Before you buy a property in
Spain, here are some important things
we feel you should know before you sell up, and jump into any Planes, Trains
or Automobiles and move to Spain with the spouse, 2.4 children 50 boxes (just
your essentials, we understand) and the pet dogs Fido
and Sparky.
Gone are the days when you could buy a three
bedroom house with a pool on 4 acres of land for £20,000.
In fact,
they went along time ago
(unfortunately long before I moved to Spain). Yes, there are cheaper properties around, but you'll have to modernise most
of them. Or of course look inland, you will be pleasantly surprised how
much you can save by being a 20/30 minute drive from the coast, the sun does
shine inland as well as on the beaches!!
Having said all of that,
buying property in Spain is as popular as
ever, with increasing numbers of people following their dream in
purchasing a holiday home in the sun, buying property to rent out or moving
to Spain
lock, stock and barrel to the sun. People obviously love the pleasant, healthy
climate and in recent years the Spanish local authorities have
made great efforts to increase the number of foreign tourists and
residents.
Now is a excellent time to buy property in Spain as European interest
rates are lower than the U.K. and there is a wide selection of property options
available, from developed plots, farmhouses and village locations,
through to villas, townhouses and new apartment developments.
Buying a property abroad is an exciting experience. However, you
must go looking for your home with an open mind. You'll soon
realise that it is virtually impossible to find exactly what you
want, so you may need to compromise on some issues. Using
qualified professionals will protect your interests, making the
purchase of your home in Spain a risk free and stress free
experience.
Before you move to Spain. Decide on a region - Spain is a very big
place. Consider the location first and foremost. Decide on a particular
town, village, development or hillside where you'll want to spend a lot of
your time, or even live permanently. This involves a whole series of
individual choices. Research the area to find out what it is like in
different seasons, what facilities are available and the travel times to
different places. And ask yourself, would you be happy living there?
Think about the
type
of property you are looking for - The area, size, number of rooms. But keep
an open mind. It could be worth looking at different types of properties in
different residential areas. By looking at a variety of homes you'll build
up your knowledge of the present market values in the area you are looking.
Speak to estate
agents - Only negotiate with those that are officially Spanish registered
Companies such as an S.L.(Sociedad
Limitada) (House on the Costa Blanca is an S.L.) or S.A.
(Sociedad Anónima)
What you'll need the house for will change
your considerations. If you're moving to Spain you may want somewhere
quieter, but if you plan to rent out the house you may want somewhere more
commercial area or perhaps closer to the beach etc. A good agent will
help you through the whole purchasing procedure.
Find a Solicitor
(abogado) (we at House on the Costa Blanca can help you find a
Abogado if you wish) to advise and assist you - Before you have decided on a
property to buy in Spain it is important to be fully aware of the legal
process and costs involved in your property purchase. Check your finances take account of these
additional costs (See
Costs). Whatever housing option you
choose, your solicitor should anticipate all
contingencies.
Moving to Spain Making an offer -
Get the agent help to make an
offer, confirm the details in writing with the Agent, covering all the
following points:
The Price
The Declared Price on the
escritura (title deeds) (yes there are two prices)
This way you only have to
negotiate once and there should be no hold ups.
The skill of the agent comes
into play carefully bringing the vendor and buyer into an agreement.
Having funds available at this
time will convince the vendor you are serious and not just fishing.
If you find a property that
you wish to purchase all agents WILL ask you to lodge a deposit on the
property, to take the property off the market, the amount will vary
depending on the agent, and whether the property is a resale or a new build.
Buying a Resale
property you will be expected to leave a
10% deposit with the balance
payable on completion.
As most of us don't carry
ten or twenty thousand (or more) euros around with us, the normal
procedure is as follows:-
Expect to leave a
3,000 EURO deposit, this
is to remove the property from the market.
Then you will be asked to
transfer 10% of the purchase
price (minus the 3,000 "holding deposit")
and as previously stated the balance is payable on completion.
Buying New Spanish Properties expect
between 10% - 20%, with 20% pretty much being the norm, also on
new property an additional 30% is expected to be paid
within about 4-5 weeks, OTHERWISE YOU WILL LOSE your deposit.
(These are constructors
requirements not the agents)
The outstanding 50% is payable on
completion.
Some Constructors insist on doing it the
old way, 3 or 4 thousand Euro basic deposit,
50% within 4 weeks (the 50% includes the
deposit money) OTHERWISE YOU WILL LOSE your deposit
another 25% when the roof is on, then the remaining 25% on completion.
When an offer is accepted - The solicitor takes the legal
responsibility for checking the land registry is all is well, that
the property is registered in the vendor's name and that it is free of any
mortgages, charges, encumbrances, debts or other liabilities. The solicitor
will then
prepare the public deeds (Escritura de Compraventa) for signature
in front of a Spanish Notary. Where the balance of the purchase
price is paid and vacant possession of the unencumbered property is granted,
the sale is completed.
