Spain after Covid: your questions answered

What will happen to prices in Spain after coronavirus, can we view Spanish property online, will there be a Brexit extension…? Over the past few weekends Spain Property Guides has taken part in webinars featuring leading estate agents across Spain, from the Costa del Sol to Costa Blanca via AlmerÍa, as well as a Spanish property lawyer Raquel Perez.

To meet any of our experts online, just let us know where you want to buy.

The answers cover all of your most important questions, not only about the current crisis, but also about Brexit, buying paperwork and much more. To be introduced to any of our experts, simply click here.

Questions around current lockdown

Are you still able to work in the lockdown?

Karsten Ryder of Vincent Real Estate: Our business is working just as before Covid-19, except that cannot see clients face to face. All staff are working remotely, speaking to clients and vendors on Skype, Whatsapp etc. We’re in contact with all client base; we all love to talk!

The government is bringing in a phased de-escalation in four 2-week phases and we should be up and running as normal by summer.

To view the whole Buying in Spain after Covid-19 webinar “as live”, just click here.

Can we do online viewings?

Karsten Ryder of Vincent Real Estate: We’ve offered them for many years, but now more vendors will allow us to do them. People still buy properties unviewed and we had two this week: one at €230,000 and the other at 4% below asking price, at €45,000. We have five other offers that we’re working through.

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So, yes, it’s very possible. If you like what you see we will make a reservation contract on a “subject to viewing basis”, and the viewing needs to happen within about two weeks of the travel restrictions being lifted. The process is simple for us and hasn’t changed, it’s just a question of the buyer not being able to look at it.

Can we get a surveyor to check over a property for us?

Karsten Ryder of Vincent Real Estate: Architect/surveyors will be able to get physical access to a property from 11 May. It is standard for the buyer to pay for that, around €300.

Covid effect on prices?

What do you think will happen to house prices in Spain after coronavirus, and why?

Karen O’Hagan, Casa y Campo: It is difficult to see how this crisis will unfold and what will happen to house prices in Spain after coronavirus and the lockdown in all honesty.

Karsten Ryder of Vincent Real Estate: If prices drop then more will want to buy, so come on down! Many British vendors may have already dropped prices because of Brexit, so they are already as low as they will go.

You could see a small percentage drop overall, but no more than that, and in the Alicante region we have had the largest growth in prices in recent years in Spain, so even if they do fall it won’t be to where we were four or five years ago. Of course there is nothing to stop you putting an offer in.

To be put in touch with a trusted and experienced agent in your favourite part of Spain, just tell us where you want to buy, here.

Will developers take lower offers?

Karsten Ryder of Vincent Real Estate: You have to remember that they have bought the land and sub-contracted the work. Hence prices may not be able to fall, but instead there will be incentives such as higher-end furniture package, air-conditioning throughout, better kitchen equipment, etc.

And which kind of properties might be more popular post-lockdown?

Chloe Williams of TSEA: We are also seeing an increase in clients requesting or wanting short term holiday lets as they feel safer in a private residence, as opposed to staying in hotels as they do not want to be in a crowded environment.

The knock on effect is more and more clients asking for good properties to buy and to let out when not using them themselves or purely as a rental investment. More holiday makers feel safer in a private residence. That could be anything from a simple apartment right up to luxury villas. We also see that flights may be quite cheap in the first instance where airlines desperate to sell tickets try their best to improve ticket sales.

If prices might fall post pandemic why would I make an offer now?

Karen O’Hagan, Casa y Campo: It is our feeling as agents that we will have a busy period post lockdown. We’ve been kept busy throughout lockdown with clients wishing to view and ultimately buy post pandemic. We feel there will be an urgency to buy as people have lost time in being able to obtain and enjoy their ultimate “dream” property and change in their lifestyle in a positive way.

When putting in an offer, what percentage under the asking price is the norm?

Karen O’Hagan, Casa y Campo: We will always guide our clients on where an offer could be deemed as accepted. It can vary property to property. We will often suggest an offer/negotiation to commence at the 5-10% less than the asking price is a good place to begin.

