Buying a house in Spain - a guide
Before purchasing your property in Spain - it is most important to choose the location. An old adage for purchasing a property in Spain is "follow the three l's" location, location, location as this is without doubt the most important factor.
You must consider the following - is this a holiday home? is it for permanent residence? each question may direct you to completely different areas and properties, and should be taken very seriously before you rush into looking at that "wonderful villa".
Next you need to consider employment - are you looking for employment? if so where is the best location? many believe that the built up areas offer a lot more opportunities than some of the less commercial resorts - that is not always the case, as the commercial areas have an abundance of commission only sales jobs and bar work, and a lot of people competing for them!
In some of the less built up areas (such as some of the areas
around Costa Calida, and
in particular the up and coming areas such as Calasparra),
employment opportunities are far greater as the area is
starting to grow, and there can be a higher demand for skilled
labour
The easiest trap to fool into is to be swept away by the atmosphere and moment whilst in holiday, and people do tend to "rush in" and buy a home in the resort where they previously took their vacation. This is not necessarily a bad thing, but a couple of considerations should be made beforehand.
Tourist areas are packed during the summer, the bars and shops get overcrowded, your table at your favourite restaurant may be taken, beaches get overrun very quickly, parking can be difficult, the streets could smell like a thousand different types of foods (emitting from the local bars and cafes) and the noise levels will increase.
This is not meant to put you off, merely to remind you that sometimes being in "the heart of a tourist resort" is not always a good thing.
Moving slightly inland will offer great benefits - the property prices are usually lower than that of a popular tourist resort, the areas are quieter and closer to nature, the authentic Spanish surroundings and charm still remain and most areas have easy access back to the main resorts.
If you let us know your intentions, and preferred locations - we will be able to point you in the right direction
When purchasing a new home, payment is usually made in stages and the building work progresses - and will often vary as there is no set rule to payment amounts and stages. It is your responsibility to ensure that the work in question has been carried out to specification at each stage
It is always cost effective to ensure that any design or building changes are agreed and included at the design stage to avoid too many additional excessive costs.
To buy a plot of land or reconstruction project is relatively simple - but always recruit local expert help as the red tape and very different business practices in Spain can be difficult to follow if you have had no previous experience.
One of the important factors is to check that the land has been approved for building, and that the plot is large enough and suitable for the type of property you are looking to build. This can be done by obtaining the "certiicado de situacíon urbanística" from the local town hall
Resale properties represent great value for money in Spain, and the advantage is that you see exectly what you are getting, and what work (if any) needs to be carried out.
If you aim is to purchase a traditional Spanish home with charm and character; a building for renovation; a building with a large plot of land or outbuildings - you must usually buy a resale property
When purchasing a property anywhere- there is always an additional cost. In Spain, it is usual to expect to pay fees of around 10% of the property purchase price (and you will need to add between 1 to 1.5% for new properties to that total)
Fees are always based on the "declared" value of the property, which is traditionally much lower than the actual price (and this of course has a bearing if applying for a mortgage). There is regulation in place as "the law of public fees" makes it no longer possible to declare a very low figure, and the can be penalties for gross under-valuation.
-
Transfer tax (resale property only)
-
-
VAT (new properties only)
-
-
-
-
-
-
-
-
There are two types of exchange rate quoted on a site offering business transactions from Spain (indeed if you look at our property pages - we mention a commercial exchange rate)
Purchasing a property in Spain, allows you to benefit from a higher (usually) exchange rate than that of the tourist rate
In order to take advantage of the commercial rate - you should speak to your bank or other financial institutions to arrange a SWIFT transfer. The charges vary - so it is certainly worth shopping around
These are available from most Spanish banks. As with the UK, the amount you are able to borrow will depend on varying factors such as income, profession, property etc.
You must usually provide proof of income and outgoings. If the mortgage is for a commercial property, you will need to provide a detailed business plan.
In recent years Spanish mortgages have been the most competitive in Europe with rates varying at around 5%.
The maximum mortgage in Spain is usually 80% - (but rates and limits can vary from bank to bank. )
A property £100,00 obtaining a 60% mortgage, you must pay £40,000 deposit plus approx 10% fees of £10,000 - making a total of £50,000
Mortgages are granted as a percentage of the valuation and not the selling price.
In Spain, some aspects of conveyancing can only be performed by the Notario (public notary) such as the drawing up of deeds and witnessing signatures.
A Notario represents the Spanish government, and one of his/her main tasks is to ensure that the State taxes are paid on completion of sale. The Notario does not guarantee or verify accuracy of statements made in a contract - so it is vital to employ the services of a Spanish lawyer.
A lawyer should carry out the following:
-
Verify property belongs to the vendor and that he/she ihas legal authority to sell it (shown in the Escritura publica)
-
Making sure that there are no tenants
-
Check that there are no encumbrances or liens
-
Check that there are no pre-emption rights over the property, with no construction plans that would have an adverse affect on the value or use of the property
-
Check boundaries and measurements in the Escritura are accurate
-
Ensure permits and planning permissions are in order
-
Ensure that a proper title is obtained and arranging necessary registration of ownership
The first stage of buying a property is the signing of the "contrato privado de compraventa" - which usually takes place on payment of the deposit
Inheritance and Capital Gains Tax
Before registering the title deed, carefully consider taxes and inheritance consequences for those in whose name the deed is registered.
Property can be registered singularly; joint; name or names of children giving parents sole use during their lifetime or name os Spanish or foreign company.
The date of which is usually two to three months after signing , or the date agreed by all parties stated within the contract. Completion involves:
-
Transferring legal property ownership
-
-
-
Payment of fees, taxes and duties
The Notary will send you a bill for his/her fees or taxes which must be paid within 30 days of completion, at this time the Notary should also provide a draft deed of sale.
This takes place in the Notary's office before the deed of sale is signed, the Notary checks all the conditions contained in the contract have been fulfilled. It is normal for both the buyer and seller to be present, and read the deed of sale before it is signed and witnessed by the Notary (most deed of sales are in Spanish - so an interpreter may be required)
- Wills
- It is strongly recommended upon your property purchase that a Notarised will is granted in front of a Spanish Notary related to the assets in the Spanish territory. This avoids costs and delays for the beneficiaries as they are granted a period of six months from date of death to pay inheritance tax - delays in payment are penalised with additional late payment fines
Going through the process of moving home is a difficult one for most people moving "within the country" - so an overseas move can be a stressful time
Use a company that is a member of (FIDI) International Federation of Furniture Removers or (OMNI) Overseas Moving Network International who usually will have a lot of experience in this matter, and can offer advice and additional services such as insurance and packing if required.
- WELCOME TO SPAIN!
Now that you have arrived - there are a couple of things you should try to sort out as soon as possible (if your property ompany has not already done this for you - mind you do ask them first!)
-
Locks - change them as you do not know how many sets of keys were in circulations
-
Electricity - visit the local office with your passport or residence card and the contract and bils form the previous owner. You will need to organise the electricity contract for your new home whilst here
-
Gas - If you are fortunate enough to have mains gas (highly unlikely however unless you are in a main city) then you should contact the supplier. If like most however, the property is services by "bombonas" (gas bottles) - you will need to find and visit the local supplier, who may inform you that they wish to make a safety inspection first, before signing contracts and delivering the gas bottles. Be warned that these bottles are heavy and have a habit of running out at the most inconvenient times - so stock up!
Finally - ENJOY YOUR NEW HOME |
