Banks
Banks are open Mon-Fri, 9.00-14.00 and Sat 9.00 - 13.00. In summer they may close slightly earlier. Most banks have English speaking staff and all can cope with International transactions. Commissions may be charged on foreign transactions and passports will be required for most. Most banks have a list of telephone numbers for stolen/lost credit cards although you are advised before arrival to ensure you have the relevant numbers with you. See our list of important numbers. Within major tourist areas there are endless shops and offices offering money exchange for all currencies. Most charge commission or offer lower exchange rates than banks. See more about Spanish banks here.

Credit cards
Most major credit cards are accepted all over Spain although some establishments may put a limit on the amounts you can withdraw or spend and sometimes there may be a surcharge. Most places now have ATM's for withdrawing cash, at which most cards will work. Most machines have the instructions in several languages and even the smallest of towns are now getting the machines. They can be a godsend at evenings and weekends and on holidays when banks can often close for several days at a time. Make sure you keep a separate record of your credit card numbers. If you lose your card, click here.

Purchase tax
The internal sales tax in Spain is known as IVA and varies between 7% and 33% depending on the item bought. Food, wine and basic requirements are taxed at 7%, most goods and services are charged at 16% and luxury items such as jewellery and cigarettes attract 33% tax. Hotels have a special 7% rate.

Transferring money worldwide
When you buy a property in Spain, you will know the price of the property in Euros but you will not know the actual cost until you buy all of the currency to pay for it. This means that the property could either cost you more than you had planned (if the Euro strengthens) or the property could become cheaper (if Sterling strengthens). Recently Sterling has fluctuated more than 10% against the Euro within a matter of months, so this does deserve careful consideration. On the basis that you are buying a property and not speculating on the currency markets, it is worth fixing the exchange rate for all of your future stage payments to the agent / developer.
How to fix the exchange rate:
1/ Buy all of the currency now on a "spot contract". Hold the currency on deposit and send payments when they are due from your Euro account. To do this you need to have full funds available.
2/ Buy as much currency as you can afford now (e.g. for the first 2 payments) and reserve an exchange rate for the remaining payments. To reserve an exchange rate you need to buy a 'forward currency contract'. In effect you are buying currency now but paying at a later date when you have the funds available. The exchange rate that you achieve on a "forward contract" is not quite as good as that for a "spot contract" but it does guarantee that you know the cost of the property. You will be required to pay 10% of the value immediately and the balance by the date that you have reserved the currency for.

Currency Factors

Many people are unaware or neglect the importance that exchange rates have on the cost of their overseas property and the currency risk that is associated with an overseas purchase.

The majority of individuals still use their bank to exchange their currency and transfer their funds abroad even though they know that their bank do not necessary provide them with the best rates, or facilitate against currency risk. The reason being they are afraid or unsure of the alternatives.

Recommendations from friends and property agencies can usually help to find a reputable foreign exchange specialist. There are also several checks you can make to ensure that you are getting the most from your currency specialist. Firstly, insist on having a personally assigned dealer (preferably the same dealer that was recommended by your friend or property agency). Make sure the dealer keeps you informed on all issues affecting your situation. If there is a rate that you desire, inform your dealer and he/she can contact you or book that rate automatically when it is achieved. The dealer’s ability to access up-to-the-second exchange rates means that they should be able to significantly undercut banks and other financial institutions that quote daily rates, however, it is always a good idea to get quotes from your bank to ensure that your dealer is giving you the best rates.

The currency market can fluctuate dramatically and the actual cost of foreign currency depends on the timing of your currency purchase, this is known as currency risk. For example, during Jan 03 and Mar 03 the Sterling to Euro exchange rate dropped from 1.56 to 1.46. In real terms, a property priced at €200,000 would increase from £128,205 to £136,986 over that time period, a difference of £8,781. The ability to fix the exchange rate when the market is favourable for some time in the future removes currency risk. This can be done using a forward contract, but there are other mechanisms that may suit your particular circumstances.

In summary, use a recommended currency specialist that is able to offer a personal service and strategies that can alleviate currency risk. These simple guidelines could save you not just money, but time and effort.