Chloe Williams of TSEA: This is something which we recommend is done on a case-by-case basis. Once you start to work with us, we’ll help you understand the value for money which different properties can offer. Plus we know which vendors are more motivated to accept an offer than others and we are experts in negotiating with vendors of all nationalities, as each will respond in different ways to offers.

Karsten Ryder of Vincent Real Estate: It really depends how desperate the buyer and the vendor are. We will pass on any reasonable offer. As a general rule, the less complicated the buyer’s offer the better the chance of gaining a discount. E.g. a cash buyer with no legal issues can make the offer and be in the property in six weeks’ time.

And if vendors are taking their money back to the UK they are getting a lot more since the pound dropped, which might be a reason to get a reduction for the buyer.

Questions on the NIE

What is an NIE and how do I get it?

Raquel Perez of Perez Legal Group: It’s an A4 document that is a foreigners’ identification number that you will need in Spain if you are going to buy a property. You apply at the police station, or we can go on behalf of clients, and the number should be raised by tax office. It’s essential.

To be introduced to Raquel just click here and fill out the form. Raquel will be in touch to help you buy safely in Spain.

Chloe Williams of TSEA: An NIE number is just a number to assign personal information on the system and works mostly as a tax number. A valid reason is required when applying for the number (proving to the authorities WHY it is needed). It can be obtained by proxy or in person, in advance or during the residency process. It’s possible to do it yourself with a good level of Spanish and some knowledge of the administration involved. Many clients use their lawyer to do this for them as part of their buying costs. Let us get a quote for you and we can assure you it is reasonable.

How do we get my Spanish NIE from here in the UK?

Raquel Perez of Perez Legal Group: You can apply in London for your NIE, but it’s not easy. To apply you need a Spanish address or a concept of what you want it for. We sometimes give our office address, but not all police stations accept that. The price for your NIE is €165 per person.

Karen O’Hagan, Casa y Campo: In London you may obtain your NIE at the Spanish foreign office in WC2. Details are on their website and you can make an appointment there. Alternatively, you may obtain a POA (power of attorney) with a notary in one of the UK cities – nominating a Spanish lawyer as your POA. Once your Spanish lawyer has this, they may apply here in Spain for your NIE.

Questions on Spanish banks

How do I open a Spanish bank account?

Raquel Perez of Perez Legal Group: You’ll start with a non-resident’s bank account in Spain, and to open it you need your last tax return, your passport and NIE number. The process is basically the same for all banks, but Santander doesn’t require an NIE number. If you’re retired you need the conformation that you get a pension. You don’t need to be there in person; I can do it with power of attorney. When you become resident you will change it to a residents account, for which the charges are normally lower.

What documentation do you need if self-employed to verify income for Spanish banks?

Karen O’Hagan, Casa y Campo: Your P60 will prove your status or source of income if self-employed. You will need to show this to your new bank when opening a new account along with your NIE and Passport.

To be put in touch with a trusted and experienced agent in your favourite part of Spain, just tell us where you want to buy, here.

Chloe Williams of TSEA: If self employed abroad? Any document that proves income and or taxes paid. This depends on your country of residence, as each country is different. The proof of income can be through wage slips, tax returns filed, bank statements, contractual documents, etc. Spanish banks are flexible on this.

Can I get a bank account in Spain which does not have a monthly charge whilst in credit?

Karen O’Hagan, Casa y Campo: Bank charges will vary from bank to bank. If you have an account with a co-operative bank such as Cajamar and keep an amount of approximately €1,050 in it, you will not attract charges.

Questions on Power of Attorney

How do we organise power of attorney (POA)?

Raquel Perez of Perez Legal Group: You can do this from the UK very simply. We request a copy of your passport, proof of address and occupation. We then prepare the document, send the document to you by email with a link to your nearest UK notary, who will organise it all.

This allows you to do everything for the property. You don’t have to worry about it being misused – If anyone misused it they would simply go to jail. Then the POA is revoked after the transaction is finished.

