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Please print this Guide to Property Purchase Factsheet of advice and tips for your future reference.
Buying a property is Spain is simple and Advanta Homes commits to providing a complete service, which means that we are with you
throughout the whole process. However, it is worth taking time to understand this process and all the costs associated with property purchase.
The following is intended as a guide only and is in no way a substitute for professional advice.
Appointing a Solicitor (Abogado)
Whilst it is not a necessity to have a solicitor to purchase a house in Spain, it is to be
recommended.. You are free to appoint a solicitor of your choice, or if you prefer we can recommend one.
NIE number (Numero de Identificacion de Extranjeros).
It is essential to have an NIE number for any financial dealings you may have in Spain.
Although you need to attend in person to apply for your NIE number, we will manage this process on your behalf and accompany you to the NIE office. There is no cost associated with an NIE number.
An NIE number is an identification number which registers you with the Spanish government as a non-Spanish national
in Spain. Once you have your NIE number, this takes the place of your passport number for all official business.
Applying for a Bank Account
Whilst it is not a necessity to have a bank account, it is to be recommended. If you ask us
to, we will open an account on your behalf, or if you are over in Spain at the time, we can accompany you to the bank to assist you in opening the account.
The cost for opening a “non-residents” account is usually around 10 Euros.
Applying for a Mortgage
You can choose to apply for a mortgage in Spain or from the UK.
Mortgage rates in Spain tend to be lower than those in the UK currently around 3.5%.
A mortgage can be obtained if you can prove your income will cover the repayments.
There are generally 2 levels of mortgage offered, one for residents and one for non-residents.
For non-residents the mortgage offered is generally around 60% of the declared value, for residents it is usually around 80% of the bank’s value of the property.
We can arrange of all this on your behalf through our established relationships with BBVA and
Caja Madrid.
Purchasing a Property
Having made your decision, you will be asked to sign a simple contract (in English) and pay a
non-refundable deposit, which is usually 10% (never more) of the total purchase price (the remaining 90% is payable on the signing of the Title Deeds before the Notary)
This can all be done from the UK when you get back home, so there is no pressure to bring money
with you to Spain, and no need to feel pressured into making quick decisions.
This is taken as official confirmation of your intent to purchase that property and the seller´s
intent to sell you that property, at the agreed price.
If you are purchasing a property off plan,
the Constructor may ask for stage payments to be made on the property. These can vary dependent on the Constructor.
Following this, your appointed solicitor will then carry out all necessary searches on the
property; to ensure that it is owned by the vendor, it has planning permission, there are no outstanding debts or charges on the property.and other legal encumbrances.
Once the searches on the property are satisfactorily completed and the deposit has been paid in
accordance with the terms and conditions of the contract then the Title Deeds are prepared, ready to be signed by both the buyer and the seller before the Notary.
The Notary (Notaria)
A Notary is an official lawyer appointed by the Spanish government to witness legal
transactions and to ensure that everything is done correctly and in accordance with Spanish law.
The Notary is primarily there to protect both the seller and the buyer.
Specifically they check that those selling the property are the legal owners with the right to
sell, all documentation is in order, and that the house does not have any unpaid debts or similar encumberances associated with it.
The Notary fees are around 2% of the declared price of the property and must be paid at the time
of the signing of the deeds.
The Title Deeds are read out by the Notary (they are translated for you beforehand by a native
English speaker) and all those present are identified.
The Title Deeds are then signed by the seller, the buyer, the translator and the Notary.
The house has then officially been purchased.
The original signed Title Deeds document is then retained by the Notary who will apply for a
formal change in the land registry. The buyer will receive an initial legal copy of the Title Deed which is signed and stamped by the Notary.
The official title deed can take a while to be processed and until then this is your official
proof of ownership and must be kept in a secure location.
We will be with you throughout the process, explaining exactly what is happening at all times.
Taxes
All property transactions in Spain are subject to either VAT (known as IVA) or Transfer Tax -
both of which are 7% of the declared value of the property.
This tax must be paid within 30 days of signing the title deed.
In addition to this, there are fees for the Notary and the Land Registry which together amount to a maximum of around 2% of
the declared value.
For these reasons we suggest you budget for an additional 10% to cover all purchase related taxes and costs.
Additional fees are liable if you are using a Spanish mortgage or a solicitor.
Capital Gains Tax (Plus Valia)
This is generally paid by the owner when they sell the property and not the buyer.
Capital Gains Tax is calculated on the increase in the value of the land from when it was last
sold.
Keys
You will be given the keys at the Notary once the Title Deeds have been signed.
Ongoing Costs as a Property Owner is Spain?
Other than the utility bills, home owners in Spain are liable for rates and a wealth tax, both
based on the value of the property.
These amount to approximately 200 Euros per year (for both).
Some properties, those built on urbanisations, are also liable for a maintenance (or community)
fee. If this is applicable, it will be made clear to you at the time of viewing the property.
Tax protection investments, offering protection from all taxes (including capital gains, rental
income, and inheritence taxes), are available from reputable investment companies. Contact us for details.
See our Frequently Asked Questions page for more information
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