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Buying a property in Spain is an exciting and life changing event for so many of our customers, and for most it is a dream that they have been working towards for many years.
Whilst viewing property and soaking up the glorious Spanish sun, it can sometimes be easy to forget the more serious side to purchasing property overseas. Well, let’s be honest, who can blame anyone for getting a little carried away when they find the property of their dreams?
So whilst it may sound like we’re bringing our customers back down to earth with a bump, (we’re absolutely not, we promise!) we’re just as excited as them! There are some serious matters that need to be fully understood when purchasing a property in Spain, and it is our job to remind customers of those matters, ideally before they even arrive in Spain.
For example – Are you aware of your obligations of owning a property in Spain? Spanish Wills? What happens at the Notary? What are the related taxes & costs when purchasing in Spain? Whilst there is nothing to dampen your spirits or take away from the dream of owning your own home in Spain, these are matters that you should be advised of well ahead of purchasing.
We believe that the obligations of owning a property in Spain must be fully understood by our customers before the search for property even begins. So when you do find that perfect property, there are no bumps in the road. Our 'Top Ten' this week is focused on the purchase process, so here are our suggestions & tips on those matters that we help our customers with along the way...
1. THE FIRST THING TO CONSIDER – LEGAL ADVICE
When customers speak to us & tell us that they are looking for property in Spain, the first thing we advise them to do is to speak with an independent solicitor.
WHY IS THIS?
If you’re going to be a homeowner in a different country, you really need to know what you’re obligations are going to be. An independent solicitor will also guide you through the process of purchasing the property, including obtaining NIE numbers, opening bank accounts, & making a Spanish Will.
WHY AN INDEPENDENT SOLICITOR?
The reason why we suggest using an INDEPENDENT solicitor, is so that the solicitor is not associated with any agent, including us, they are working solely for & taking care of you, the customer.
2. THE PROPERTY - WHAT ARE YOU LOOKING FOR?
It is so important for us to understand exactly what our customers want from their property in Spain.
For example - Will you be using the property as a holiday home? / Will you be looking for a property with great rental potential? / Are you planning to live in Spain full time, will this be your permanent home?
We like to understand all of the details that you want from your dream property in the sun so that we can do our very best to try and find it for you from our vast portfolio.
3. LOCATION, LOCATION, LOCATION
We have many customers that know the exact location in Spain that they want to purchase a property in, but we also got a lot of customers that are still trying to decide where they want to purchase. Just like with understanding what you want from a property, it is very important to think about what you are looking for from a location too.
Do you want it to be a lively, thriving place all year round? Are you looking for a traditional, Spanish lifestyle in a small village? Do you want to be in an ex-pat community? Is it important for you to be near the sea? How about golf courses? Do you need to be close to schools, etc...
There is a lot to think about isn’t there...
4. THE BUDGET
How much are you looking to spend on your property in Spain? To make it easier, we suggest clients stick to calculating it from a Sterling perspective.
We also suggest that you work out how much you want to spend on the whole project, so that is including the property, the taxes, purchase and legal fees (around 13-15% of the purchase price depending on the region).
(See Point 5 below for more details on this)
5. THE PURCHASE COSTS -
It’s important to know the cost of purchasing in Spain, and by speaking with an independent solicitor you will be fully ‘in the know’ about all of these, meaning that you will be aware of how much these costs will be from the very beginning.
These costs include –
Legal Fees (Conveyance Fees) / Land Registry / Notary Fees / IVA or ITP (Spanish Purchase Tax)
Depending on whether you are purchasing a new build or re-sale property various other taxes & fees can apply.
To find out more, and for an estimation of these costs please contact us for an in-depth look at purchase costs.
6. MORTGAGE INFORMATION -
Spanish Mortgages are available to non residents, currently at 65/70% Loan to Value/Purchase price (whichever is the lower,) & subject to status.
Generally speaking the set up costs need to be factored in are anywhere between 2-5%, depending upon the amount borrowed. Also the purchase costs will need to paid as well as the deposit on the property as the banks will not roll these costs into the borrowings required.
Banks do offer 100% mortgages to Spanish residents, and to non residents on some developments, this is not normal practice though.
7. CURRENCY - CHANGING YOUR MONEY -
When it is time to complete on the purchase of your dream home in Spain, it will be in euro's.
Ideally as a 'Your Place in Spain Ltd' client you will have spoken to a currency broker so that you are aware of how market fluctuations can affect the cost of your property.
It is important to understand that as the rate changes, the cost of your property purchase can too, & this can in some cases, be a considerable amount of cash.
We do recommend using a currency broker rather than a high street bank as massive savings are available, click this link to understand more about this.
8. GOING TO THE LOCATION & VIEWING PROPERTY –
Once you are ready to actually view property, it is time to fly to Spain, to your chosen location & view an organised portfolio.
We think it is more comfortable & relaxed for our customers to fly out to Spain under their own steam, and to get to their hotel/rental property first before starting the viewings.
Once you are settled in, the viewings can commence...
9. PURCHASING A PROPERTY -
You’ve viewed the portfolio, (and in many cases one or two others that have been added to the mix whilst you’re there) and you have found ‘the one.’ You have made an offer on the property & it has been accepted.
At this point your independent solicitor should check the Reservation Contract to ensure that all is correct. In the event of anything not being as it should be, this also ensures that any moneys paid will be refundable
The legal team should then guide you through the rest of the process, including -
Obtaining your NIE numbers / Opening bank accounts / Preparing & translating documents for you to sign / Arranging payments / Organising all final arrangements of the purchase
10. YOU'VE PURCHASED A PROPERTY IN SPAIN - NOW WHAT?
Once you own your property in Spain, the legal team should once again be on hand to direct the following –
Making sure all utilities are transferred into your name / Ensure all arrangements have been made for you to pay necessary property taxes / Inheritance & Wills
These 'tips' above are to be taken as a guide of what to expect and what to be prepared for when you start your search for a property in Spain.
A large part of our service here at Your Place in Spain Ltd is talking to our customers to make sure they understand the whole process of purchasing. We're here to talk you through every step, and in a way, hold your hand through the journey.
We're here to help, and if you'd like us to give you a call and talk you through the process of purchasing in Spain, or if you would rather pop into our showroom to discuss your plans for buying in Spain, then you can find our contact details here.
You know what they say... "Knowledge is power!"
Be in the know, buy safely. Talk to us today.
Joanne Lynsdale, Your Place in Spain Ltd