We at House on the Costa Blanca,
S.L. also check with the land registry that the property is free of all
debts and encumbrances.
Example of a
"Nota Simple" (please note some
personal details have been removed for security reasons)
Click here...
Immediately after completion - The notary will fax details of the
title deed to the local land register to inform them of the identity of the
new owner. This will prevent the property from being sold twice. The notary
and the land register act together to protect and guarantee your interests.
Your solicitor can also arrange for the transfer to your name of utilities
and services such as water and electricity and organise their payment
through a local bank.
You will NOT receive a
copy of your title deeds for approximately three months.
Please Note ASK YOUR
SOLICITOR OR ESTATE AGENT to pick up a "COPIA SIMPLE" (we do this as a
matter of course).
A Copia Simple is a
"sample copy" of what you have just signed (it is NOT a photocopy, it
only contains the text of the Compraventa) but it will enable you to
sign on the padron, enable you to enrol you children at school, its
basically "temporary proof that you own the property"
**NB** When you sell a
property also ask a for a copy
Ask yourself these questions.
Do you prefer the town or country?
Do you want to be inland or on the coast?
Do you want to be isolated or in the thick of it?
(Most
people prefer to be within about an hour's travel time of a
town)
How much outside space do you want?
Private house or urbanisation?
How close do you want to be to your neighbours?
How close do you want to be to shops, bars and
restaurants?
Where's the nearest public transport, how often does it
run, what time does it end?
How far is the beach?
How far is it to sports facilities, golf, tennis, swimming,
etc?
How good are the local health & social services?
Arts and entertainment, what's available in the area?
Neighbours, what are they like and how much do you want to
see them?
Moving to Spain
Type of Property
Buying off-plan/new build
- These properties have yet to be built. Buyers purchase on the
basis of only seeing a show home or development plan. Advantages - you can
choose the perfect location and pick from a number of styles and designs
(both exterior and interior) to construct the villa/house that you would
like to live in. It's a more affordable option as payments for new builds
are made in instalments, with final payment after the finished building is
delivered. It can sometimes save you money, as once all the properties are
completed the value of the would have increased, from when you purchased
"off plan".
Disadvantages
- because payments are in instalments a substantial initial deposit is
required. This option can also take some time as you wait for the house
to be completed. Check future plans for the area.
Resale Properties - These are older houses that are up for
sale. Advantages - you actually see the finished product. The moving in
process could be as easy as buying furniture and arriving with your luggage.
A significant number of resale properties are sold with their furniture so
it could be even easier.
Disadvantages - you may have to compromise in other
areas. If the property requires work consider the maintenance or replacement
costs.
Urbanizaciones -
Beach-frontage for urbanizaciones is now at a premium. If you
decide to forgo a beach frontage, you should expect a lot more
inside and outside space for the same money. Advantages -
convenience, both in the process of house purchasing and
responsibilities of property maintenance. Facilities, ready-made
social contacts, greater security, lower taxes and the possibility
of owning a home in a location where fully detached properties are
hugely expensive. Disadvantages - community charges (although most
are very reasonable),
inflexible and restrictive community rules, difficult neighbours,
lack of space and privacy and lack of control over the future of
the development.
Villas - Detached, purpose-built holiday villas usually
found on the Costas. You'll pay more for a detached villa than for
a house of equivalent size and comfort on an urbanizacion.
Apartments - Usually built as holiday homes on the Costa
Blanca.
Advantages - these are usually the cheapest places to buy on the
coast. Disadvantages - offer limited comfort plus the flats are
often so reasonably priced because they're in the middle of resort
towns where noise could be a problem.
Town and village houses - Small inland towns and villages
have a lot of properties but limited outside space as groups of
properties tend to be clustered together. Advantages - the size of
these properties can be quite deceptive and tend to follow the
traditional Spanish decoration. Disadvantages - older houses may
require checking and new work with regard to wiring and plumbing.
Fincas - A plot of land or an estate outside of or
in-between towns and villages. Properties advertised as fincas can
run from tumbledown farmhouses to lavish modern villas. Advantages
- They are often on their own land in the countryside. Fincas
generally come with a substantial amount of land, which may include olive
groves and fruit orchards. Disadvantages - you won't be on the coast front,
and to find cheap land or run down properties you'll probably have to look
further inland.
The details set out below are
only intended as a guide
House on the Costa Blanca
are not responsible for any inaccuracies in the details given or any
difference that you might have to pay.
Exchange rates, Laws,
Taxes, Rules & Regulations can and do change
overnight. This just gives you an idea of costs that you might not already
know about, when moving to Spain.
