How to Transfer Money to Spain for a Property Purchase

Why Currency Exchange Matters So Much

When you buy a property in Spain from the UK, you're not just buying a house — you're also making one of the largest currency transactions of your life. Every penny of the purchase price, plus taxes and fees, needs to be converted from pounds sterling to euros. The exchange rate you get can make a difference of thousands of pounds.

Let's put this in perspective. On a €300,000 property purchase:

• At an exchange rate of £1 = €1.18, you'd pay £254,237
• At £1 = €1.15, you'd pay £260,870
• That's a difference of £6,633 — just from exchange rate movement

And that's before we even consider the margin your bank or currency provider adds to the interbank rate. High street banks typically add a margin of 3-5%, while currency specialists work on margins of 0.3-1%. On a €300,000 transfer, that difference in margin alone could save you £3,000-£8,000.

High Street Banks vs Currency Specialists

High Street Banks

Your UK bank (Barclays, HSBC, NatWest, Lloyds, etc.) can send euros to Spain via international wire transfer (SWIFT). It's familiar and easy. But it's also the most expensive option:

• Exchange rate margin: 3-5% above the interbank rate. On €300,000, that's £6,000-£10,000 in hidden costs
• Transfer fee: £25-£40 per transfer
• Receiving fee: Your Spanish bank may also charge €15-€30 for receiving a SWIFT transfer
• Speed: 2-5 business days
• No specialist advice: Bank staff processing the transfer won't offer guidance on timing or hedging strategies

For a small transfer (under £5,000), using your bank is fine — the absolute cost difference is modest. For a property purchase of hundreds of thousands of pounds, it's an expensive mistake.

Currency Specialists

Companies that specialise in international currency transfers offer significantly better rates and additional services specifically designed for property purchases. The main players in the UK-to-Spain market include:

Wise (formerly TransferWise)

• Margin: Approximately 0.4-0.6% on GBP to EUR
• Fee: Transparent fee shown upfront (typically 0.3-0.5% of transfer amount)
• Speed: Usually same-day or next business day
• Maximum transfer: Up to £1,000,000 per transfer
• Best for: Smaller amounts, transparent pricing, tech-savvy users
• Limitation: No forward contracts, no personal account manager

Currencies Direct

• Margin: 0.3-0.7% typically (negotiable on large amounts)
• Fee: No transfer fees
• Speed: Same day or next business day
• Forward contracts: Yes — lock in a rate for up to 2 years
• Best for: Property purchases, personal service, expats with regular transfer needs
• Added value: Dedicated account manager, offices in Spain

Moneycorp

• Margin: 0.5-1% (negotiable)
• Fee: No transfer fees for amounts over £3,000
• Speed: Same day to 2 business days
• Forward contracts: Yes
• Best for: Larger transactions, corporate clients, regular payments
• Added value: Rate alerts, market commentary, dedicated dealers

OFX (formerly OzForex)

• Margin: 0.4-0.8%
• Fee: No transfer fees
• Speed: 1-2 business days
• Forward contracts: Yes — up to 12 months
• Best for: Large one-off transfers, competitive rates

Forward Contracts: Locking In Your Rate

A forward contract is perhaps the most valuable tool available to property buyers. It allows you to fix an exchange rate now for a transfer that will happen in the future — typically when your completion date is weeks or months away.

Here's how it works:

• You agree to buy, say, €300,000 at a rate of £1 = €1.17
• You pay a deposit (usually 5-10% of the sterling amount)
• On the agreed date (your completion date), you transfer the remaining sterling and receive €300,000, regardless of what the exchange rate is on that day

Why this matters: Between signing the arras contract and completion, the exchange rate could move significantly. In volatile periods, GBP/EUR can move 5% or more in a few weeks. On €300,000, a 5% adverse movement costs you approximately £12,000. A forward contract eliminates this risk entirely.

The downside: If the rate moves in your favour after you lock in, you don't benefit from the better rate. You've traded potential upside for certainty. For most buyers, certainty is worth more than speculation — you're buying a home, not trading currencies.

Forward contracts are available from most currency specialists (Currencies Direct, Moneycorp, OFX) but not from Wise or Revolut.

How Much You Can Save on a €300,000 Property

Let's work through a real example. Assume the interbank rate is £1 = €1.17:

• High street bank (4% margin): Effective rate of £1 = €1.1232. Cost: £267,094
• Currency specialist (0.5% margin): Effective rate of £1 = €1.1642. Cost: £257,688
• Saving: £9,406

That's nearly £10,000 saved simply by using a specialist instead of your bank. Add in a forward contract to protect against adverse rate movement, and the potential savings are even larger.

