Spain has always been a popular location for UK residents buying holiday homes, retirement homes and investment properties abroad.
Whether you are a resident of the UK buying property in Spain as an investment, or you are an international investor, you will have to perform one or more currency transactions to complete your property purchase.
Foreign Exchange for Buying Property in Spain
Buying property in Spain is a serious investment, and as such requires planning, especially if you are purchasing a new Spanish property 'off plan' where you are required to make several 'stage payments' during its construction.
For illustration purposes, let us assume that you are a UK resident buying property in Spain. The developer will require a deposit in Euros straight away, and then further "stage payments" during the construction of your Spanish property over the next 18 months. There will be a final payment upon completion also. You will know the price of the property you are buying in Euros and this should not increase unless you upgrade the specification of the villa.
The actual cost in Sterling will be determined by the timing of your currency purchase. Naturally, if Sterling strengthens during construction, the cost of your property will decline but if the Euro strengthens then your costs will increase - i.e. a stronger Euro means your property in Spain will be more expensive! (This will also apply to those purchasing a straight 're-sale' property where there is a gap between the offer being accepted and the completion of the sale).
A Place in the Sun Magazine - Buyers Guide offers more information about buying property in the Costa Brava.
Buying Property in Spain – An Example to illustrate the potential volatility:
A Spanish property priced at EUR200,000 would have cost £129,870 in January 2003 but increased in cost by £12,980 to £142,850 by May (10% increase in just 5 months).
When you buy property in Spain, in our experience it is highly advantageous for the customer if they understand as much as possible about the potential foreign exchange exposure they face. As a result HiFX provides regular market updates to clients immediately upon registration. The service is free and carries no obligation to buy currency.
HiFX has helped many clients to buy property in Spain and every year we assist tens of thousands of people buy and transfer foreign currency.
If you are buying property in Spain and you would like further information on our services, please call our Private Client Desk on 01753 859159 or alternatively visit the HiFX call me back page to have one of our representatives call you at your convenience.