Whatever you decide to spend on your home in Spain, allow about 10
- 11% on top for your costs
Breakdown of the 10 - 11%
EITHER - I.V.A. (VAT) on new construction - 7% of the contract
price (16% on land)
OR - Spanish Property Tax Transfer Tax (Stamp Duty) on resales - 7% of the declared
value
PLUS - Legal Fees - 1% approximately, Notary and Land Registry
Fees - 1% approximately, Title Deed Tax - 0.5% of the declared value.
Mortgage costs if applicable
Details
The preparation of the Escritura (Title
Deeds) and registration of the property with the
Spanish Land Registry,
two searches on the chosen property, for the solicitor
to act on your behalf for the conveyancing,
some solicitors will translate the deeds into
English, otherwise
you'll need the services of a translator.
The solicitor will also change the
electric, water and I.B.I (Local
Rates) over in to your name.
They should also apply on your behalf for your N.I.E.
number (Identification
number for non-resident).
N.I.E. numbers are obligatory
for all non-residents.
NIE number (Numero de
Identificacion de Extranjeros)
This is the fiscal identity number and is
essential to have for any financial dealings you may have in
Spain. This can take a few weeks to obtain, so plan ahead. It
involves filling in a form with your solicitor and you also need
to supply a colour 'passport' photo, a photocopy of your passport. The solicitor will then obtain your NIE number
from the local police station.
Banks
You need to set up a bank account if you want your home running
costs dealt with through direct debit. It's important to choose your
Spanish bank carefully as running costs vary considerably between banks.
We at House on the Costa
Blanca can help you set up your Bank Account.
A name you recognise from your
high street will probably have no relationship with a bank with the same
name in the UK. Find out from the UK bank if they have a relationship with
any Spanish banks.
Finance
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. You 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).
There are generally two levels of mortgage offered, one for
residents and one for non-residents. For non-residents the
mortgage offered is generally around 60-65% of the value,
for residents it is usually around 80% of the value of
the property.
We can help you apply for a mortgage in Spain, just as in the U.K. You will need to prove that you have an income or
sufficient funds to pay the mortgage. The level of mortgage
offered is directly dependent on your financial status and also
the value of the property you wish to purchase.
A Spanish Will
Property in Spain is subject to Spanish laws, so
it is strongly advised that you make a Spanish will, which costs
approximately 220 Euros. Your solicitor should be able to advice
you on this point.
Fiscal Representative
It is highly advisable for any person who has a
property in Spain but does not live there all the time to nominate
a "fiscal representative". This is a person to whom the tax
authorities can send all correspondence relating to your affairs
in Spain, secure in the knowledge that it will arrive. The fiscal
representative must be resident in Spain, but it is for you to
choose whom to appoint. It can either be a friend, a neighbour, a
lawyer, or your tax adviser.
Gestor
For facility management you can appoint a local 'Gestor'.
This person is like the official form filler who does the work for
quite reasonable charges. If you decide to live or work in Spain
your legal representative or Gestor can assist you with "residencias",
work permits, licences and permits in connection with the opening of new
businesses. They will also advise on importing cars, furniture and
electrical goods, and pets into Spain, obtaining payment of your pension in
Spain, national insurance and other related matters.
Living Costs
When living in Spain, you'll need to take the
following expenses into consideration
Urbanizacion and Community
Fees:
Controlled by the committee of owners and covering the running and
maintenance costs of shared facilities which can include private roads,
drains, lighting, private water supplies, gardens, swimming pools etc. These
costs are normally reasonably cheap, (typically around 20 Euros a month
depending on the number of properties)
Local Rates - Patrimonia
All non-residents have to pay wealth tax, 'Patrimonia',
based on the amount on the Escritura Publica or the Valor
Catastral, which ever is the highest value. Vary. 0.2% is typical.
Property Tax
The local town hall charge IBI on owned Property
(tax Impuesto sobre Bienes Inmuebles), which is an annual real
estate tax. This local tax varies and is based on the Catastral
value of the property.
Insurances
Fire insurance is compulsory by law when
taking out a mortgage. Comprehensive household insurance is
available to protect your home and contents. Life insurance
can be taken out to guarantee payment of the loan in the case of
death. 0.5% to 1% of value.
Water and Electricity
Utilities have a standing charge and the charges for consumption
are in addition to this. The costs are mush cheaper than the UK and Ireland,
and are payable every two months.
Telephone
The standard charge for a telephone line
installation from Telefonica is around 180 Euros. The line rental
and call charges are then payable every two months.
Fiscal Representative
(Gestor) to manage tax returns etc as a
non-resident in Spain (approx. 60 Euro)
Basura
BIn some areas you will have to pay the Basura (for rubbish
disposal) separately,
I am sure that those of you with animals
are well aware of the pet passport scheme, which has been in operation for a
while. Initially, there were quite a few teething
problems, which have been well documented.
