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Escape the Rat Race and Live the Spanish Dream: Your Guide to Buying Property as a Digital Nomad
28 Plays7 months ago
Are you a digital nomad longing for a sun-drenched lifestyle? Imagine working remotely from your own Spanish villa or stylish city apartment. In this episode, we explore the ins and outs of buying property in Spain, specifically tailored for location-independent professionals.
We break down the entire process, from calculating your realistic budget (spoiler alert: those Spanish taxes can be a surprise!) to navigating the unique world of Spanish estate agents.
Discover:
- The essential steps to securing your dream Spanish property.
- How to avoid common pitfalls and ensure a smooth buying experience.
- Strategies for renting out your property when you're not using it, maximizing your investment.
Whether you're a seasoned remote worker or just starting your digital nomad journey, this episode will equip you with the knowledge and confidence to make your Spanish property dreams a reality.
Tune in and discover how to swap the daily grind for a life of sunshine, siestas, and sangria!
Book links, Amazon US /UK:
https://www.amazon.com/dp/B0DDJSMWBT
https://www.amazon.co.uk/dp/B0DDJSMWBT
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Transcript
Introduction and Book Overview
00:00:00
Speaker
Alright, so you're dreaming of owning a little slice of paradise in Spain. Who isn't? Son. Si. Siestas. Well, today we're diving into a book that promises to equip you with a know-how to turn those Spanish property dreams into a reality. It's called Buying Your Affordable Dream Property in Spain. And it's by Howard Green. Oh, I've heard of him. He's the finance whiz who actually took the plunge himself, right? Exactly. He and his wife finally made the leap after years of dreaming about it. And the best part, he lays out all the financial and practical hurdles in a way that anyone can understand.
00:00:36
Speaker
That's refreshing. So many of these real estate books are all sunshine and sangria glossing over the
Challenges of the Spanish Property Market
00:00:42
Speaker
nitty gritty. Totally. Oh. Green's book is different. He doesn't sugarcoat anything. So what sets the Spanish property market apart? I mean, I'm assuming it's not all smooth sailing. Right. Green highlights just how different it is compared to the UK. He even calls it the Spanish surprise. Okay. Now you've got me intrigued. The spanner surprise. Spill the tea. What's the catch?
00:01:02
Speaker
Well, it's not so much a single catch as it is, well, a few unexpected twists and turns along the way. Ah, the joys of navigating a new system. I bet those surprises play havoc with your budget. You hit the nail on the head. That's exactly what Green emphasizes. Ditch the daydreams and get real about your budget and do it early. Makes sense. I imagine it's easy to get carried away browsing beautiful villas online and losing track of the bottom line. Tell me about it. And those stunning properties, they tend to get snapped up quickly.
00:01:31
Speaker
Ah, a competitive market. I can see where having your finances in order would be crucial. You wouldn't want to miss out on your dream home because you weren't prepared.
Understanding Costs and Legal Assistance
00:01:40
Speaker
Exactly. And that's just the tip of the iceberg when it comes to the Spanish surprise. So unique aspects, you say. It sounds like those Spanish surprises Green keeps hinting at might be more like, well, eye-openers for those of us used to the UK system.
00:01:55
Speaker
He definitely doesn't sugarcoat it. One of the first things that jumps out is how much higher transaction costs can be in Spain compared to what UK buyers are used to. Higher how much? Give us the numbers. Think somewhere between 9% and 15% on top of the purchase price. Whoa, okay, that's not insignificant. What exactly is going into those costs? Break it down for us. Well, you've got your property transfer tax, which can really vary depending on the region. We're typing anywhere from 7% on the low end to a whopping 12% in some areas.
00:02:25
Speaker
Yikes. That alone makes the UK rates seem pretty tame. Right. And then on top of that, you've got your notary fees, land registry costs, and oh, let's not forget about the legal fees. Right. Because you'd be mad to try to navigate all this without a lawyer. Absolutely.
00:02:40
Speaker
Green actually recommends budgeting around 1% of the property price for legal fees. He stresses that having a good lawyer is not the place to cut corners. Definitely not worth the risk. So we're talking about potentially a good chunk of change just to cover those extra costs.
00:02:55
Speaker
No wonder Green emphasizes having your finances sorted before you even think about making an offer. Absolutely. He even has this great tool on his website, the affordability calculator. It takes all those regional differences into account so you can get a really clear picture of what you can afford. That's fantastic.
Financial Preparedness and Market Insights
00:03:12
Speaker
We'll definitely link that in the show notes. But before we move on, I have to ask about another Spanish surprise that caught my eye. That 70% loan to value limit for non-residents. What's the deal with that?
00:03:22
Speaker
Ah yes, that's an important one for potential buyers to be aware of. Unlike in the UK, getting a mortgage for the full purchase price isn't always possible in Spain, especially for non-residents. So you're often looking at needing a larger deposit up front. Exactly. That 70% LTV limit means you might need to have as much as 30% of the purchase price ready to go in cash, plus those additional transaction costs we just talked about.
00:03:46
Speaker
So potentially closer to 40% of the property price in cash before you even factor in things like renovations or furnishings. That's a serious chunk of change. It really highlights how crucial it is to have your finances buttoned up before you let yourself fall in love with those dreamy Spanish villas you see online. You don't want to fall head over heels for a place only to realize it's totally out of reach financially.
00:04:10
Speaker
Speaking of acting fast, Green actually tells a story about almost losing out on a property because they weren't prepared to move quickly enough. It seems like timing is everything in the Spanish property market.