Karen O’Hagan, Casa y Campo: The average cost of obtaining a Power Of Attorney (POA) in the UK is £400, compared to in Spain where you will pay around €85. Once must consider that you will be saving on flight and accommodation costs to visit and make your POA here in Spain. In addition, with the travel restrictions in place for now obtaining your POA in the UK can be a good solution.

Questions on residency and Brexit

How do we apply for residency before Brexit?

Raquel Perez of Perez Legal Group: We are in the Brexit transition period. In this period, if you are in Spain for three months or more you have to apply for residencia. You need to go to the police station with documents showing:

• private health cover for the first year at least
• registration on the town hall padreon,
• proof of renting or owning a property,
• the application form
• a certificate from your English bank showing that in the previous six months your balance was more than £7,000. For a married couple that is £10,000 and in a joint account. If unmarried £7,000 each.
• The cost of residencia is €280 per person.

For Spanish bureaucracy, these are actually quite easy documents to get! You can apply the first day you arrive in Spain. That’s the rules until 31 December but I believe it will be extended for a quarter – 3 months – at least. This will change after Brexit, but we don’t know by how much. Probably there will be more questions about the financial situation.

What other restrictions might Brexit bring?

Raquel Perez of Perez Legal Group: To get to Spain there will a visado (permit), and you’ll get a stamp in your passport with an entry and exit date. Permission which will be provided for one month, three months, six months or whatever, depending on whether you want to be resident. You will apply for a different visado if you’re a tourist wanting to visit your holiday home, or a resident, or wanting to work.

I am a non-EU citizen and want to get permission to stay in Spain for 180 days a year. What do I need?

Karen O’Hagan, Casa y Campo, Almeria:
There are several different visas you can apply to in order to start living legally in Spain?

• Golden visa, for those willing to invest €500,000 in the country.
• Entrepreneur visa, residence permit obtained by starting a company.
• Non-lucrative visa, if you don’t want to conduct any economic activity.
• Student visa, for those studying or conducting research in the country.
• Work visa, as a self-employed or highly qualified worker

These visas grant you the possibility to get your temporary residence permit in Spain, which enables a non-EU citizen to live in the country for more than 90 days (long-run). Your lawyer will be able to assist you with your personal visa requirements.

Chloe Williams of The Spanish Estate Agent (TSEA): It depends on the country of nationality/residence. In general terms, most non EU citizens can stay in Spain for 90 days in a 180 day period. (90 days in/90 days out). To avoid being subject to this restriction it is necessary to obtain a visa or a residency permit.

There are multiple types of permits, depending on the motivation: age of the applicant, with or without accompanying family members, investment in assets (such as real estate) or not, application for work permit (or not). We would recommend you speak to a local lawyer who can advise on the various options for staying in Spain including getting a ‘Golden Visa’ for you and your family.  We can put you in touch with a lawyer who can help you.

To be put in touch with a trusted and experienced agent in your favourite part of Spain, just tell us where you want to buy, here.

Can you apply for residency before leaving the UK or do you have to wait to be on Spanish soil?

Karen O’Hagan, Casa y Campo: I believe, if you have an address in Spain an NIE and plan to move permanently in the next months you may apply from the UK via your lawyer.

Chloe Williams of TSEA: At present, the UK is still subject to the rules for EU citizens and as such, residency is applied for in person in Spain. This is a very simple procedure. For non-EU citizens the residency application is started in the home country at the Spanish Embassy or Consulate and finalised in Spain. Although Boris Johnson is saying he will not delay the exit, we feel that this is absolutely impossible to avoid as too many factors still have to be negotiated.

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Other property-related questions

I am interested in rural properties in greener areas of Andalusia.

Karen O’Hagan, Casa y Campo: It is common to find that all areas of Spain are in fact green, even here in the driest parts of AlmerÍa. If you are to visit it is comparable with the Lake District with its green mountains and verdant valleys with running streams.

