When the home is priced in euros and your income is in pounds

When you buy a home in Spain, you are really dealing with two markets at once. The property market, which you have probably thought about a great deal. And the currency market, which you may not have thought about at all.

The home is priced in euros. Your savings and income are in pounds, or perhaps in dollars, Swiss francs or another currency. Between the two sits an exchange rate that moves every working day, and that nobody can predict.

If you buy a finished home and pay within a few weeks, this matters little. If you buy a new build with completion in two years, it can matter a great deal.

The sum most people never do

Most new builds on the Costa del Sol come with a payment plan: a smaller amount on reservation and contract, a few stage payments during construction, and a large final payment on completion. In our experience, the final payment is often 60-70 per cent of the price.

That means most of what you pay will be converted on a day when you do not yet know the rate.

A worked example. The home costs 500,000 euros. 350,000 euros is due on completion in two years.

• At 1 euro = £0.84, the final payment is about £294,000
• At 1 euro = £0.92, the final payment is about £322,000

The difference is £28,000, on a single payment, without the home changing price by a single euro.

For reference, the European Central Bank's euro reference rate was 0.8377 pounds per euro on 22 October 2026. The two rates above illustrate the point, they are not a forecast. What matters is that the range is wide enough to make a real difference to your finances, and that it is outside your control.

What you cannot do

You cannot time this.

Nobody knows where the pound will stand against the euro in six months, let alone in two years. Not your bank, not us, not the columnist in the weekend paper. Any article telling you the pound ‘ought to’ strengthen is guessing. It is just guessing with confidence.

So do not make a plan that depends on you picking the right day.

What you can do

What you can do is know exactly what you are exposed to, and decide how much uncertainty your finances can absorb. That is a completely different exercise, and one you can actually carry out.

Four questions give you the answer:

• How many euros do I need in total, including taxes and fees, not just the purchase price?
• When is each payment due? Write down the dates from the payment plan.
• How much more expensive can I afford it to become? Run the numbers at a rate clearly worse than today's, and see whether the purchase still works.
• What happens if completion is delayed? In our experience delays are common, and they move the final payment to a different rate.

With those answers, you have something to work with. Then you can talk to your bank or another payment provider about the options: fixing a rate for a future date, converting gradually, or doing nothing. The ECB publishes its reference rates for information only, and the Bank of England's daily spot rates are not official rates either, so the rate you are offered will differ. Compare the total cost, not just the headline rate.

We do not give currency advice. We are estate agents, not currency advisers, and we will not tell you when to convert. But we do think you should have done the sums before you sign, and we will tell you if it looks as though you have not.

Budget for the total, not the price in the listing

Your currency budget has to cover the full cost, not just the price of the home.

When you buy a new home in Andalucía, you normally pay:

• 10 per cent VAT (IVA): Spanish VAT on new homes
• 1.2 per cent stamp duty (AJD): the rate in Andalucía
• Lawyer, notary and Land Registry fees
• Any costs of a mortgage, if you borrow

All of this is paid in euros too. If you only budget for the purchase price, you have underestimated your euro needs by more than 11 per cent before anything else is added. Our buying guide goes through the costs step by step, and if you plan to borrow part of the price, read our article on Spanish mortgages for non-residents.

The money you pay before the home exists

When you buy off plan, you pay for something that has not been built yet. That is a different kind of risk from currency, and Spanish law has an answer to it.

From the building licence onwards, the developer must guarantee your stage payments through insurance or a bank guarantee, so that you get the money back with legal interest if the building is not started or finished on time. The money must go into a special account used only for that development. The Banco de España explains that this guarantee is what lets you recover your advance if the home is never completed.

But it is not automatically safe just because it exists on paper. Have an independent Spanish lawyer check the contract, the payment plan, the building licence, the property and the developer before you transfer anything, including the reservation deposit. The Spanish notaries' association gives the same advice: get legal advice before you sign or hand over any money.

In our experience, that advice costs you a few hours and a few thousand euros. Going without it can cost you everything.

Talk to us before you agree the payment plan

A good property purchase in Spain is decided long before the contract is signed: in the choice of home, of developer and of payment plan.

At Solkystmegleren we go through the whole picture with you: area, home, payment plan and total budget, including which payments fall due when. We recommend an independent lawyer for every purchase, and can put you in touch with lawyers we know.

Get in touch for a no-obligation chat. If you have already looked at a development, bring the payment plan. That is what decides how large your currency exposure really is.

This article is general information, not legal, tax or financial advice. Tax rates and rules change, and exchange rates move. Your home country may also require you to declare property abroad on your tax return, so check with an adviser there. Always look into your own situation with a lawyer and an accountant before you buy.