00:04:21
Speaker
Green learned that the hard way. He assumed he could take his time making an offer, you know do the usual back and forth, and the property would still be there. But someone else swooped in. He emphasizes how different agent practices are in Spain, like shared listings and the possibility of under-asking price offers. He even talks about the importance of using things like WhatsApp to communicate quickly. WhatsApp, wow, okay, that's definitely a sign of the times. It sounds like you need to be ready to act decisively in the Spanish property market or risk missing out. Absolutely. And that's where having a trusted expert in your corner can be invaluable. Which brings us to another crucial aspect, Green emphasizes, lawyers. Lawyers, right. This is where it gets real, contracts, negotiations, making sure you're protected. You definitely don't want to be navigating all that on your own, especially in a foreign country.
00:05:09
Speaker
Green couldn't agree more. He's very clear that the one percent fee for a lawyer is money well spent when you think about what's at stake. Peace of mind. Right. Absolutely. yeah But how do you even go about finding a good lawyer in Spain, especially if you're not familiar with the system? Green really encourages people to be proactive. Don't just go with whoever your agent recommends. Remember, there could be a conflict of interest there.
00:05:34
Speaker
Do your own research, talk to other expats, get recommendations, and find someone you feel comfortable with. So you're building a team you trust with you at the center.
Legal Considerations and Procedures
00:05:43
Speaker
Exactly. And speaking of trust, Green also talks about power of attorney. It's something that tends to make people nervous, but it can actually be incredibly useful, especially for overseas buyers. Okay, power of attorney. I can see why that might ring some alarm bells. yeah What does it actually involve and is it really necessary?
00:06:01
Speaker
Basically, it's like giving someone you trust, like your lawyer, the ability to handle certain things on your behalf. This can be super helpful if you're not physically in Spain because it means you're not constantly flying back and forth for every little bit of paperwork or meeting. We can really streamline the whole process. Exactly. But Green is also upfront about the risks. You are handing over a certain amount of control. So it's important to really understand what you're agreeing to and to work with a lawyer you completely trust. Finding that balance between convenience and caution.
00:06:32
Speaker
Exactly. And speaking of caution, Green actually gives some really helpful tips on how to vet potential lawyers. He even includes a link to the Spanish Bar Associations Registry, where you can check a lawyer's credentials just to make sure they're legit. Transparency is key. That's incredibly helpful. It's reassuring to know those resources are out there. Okay, so we've got the legal side of things covered. Green also does a great job of demystifying another important element, the NIE number. What's that all about?
00:07:00
Speaker
Think of it like your fiscal ID number in Spain. You need it for pretty much everything related to buying property, opening a bank account, paying taxes, even connecting utilities. Sounds essential. It is. But the good news is your lawyer can usually help speed up the process of getting one, which is another example of why having that expert guidance is so valuable. Saves you time, hassle, potentially a few headaches.
00:07:24
Speaker
I can imagine. So let's fast forward a bit to the Contrato de Arras. It sounds like this is where things get real in terms of commitment. It is. This is the private purchase contract where you typically put down a 10 percent deposit. And it basically means you're taking the property off the market and agreeing on a fixed completion date. It's a big step and not one to be taken lightly. Definitely not a casual handshake. More like, OK, we're doing this, but with legal weight behind it. Exactly. And Green doesn't shy away from talking about the potential risks here. Like what happens if something goes wrong with the mortgage or you need to pull out for a reason that's not stipulated in the contract? You could lose your deposit.
00:08:01
Speaker
Which is why having that mortgage pre-approval in place is so crucial at this stage. Absolutely. Having your finances sorted and understanding all the ins and outs of your mortgage offer is absolutely essential before you sign anything. Green provides some great advice on how to navigate this whole process and minimize those risks. It's all about being informed and prepared every step of the way.
00:08:25
Speaker
OK, last but not least, let's talk about the completion at the notary public. It sounds like quite a different experience compared to the UK. It's definitely more ceremonial, much more formal. Imagine this. Both the buyer and seller, along with their lawyers and people from the bank, all gathered around a big table in the notary's office.
00:08:43
Speaker
Sounds like someone out of a movie. It's quite the experience. The notary reads through the escritura, which is the final deed, making sure everyone's on the same page. And then the moment everyone's been waiting for, signing the documents, the official transfer of ownership, and of course getting those keys to your very own Spanish property.
Inspiration and Encouragement
00:09:02
Speaker
Such a momentous occasion. Definitely a world away from just swapping contracts in someone's living room. It really is. And Green does a brilliant job of capturing the excitement and importance of that final step, giving you a clear picture of what to expect so you can feel confident and prepared every step of the way.
00:09:18
Speaker
This has been an incredible deep dive into the world of Spanish property. We've covered so much ground, the unique costs, the legal ins and outs, even how to navigate those cultural differences. But what really struck me was Green's final thought in the book. He talks about how he and his wife dreamt of owning a place in Spain for years before they actually took the plunge. It's so true. Often, the biggest obstacle is ourselves, right? Our own fear, uncertainty, or just feeling overwhelmed. And those things can prevent us from going after what we really want.
00:09:48
Speaker
Green's journey, his willingness to share both the highs and the lows, it's like he's created a roadmap for anyone who's ever considered making that Spanish property dream a reality. And it all starts with taking that first step, that leap of faith, turning what if into vamos. And who knows, maybe this time next year, we'll be toasting to your new adventure with a glass of something delicious in your very own Spanish home.