Currency exchange when buying property in Spain

Why FX matters on a Spanish purchase

Between agreeing a price in euros and paying the balance at the notary, weeks or months can pass. If your money is in SEK, NOK, GBP, USD or another currency, a move in the exchange rate during that time changes what the property really costs you. On a €500,000 purchase, a 5% currency move is a €25,000 difference in your own currency.

Bank vs FX specialist

Providers earn money from the spread (the gap between the rate they give you and the market rate) plus any fees. Margins vary a lot between banks and specialist currency providers. Ask each provider for the euro amount you will receive for a set amount of your currency, on the same day, and compare. Use a provider that is authorised by the financial regulator in your country.

Forward contracts

A forward contract fixes today's exchange rate for a payment on a later date, usually with a deposit. It removes the risk of the rate moving against you, but you also give up any gain if it moves in your favour, and you are normally committed even if the purchase is delayed. Check what happens if completion moves.

Ongoing payments after completion

After you buy, IBI, community fees, utilities, insurance and non-resident tax are paid in euros, normally by direct debit from a Spanish bank account. Many owners top up that account with regular transfers rather than converting each bill separately.

• •Keep payment records: the notary records how the price was paid in the deed
• •Funds should come from a traceable bank account in your name
• •Large transfers may trigger anti-money-laundering checks — have proof of source of funds ready