and Poble Nou. If you’re thinking about buying, there’s no need to wait; it’s highly unlikely that prices will drop or even stop increasing. You can find better deals in the lower-demand areas of Horta-Guinardo, Clot, and Sants. Further, interest rates are pretty good: app. 3.3% to 5% on a 30-year mortgage and rents are surging.

Price Growth. Compared to other major European cities, prices in Barcelona are pretty good; they’re about the same as in Madrid and Milan, and below Paris, Amsterdam, Berlin, Rome, and London. The Calatan independence movement barely affected prices.

2. How much do I need in savings to buy in Barcelona?

If you’re a Spanish tax resident, you need about 33% of the purchase price in cash. If you’re a non-tax resident you need about 50% of it in cash. A tax resident can borrow from 80 to 90% of the price, while a non-tax resident is normally capped at 60 to 70%. See below for a definition of Spanish resident. Below is the math for a flat that costs 200k€.

Tax-resident. The property costs 200k€ – 160k€ paid by mortgage (80%) = 40k€. So you need 40k€ for the flat + the 10% *conveyance tax (20k€) + 7k€ (**closing fees) = 67k€. So you need 67k€ in savings or about 33% of the price (200k€).
Non tax-resident. The property costs 200k€ – 120k€ paid by mortgage (60%) = 80k€. So you need 80k€ for the flat + 10% tax (20k€) + 7k€ (closing fees) = 107k€. So you need 107k€ in savings or about 53% of the price (200k€).

*There’s a 10% tax on the purchase price. It’s 5% if you’re 32 or younger and meet other requirements.
**This is an estimate of the notary fees, deed registration, and legal assistance.

Spanish Tax Resident Defined. A Spanish tax resident files an annual income tax return in Spain declaring their worldwide income and pays the income tax. Spanish law compels you to be a Spanish resident if:

You live in Spain for 183 days or more per year.
You live in Spain for less than 183 days, but your ‘principal’ residence is in Spain. This means you can’t prove you live and pay taxes somewhere else.
You earn most of your annual income in Spain.
Your spouse and/or a minor child live in Spain; this raises a presumption that you live here too. You can rebut this with evidence that you live and pay taxes elsewhere. However, if your spouse is a legal resident of Spain, you might be forced to pay taxes in Spain anyway (good luck).

3. How do I know if the price I see online is fair?

You don’t. There is no public data of recently sold properties and no standard or ‘market’ price; each apartment and house is too unique. The price you see depends on a variety of factors: the street, the neighborhood, the size, condition, layout, noise, light, etc. As a result, sellers and their agent just pick a price and hope for the best. We judge the listed price by comparing it to what a previous client paid for a similar apartment and to what’s on the market now. Then we have to see it and use the factors above. There are online services that provide information but in my experience they don’t carry much weight.

4. Why should I hire a Buyer’s Agent?

For independent advice and guidance through the process. The seller pays the real estate agent a % of the property’s price and they form a close relationship. Obviously the agent wants to make the seller happy and maximize the sale’s price. So you should have an agent across the table negotiating for you. Having someone with experience doing this for you could save you money.

Further, you buy ‘as is’ and, with very few exceptions, the agent does NOT have to disclose any negative information about the property. Thus, the buyer must thoroughly examine the property’s documents to be sure it’s safe to buy and hire an architect to inspect for property damage and structural defects. We can recommend some.

Finally, non-Spaniards are out of their comfort zone and at a disadvantage when buying property in Spain. First, there’s a language barrier and, second the laws governing real estate transactions are quite lax compared to other countries. You need to know what’s going on at all times to avoid confusion and/or being taken advantage of.

5. What’s the best way to find an affordable flat?

Study the websites like Idealista daily, or go into agency offices in the area where you want to buy and see if they have any unlisted properties. Some of the best deals never make it online. They can also advise you about buying in the area. We offer a search service where we contact agents and developers to see if they have anything that matches your criteria and send you properties we uncover. Then we vist them with you and alone with you on video.

6. Where can I find an affordable flat?

Avoid the areas where there is high international demand such as the neighborhoods of Eixample, Gracia and Poble Nou. Once you are off the grid pattern prices drop substantially such as in Clot, Sants, Horta-Guinardo and Badalona. The further out you go the less expensive it is. Second, consider buying a flat that needs work. You can save a lot of money buying cheap and fixing it up yourself. Renovated flats carry the builder’s profit.

7. Who pays the real estate agent?

It depends. Normally the seller pays them a % of the sale’s price. However, some agents, such as Tecnocasa, charge the buyer 3% of the sale’s price + 21% VAT on the 3%. It’s a lot and can be a deal killer. I try to negotiate it down, but with little luck. Be aware: The agent’s fee is NOT included in the property’s price. You have to ask for it on the phone before you schedule the visit.

8. How much of a mortgage can I get?

A Spanish resident can get up to 80% of the purchase price or the assessed value, while a non-resident is generally capped at 60%. For mortgage purposes, a Spanish resident has a resident NIE and files an annual tax return in Spain (or is exempt from doing so).

9. What’s the best way to find a mortgage?

First, if you have one, talk to the bank where you have an account already and see what they offer. Then compare it with other banks. We can send you some recommendations. The bank will want to make sure you’re serious about buying so show them some links to flats that you like. Beware, mortgages can be complicated here as the interest rate offered is contingent on you buying the bank’s health, life and/or home insurance. And there are hidden costs. I can recommend Mortgage Direct, an intermediate who specializes in mortgages. They can explain the process and shop around for a good rate. There’s no need visiting flats until you’re sure you can get a mortgage.

10. Should I transfer money from my home country?

Understand the tax consequences first. If you send a lot of money into Spain, you might have to explain where it came from and pay taxes on it in Spain. Always talk to a Spanish tax attorney (abogado fiscal) before you make the transfer. I can recommend one. And never transfer bank to bank; you’ll get a terrible exchange rate. Use an exchange broker to save money. I recommend Currency Direct as they’re secure and specialize in large transfers.