Buying Guide for Property in Spain
Click on one of the links below or scroll down the page.» Buying Spanish Property
» Appointing a solicitor (abogado)
» NIE Identification number
» Applying for a Bank Account
» Applying for a Mortgage
» The Notary(Notaria)
» Purchase Taxes and fees
Buying Property in Spain
Once you have decided on the particular property you wish to purchase
and a price has been agreed then it is usual for a private contract
to be drawn up by your lawyer. The contract will state the terms of
the purchase but typically this will involve a reservation deposit of
between 3,000 to 5,000 euros to take the property off the market closely
followed by a further deposit of 10% of the purchase price. This 10%
deposit effectively locks both the buyer and seller into the deal and
consequently gazumping is rare in Spain. The remaining 90% of the purchase
price plus applicable fees is payable at completion on the signing of
the title deeds before the Notary.
If you are purchasing a new construction then the constructor will ask for stage payments to be made on the property. These can vary dependent on the constructor and the length of time remaining to completion of the construction.
Appointing a solicitor (abogado)
We suggest that it is very important for you to appoint a good solicitor
when buying property in Spain, many problems often highlighted in
the UK press could easily be avoided by simply using a good solicitor.
They will be able to do the necessary searches and check out any outstanding
debts that may exist on the property as well as help with contracts
and NIE numbers. They will also check the legal paperwork and make sure
the property has the required permissions. You are free to appoint a
solicitor of your choice, or if you prefer we can recommend one.
Once the searches on the property are satisfactorily completed the deposit (usually 10%) will be paid and a completion date will be agreed in accordance with the terms and conditions of the contract. The next step is for the title deeds to be signed by both the buyer and the seller before the Notary on the day of completion.
NIE number (Numero de Identificacion de Extranjeros)
It is essential to have an NIE number for any financial dealings you may have in Spain, including buying Spanish property. Obtaining an NIE number is a simple process that will normally be dealt with by your solicitor at the same time you make your purchase and the price for this is generally included in the fee for the conveyancing. However, you can apply for one separately via a Gestor (fiscal representative) who will normally charge around 30 or 40 Euros or we can make the application for you for 20 euros.
Applying for a Bank Account
Opening a bank account in Spain is very easy indeed and our finance manager will assist you if you have questions or need help. All you need to open an account is your name address and copy of your passport - it usually takes about 10 to 15 minutes and you get an account number there and then. We can recommend banks that we feel offer the best service - we can even open the account for you if you prefer to let us handle it. It is important to check the rates for transferring large sums as some Spanish banks charge ludicrously high fees for these types of transaction.
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 quite a bit lower than in the UK, currently around 3.5 % but the arrangement fees and government taxes are much higher than in the UK - typically it will cost you 3% of the amount borrowed to set up the mortgage. For non-residents Spanish banks will normally lend up to 70% of the property value (not the purchase price). You will need to prove that you have sufficient income and you will also need to put down a minimum 20% to 30% deposit. Although the initial setup cost is a bit steep it is very simple to arrange a Spanish mortgage - all we require is three things:- 1. a copy of your passport 2. proof of income (can be flexible) and 3. a valuation of the property. No application forms and no hassle and the mortgage funds can be available in as little as ten days from the initial application.
Another option is to simply re-mortgage your home in the UK if you have sufficient equity. We can arrange for a consultation with a fully qualified and independent mortgage advisor if you would like to discuss your options.
The public Notary is appointed by the Spanish government to witness
the signing of all legal public documents. In this case the title deeds
(escritura) of the property. He represents both the buyer and the seller.
The Notary fees are around 1% of the purchase price of the property
and must be paid at the time of the signing of the deeds.
The Original signed document is retained by the Notary who will apply for a formal change in the land registry. The purchaser 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.
Purchase Taxes and fees
The amount you have to pay in fees will vary depending on a number
of factors and will vary between around 7% to 11% depending largely
on the declared value of the property and whether or not you are having
a Spanish mortgage. We will provide a full breakdown of all fees prior
to your purchase.
If you are purchasing property in Spain we suggest you consult with a professional financial adviser beforehand to discuss any possible financial/tax implications regarding Spanish or UK income tax, capital gains tax or inheritance tax.
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The above information is intended to outline in brief the current procedures and is intended as a guide only and in no way as a substitute for professional advice.