Even on the ongoing costs — community fees, IBI, insurance, utilities — using a currency specialist for your regular euro transfers will save you hundreds of pounds per year.

Anti-Money Laundering Requirements

Transferring large sums internationally triggers anti-money laundering (AML) checks at multiple points. Be prepared for the following:

UK Side

• Source of funds: Your bank and currency provider will ask where the money came from. Acceptable answers include savings, sale of a UK property, inheritance, pension lump sum, or earnings. You'll need documentation: bank statements showing the accumulation of savings, completion statements from a UK property sale, probate documents for inheritance
• Suspicious Activity Reports: Banks are required to flag unusual transactions. A large international transfer that's out of character for your account may trigger a review. Give your bank advance notice of the planned transfer

Spanish Side

• Modelo S1 declaration: For transfers into Spain exceeding €10,000 (or equivalent), the Spanish government requires a declaration. In practice, your Spanish bank handles this when the funds arrive, but you may be asked for supporting documentation
• Proof of funds at the notary: The notary will record how the purchase price was paid and may request evidence of the origin of funds. Your bank transfer receipts serve this purpose
• Bank of Spain reporting: Transfers from outside the EU exceeding €100,000 must be reported to the Bank of Spain. Since Brexit, this applies to all GBP transfers

Proof of Funds Documentation

Start gathering your proof-of-funds documentation early. Spanish notaries and banks are increasingly thorough, and missing documents can delay completion. You'll typically need:

• Bank statements: 3-6 months of statements from the account(s) you're using to fund the purchase
• Property sale proceeds: If you're using proceeds from selling a UK property, keep the completion statement from your solicitor
• Mortgage offer: If part of the funds come from a Spanish mortgage, the formal offer letter suffices
• Gift documentation: If family members are contributing, a signed letter confirming the gift plus their bank statements showing the source
• Transfer confirmations: Keep confirmation receipts for every transfer you make to Spain — from the sending bank/provider and the receiving Spanish bank

Top tip: Create a paper trail. Every pound that ends up at the notary as part of your purchase price should be traceable back to a legitimate source. This isn't just for compliance — it also protects you if Spanish tax authorities ever query where your money came from.

Practical Steps for Your Property Transfer

Here's our recommended process for transferring your property purchase funds:

• Step 1: Open an account with a currency specialist (Currencies Direct, Moneycorp, or OFX) well before you need to transfer money. The registration and verification process takes 2-5 business days
• Step 2: When you sign the arras contract, consider a forward contract to lock in the rate for your completion payment. You'll need to deposit 5-10% of the sterling amount
• Step 3: Transfer the arras deposit (10% of purchase price) through your currency specialist to your Spanish bank account or your lawyer's client account as specified in the contract
• Step 4: A few days before completion, transfer the balance. Order your banker's draft from your Spanish bank, or arrange for the funds to be available for a same-day transfer on completion day
• Step 5: Keep copies of all transfer confirmations, exchange rate contracts, and receipts. You'll need these for the notary and potentially for future tax returns

Using a currency specialist and a forward contract is one of the simplest ways to save money on your Spanish property purchase. It requires no negotiation, no compromise on the property, and no change to the buying process — just a smarter choice about how you move your money across borders.

Ongoing Transfers: After the Purchase

The need for GBP-to-EUR transfers doesn't end at completion. If you're a UK-based owner of a Spanish property, you'll need to send euros regularly to cover ongoing costs:

• Community fees: €50-€300/month
• IBI (annual property tax): €300-€1,500/year
• Utility bills: €100-€300/month (higher in summer with air conditioning)
• Insurance: €250-€600/year
• Maintenance and gardening: Variable

Set up a regular payment plan with your currency specialist. Most providers (Currencies Direct, Moneycorp) offer automated regular transfers — you specify the amount in sterling each month and they convert and send euros to your Spanish bank account. This averages out exchange rate fluctuations over time (a strategy known as "cost averaging") and ensures your Spanish direct debits are always funded.

Even on these smaller regular transfers, using a specialist instead of your UK bank saves you 2-4% on each transaction. Over the lifetime of property ownership, that adds up to a significant sum — potentially hundreds of pounds per year on running costs alone.