The British, French and Spanish
Governments involved, are trying to eradicate silly errors, but each Country
in turn seems to keep changing the rules
The system is getting better
Joining the scheme is a
back up
SHOULD YOU WISH TO RETURN TO THE U.K. WITH YOUR PET
The Pet Travel Scheme (PETS) applies
to pet dogs and cats (including guide and hearing dogs) that are resident in
either the United Kingdom or one of the PETS qualifying countries.
Animals which meet the PETS rules can
enter (or re-enter) the UK without having to undergo 6 months quarantine.
Animals which do not meet all the rules must be licensed into quarantine.
They might then be able to obtain early release if they can be shown to
comply with the necessary PETS requirements.
Animals from non-qualifying countries
must spend 6 months in quarantine.
There are quite a few things that have to
be completed in a specific order
Also think of all how is the animal going to
be transported?
Are you going to be catching the ferry to
France or directly to Spain?
If you travel through France you will
require French paperwork as well as Spanish.
If you are going by ferry, TELL the
ferry company. Yes I know that they will make a small charge for your
Cat (about £12) or slightly more for a Sparky, but it's worth it... First of
all they will ask you to place a sticker on your windscreen telling the
loaders that you are carrying an animal.
Most of the time they will let you on
the ferry first. You will also be given instructions and TIMES when you can
visit your animal to feed, water, as well as excise him/her, whilst
you are on the ferry.
Remember when everyone leaves their vehicles
on a ferry, all of the doors are sealed for safety reasons, until the ferry lands at it's
destination.
But you the pet owner (you lucky thing) are allowed to
attend to your animal every four to six hours, (depending on the time of the
day/night).
Check at reception the moment you board
the ferry, they will give you the SET TIMES to attend to your pets
requirements.
"No I'll just fly the animal out" I
hear you say......... O.K. BUT
Check with the airline, because NOT all
carriers will transport your pets!
And some will only transport them to certain
airports.
List from DEFRA (Updated Oct 03)
Alicante to London Gatwick: Astraeus Cargo; Britannia Airways (Guide
and hearing dogs may be accepted in the cabin); GB Airways; Monarch Airlines
**Instead
of flying your animal out on any flight MONARCH are
now offering a new service allowing book your animal on the same flight as
you...
Please call
Monarch Airlines about this service on
(0034) 965419705 PLEASE
DO NOT JUST TURN UP - CALL FIRST
Alicante to London Heathrow:
bmi british midland Almeria to London Gatwick: GB Airways Arrecife to London Gatwick: Britannia Airways (Guide and hearing dogs
may be accepted in the cabin) Barcelona to London Gatwick: British Airways Barcelona to London Heathrow: KLM Cargo (via Amsterdam) Fuerteventura to London Gatwick: Britannia Airways (Guide and hearing
dogs may be accepted in the cabin) Girona to London Gatwick: GB Airways Ibiza to London Gatwick: Britannia Airways Lanzarote to London Gatwick: GB Airways Las Palmas to London Gatwick: Britannia Airways (Guide and hearing
dogs may be accepted in the cabin) Madrid to London Heathrow: bmi british midland (guide and hearing
dogs may be accepted in the cabin); KLM Cargo (via Amsterdam) Mahon to London Gatwick: Britannia Airways; GB Airways Malaga to London Gatwick: Britannia Airways (Guide and hearing dogs
may be accepted in the cabin); GB Airways; Monarch Airlines Malaga to London Heathrow: GB Airways Murcia to London Gatwick: Astraeus Cargo; GB Airways Palma, Majorca to London Gatwick: GB Airways; Britannia Airways
(Guide and hearing dogs may be accepted in the cabin) Palma, Majorca to London Heathrow: bmi british midland (Guide and
hearing dogs may be accepted in the cabin) Seville to London Gatwick: GB Airways Tenerife North, Canary Islands to London Gatwick: GB
Airways (from 30/10/03) Tenerife South, Canary Islands to London Gatwick: Astraeus Cargo;
Britannia Airways (Guide and hearing dogs may be accepted in the cabin); GB
Airways Valencia to London Gatwick: GB Airways
Pet Passport Scheme
As I have stated
previously THESE RULES AND REGULATIONS CHANGE ALL OF THE TIME.
BE WARNED YOUR ANIMAL'S
CHIP WILL BE CHECKED BEFORE YOU LEAVE
THE U.K. AS YOU
BOARD THE FERRY
Please ensure you buy a
cage large enough for your pet, it is going to be it's home for quite a
while, especially if you are doing the 23 hour crossing directly to Spain
(summer time only)
Have a SAFE Crossing...
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