Chloe Williams of The Spanish Estate Agent (TSEA): Only a short drive from the coast, we have many beautiful properties in the mountains and countryside of Andalucia.  The ‘white villages’ of Andalucia and the surrounding areas are very popular and we can advise on the best places to live after listening to your requirements, likes and dislikes.

Do any of the agents work with Americans buying in Spain?

Karen O’Hagan, Casa y Campo: We have sold properties to several U.S citizens and have just moved clients over from Florida. We deal with clients from various international destinations.

Chloe Williams of TSEA: We have sold to many nationalities including Americans and been able to help them achieve their dream of owning a property in Spain

What’s the maximum age you can take a Spanish mortgage to?

Karen O’Hagan, Casa y Campo: In general, you may qualify for a mortgage up to the age of 70.

Chloe Williams of TSEA: 75 years of the youngest borrower

Please see our separate article on obtaining a Spanish mortgage.

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How common are new builds with integrated guest apartments (ie independent living)?

Karen O’Hagan, Casa y Campo: If you were to undertake a new build with a builder you can design your own home with a guest annex. Building costs per m2 in the area of Almeria range from €600m2 to €1,000m2 depending on proximity to the coast.

Chloe Williams of TSEA: We have many builders who can make this part of your property. So long as the property has got the permission for the overall amount of living space (i.e. not creating a living area out of a basement which is not part of the overall total of approved space), then this is definitely possible if you make these changes early enough in the building process.

Is it more cost effective to build you own villa or buy one already built?

Karen O’Hagan, Casa y Campo: That’s dependent on location and the price of your plot. I designed and built my own home here in Almería and have done so for clients and family since. I have learnt that you can create and build a property to your own taste for approximately 30% less than buying re-sale.

Who holds the deposit should I find a property and is it refundable after a cooling off period?

Karen O’Hagan, Casa y Campo: In general, the agent or lawyer will hold the reservation deposit. It will be refundable only if the paperwork is found (by your lawyer) that title cannot transfer or there is a problem with the legality. There is no such cooling off period once you have entered into an agreement to buy and you have signed a reservation agreement.

Chloe Williams of TSEA: Your lawyer or us the real estate agent will hold the deposit in an escrow account, unless it is agreed that it is passed onto the vendor. Once the deposit is paid and the contract is signed, then as long as the property meets the legal requirements of the contract which is investigated as part of the due diligence carried out by your lawyer, the deposit is not refundable. With a new development the deposit is held in an escrow account by the developer.

Are we expecting changes from government to the golden visa application process to attract investors?

Karen O’Hagan, Casa y Campo: As yet unknown.

Chloe Williams of TSEA: There is nothing in the Golden Visa programme that relates to the virus nor is affected by the virus. There is nothing that would lead us to expect a change in this process.

If I let out my new property, do I have to pay tax in both Spain and UK?

Karen O’Hagan, Casa y Campo: Spain and the UK have a dual taxation agreement. This means that you are not required to pay tax on the rental income in both countries. Although you do have to declare your income in the country within which you are tax resident, you don’t have to pay twice.

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Chloe Williams of TSEA: Your rental income would be taxed in Spain. If you also have the obligation to settle tax in the UK then you can deduct in the UK the tax paid in Spain (article 6 of the Double Tax Treaty between Spain and UK, in conjunction with Articles 22

What extra legal requirements are there to run a B&B in Malaga Province?

Chloe Williams of TSEA: It is necessary to obtain various permits from the Junta de Andalucia and the respective Town Hall. We can advise on this in each individual case.

To be put in touch with a trusted and experienced agent in your favourite part of Spain, just tell us where you want to buy, here.

Aren’t different areas’ buying regulations different?

Karen O’Hagan, Casa y Campo: Yes, each autonomous area tends to have slight differences in their rules. Depending on what it is your agent and lawyer will be able to guide you on local regulations relating to property.

Chloe Williams of TSEA: Yes, they are!  We can put you in touch with experts who can outline what those differences are and give you the most up to date advice on law and tax.