Buying any property is a huge decision, with many things to consider and assess; buying a property in, and potentially moving to, Spain is another kettle of fish. As soon as you know that this is where you think your life is going, you really need to sit down and take a long hard look at your finances and work out exactly how much you can afford to spend – and how.
There are a number of options available for financing the purchase of your new property in Spain, all of which should be considered for their suitability. We recommend assessing what you can afford from savings, the sale or re-mortgage of your UK property, or funding from the UK or Spain. In addition to the purchase price you can afford, it’s a good idea to get an idea about the other costs involved in purchasing a property in Spain – more often than not there will be more than you realise, and some of them will pop up unexpectedly. The last thing you want to do is only take into account the purchase price, and end up running out of money early.
You will also need to consider how you are going to move your funds into Spain – unless, of course, you already have the euros you need in the country. If you are transferring sterling into euros, you are likely to be affected by currency fluctuations – which can be very volatile, and make a dramatic impact on your purchase price.
Realistically, the state of your finances continually impacts your actions up to, during, and even after, your property purchase in Spain. You will need to consider any tax implications, especially if you are moving over to your new home. If you are drawing your pension, would this be affected by your move, and what is the best way to ensure you can continue to reap from the full benefits of this? If you are working, how can you ensure that you do not pay tax in both countries?
Once your purchase has been completed, you will need to make sure you have a handle on how you are going to pay mortgage repayments, and maintain both your property and your life. One area that is not always considered is the different cost of living in Spain compared to the UK – although, you are generally likely to find that most things cost less here than they did at home.