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How to buy a property in Arcos de la Frontera

Don't be left scratching your head

You're thinking about buying a property in Arcos. But how does that work? Is it easy or tricky?

You've heard the horror stories about Brits who pour their life savings into a Spanish property only to lose the lot because their approach is all wrong. Read this article on the BBC's website. If you think: "But that won't happen to me", don't be so sure. When you are buying a property in Spain, what seemed like a nice adventure at first can quickly turn into a nightmare, especially if you don't speak Spanish.

Don't make the same mistakes that so many British buyers have! Don't be naive and uninformed. You don't need to be. Buying a property in Spain is not like buying a property in the UK, but nor is it mega complicated!

First things first. Take your time

Don't let yourself be rushed by anyone who tries to tell you that the property you are interested in is already 'under offer' or that there's an 'imminent price rise' on the way. It's strange, buying a property in Spain is such a big financial decision, and yet so many people are prepared to dive in head first - buy, buy, buy! Rent a place first. Or consider doing a house swap.

The deposit

You look around and find the place you like. Now get yourself a lawyer! Next, you put down a deposit and sign a precontract. The deposit will be between 5% and 10% - although it may seem obvious to offer a deposit of 5%, remember that the buyer has to give you back double the deposit if he decides to pull out of the sale. That's great news for you, and it means the property is as good as yours once you have paid your deposit.

The fees

Almost anyone buying a property in Spain for the first time finds the process confusing, especially the breakdown of fees payable. So let's go through them briefly.

Estate agent fees vary a lot. From 2-6% typically. The fee is paid by the buyer, usually already added on to the asking price.

Property buying fees add about 10% to property purchase cost. NB You can declare a lower value and pay some in cash (don't go too low though - no more than 20% of the property price). Also, remember you may sell the property at a later date, so you don't want the declared value to be too low on the deeds - where the new buyer can check the price you originally paid for the property.

Approximate cost to buy a home at 128,000 euros or (80,000 pounds)

* IVA 7% Spanish VAT payable on declared property value 8,960.00
* Legal fees Searches, preparing deeds and translation etc 900.00
* Notary's fees Preparing escritura, registering and stamp duty 600.00
* I.A.J.D Spanish tax of 0.5% of the declared value 640.00
* Connection charges Water, gas, drainage, electricity etc 300.00
* Plus Valia Capital Gains Tax on increased value of plot since last sold. Levied by the Town Hall 60.00
* Total: approx. 7,355 pounds €11.460.00

After you have bought - Running costs

There are plenty of running costs to consider once you have bought your property. The cost of living in Arcos is relatively low, but there are still the same utility bills to pay - though you will be paying less than you currently do in the UK. Water and electricity you'll probably pay by direct debit, while gas comes in bottles at about 11 euros each. There's no TV licence fee and 'council' tax is much much lower than in the UK.

Common mistakes

* Not getting proper legal advice
* Not getting a survey done on an old property
* Underestimating restoration costs
* Buying a property for business, but overestimating income
* Not including conditional clauses in the contract

Come and stay with us in Casa Campana - we'll tell you lots more about Arcos. We speak Spanish and we have many contacts in town!

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