The buying process — simpler than you think
You're probably like so many others who've sat through a cold winter's day in Iceland, letting their mind drift to sunny days by the Mediterranean.
Morning coffee on the terrace, rounds of golf in January, walks along the beach, or simply more time with the family in a warm and relaxed setting.
More and more people are turning that dream into reality by buying a property in Spain. Whether the goal is a summer home, an investment property, a second home or a future retirement base, Spain offers a unique combination of climate, quality of life, safety and attractive property prices.
Buying property abroad can seem complicated and daunting, but the reality is that with the right advice and support, the process can be both safe and simple. At Pálmi you get Icelandic service and guidance throughout the entire process, from your very first enquiry right up to the moment you hold the keys to your new property.
We understand what buyers need and know what questions come up when investing in property abroad. That's why we work with trusted lawyers, banks and specialists in Spain to ensure the purchase goes ahead safely and professionally.
Whether you're dreaming of a flat by the beach on the Costa Blanca, a stunning villa with a pool, or a modern new-build with sea views, we're here to help you find a property that suits your needs and your budget.
You call the shots — we find what you're after
Price range, detached house, apartment, private pool, on a golf resort, in town, near schools, walking distance to shops and restaurants, as a private home, to let out, near the beach, new build or older, or a renovation project? We help with all of it.
Viewing trip
Once you have a basic idea of what you're after, we recommend planning a viewing trip — to look at properties, get a feel for the different areas, obtain your NIE number, set up a power of attorney, and get a sense of the whole process. Pálmi offers tailored viewing trips, and a large part of the cost is refunded if you go ahead with a purchase.
An example of how a viewing trip is structured.
Together we find dates that suit you — 5 to 7 days is a popular length for a viewing trip. Working with our partners, we then find the best possible price on flights and accommodation.
During the viewing trip, a Pálmi staff member is with you the whole time. As always, we look after you from A to Z: picking you up at the airport, taking you to your accommodation, showing you around, viewing areas, viewing properties, and sorting out your NIE number, power of attorney and more. All our staff and partners are on hand throughout your trip.
It's fair to say the viewing trip is one of the most important steps in the buying process, as it gives prospective buyers a real understanding of the different areas, local customs, culture and the range of properties on offer — ideal for anyone ready to take the step towards owning their dream property.
Worth noting: if you go on to buy a new-build property following a viewing trip, the viewing trip fee is refunded in full for up to two people at completion.
Banking and financing
Financing a property purchase in Spain is very favourable, with mortgage interest rates from Spanish banks not linked to inflation and generally much lower than in Iceland. Rates are either fixed or variable. Variable rates are based on the EURIBOR rate at any given time plus the bank's margin. Variable rates are usually fixed for the first 12–24 months, and are then reviewed every 12 months, rising or falling depending on EURIBOR at that time. The bank's margin never changes. Loan terms usually also include a clause stating the rate will never exceed or fall below a certain percentage. With a fixed rate, the interest rate is set at the outset and remains the same for the whole term of the loan.
Loan term
Up to 30 years, depending on the borrower's age. For example, someone in their forties might be offered up to a 30-year loan, while someone in their sixties would likely only get a 15–20 year loan, as banks generally require the loan to be fully repaid by age 75.
Loan-to-value
Up to 60–75% of the bank's valuation or the sale price of the property. The bank sends its own representative to inspect and value the property the loan is being requested for. This valuation is what the bank uses to determine the maximum loan amount.
Loan application and documents
The documents required are generally similar to what's needed in Iceland: tax return, payslips for the last 3 months, bank statements for the last 3 months, and copies of payment slips for any car loans, mortgages or other loans. As mentioned above, Pálmi's staff have this process down to a fine art and will handle these details with you — no need to worry :)
Cost of the purchase
The buyer's costs when purchasing a property in Spain are generally around 12–14% on top of the purchase price. These costs cannot be financed with a loan.
| Item | Cost |
|---|---|
| Tax to the Spanish state | 9% of the purchase price |
| Bank valuation (if a loan is taken) | €150–400 |
| Utility contracts (water and electricity) | €300–500 |
| NIE number + translations and notary | ~€270 |
| Legal fees and administration charge | €2,000–2,900 |
| Loan arrangement fee (if a loan is taken) | 3–4% of the loan amount |
Running costs and annual taxes
General running costs for a property in Spain are much more affordable than, for example, in Iceland.
Property tax
€300–1,500 per year
Community fees
€25–150 per month
Insurance
~€500 per year
Electricity + water
~€1,400 per year (3 bedrooms)
Electricity and water costs naturally vary depending on usage, but as a general guide, based on around 50% annual usage in a 3-bedroom property (roughly 180 days' use by a family of four): water €600, electricity €800, or around €1,400 a year in total.
Ready to take the first step?
Get in touch and let's start the conversation — no obligation.
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