Barcelona Bargains
September 20th, 2006
They do exist, but you’ll need to put in plenty of legwork, says Matt Dunn. Barcelona is a fast-paced, vibrant city, with a property market to match. And while the decision to buy in the Catalan capital is an easy one to make, trying to secure the property of your dreams can be a little more difficult.
The buying process itself is fairly straightforward. Decide where you want to live, find a place you like, and negotiate with the seller. Once your offer is accepted, you’ll be asked to pay a small deposit while your lawyer performs the necessary checks. Assuming all is satisfactory, after ten or so days you’ll be expected to sign the contrato de arras (similar to our exchange of contracts) and pay 10 per cent of the property price. This is non-refundable, but if the seller pulls out at this stage he has to pay you twice this amount back.
About four weeks later both parties go to the notario – the public official appointed by the Spanish Government – for the signing of the title deeds (escrituras). At this point you pay the balance of the purchase price, all fees and taxes, and the apartment is yours. Sounds simple? It does. Until you realise how complicated each of those steps can be.
Barcelona’s a big city, with a number of diverse neighbourhoods, each with its own style of buildings, so first think about how you want to live, as this will influence the type of apartment you’ll be buying. And be aware of the market. If you’re after modern accommodation, perhaps a two-bedroom apartment with a lift, you’ll be in Eixample or Gracia fighting off young Spanish couples, while your main competition for the older-style properties in and around the Barri Gotic will probably be other foreign buyers looking for holiday homes.
And while the higher you go, the brighter your apartment will be, can you really stand walking up five flights of stairs in the Spanish heat carrying your shopping? Don’t rely on a new law that says that every building that doesn’t have a lift will shortly have to be fitted with one – the Spanish “shortly” can be very different from an English one, and if the building doesn’t have space then it won’t happen.
Unless you plan to let your apartment, don’t buy in one of the tourist areas. Staying near your favourite bar or restaurant is good, living right above it is another thing entirely. Remember that the public transport system is reliable (and air-conditioned) and taxis are cheap, and you’ll certainly get more for your money away from the centre. Once you’ve decided on your area, next you have to find an estate agent.
Barcelona has an estate agent on almost every corner, so the simplest way to do this is by hitting the streets. Then all you have to do is go on viewings. Lots of them. That’s when you discover the difference between the description the agent gives you and what a property is actually like. For example, the Spanish are bedroom-obsessed, always describing apartments as if the number of rooms is the most significant factor. Ignore this, and concentrate instead on the number of square metres – four bedrooms in 70 square metres means at least three of them will be very small indeed.
Assuming you find somewhere you like, next you have to make an offer. If your offer is accepted, however, your lawyer is on a two-week race against time to make sure that the property isn’t about to be knocked down, repossessed or have a motorway built through it, and more importantly is actually owned by the person selling it. This is when most deals go wrong.
At least when it comes to finance, the good news is that arranging an overseas mortgage is getting easier. Banks like BBVA and Barclays can lend you up to 70 per cent of the purchase price and will help you to set up a Spanish bank account from Britain. But while a European mortgage is cheaper than borrowing the equivalent amount here, Spanish stamp duty, at 7 per cent, makes Gordon Brown seem positively generous. In total you?ll spend 10 per cent of the property’s value on purchase costs. And although it’s happening less nowadays (because it’s illegal), be aware that you might be asked to pay a percentage of the purchase price in “black” money, with a lower price stated on the deeds and a figure paid to the seller in cash.
This could leave you with a higher tax bill when you sell the property on – plus the alarming prospect of walking through a foreign city carrying a large amount of currency.
