You are buying a property in Spain. Therefore all matters relating to this purchase are subject to Spanish Law. It is therefore essential to appoint a solicitor who is competent in all aspects of Spanish Law and can communicate in Spanish and English. Do I sign the contract before checking with a solicitor? The contract is a very important document. We advice that you speak with us before you sign. If you fail in any of the payments you would be in breach of the contract and could forfiet the money you have paid. What can I expect the stage payments to be? This depends on the contract but a typical contract will be as follows: For New Builds For Resales €3000 on signing the contract €3000 on signing the contract 30-40% after 30 days 10% after 30 days Balance on Completion Balance on Completion What are the expenses incurred when buying a property? E.G. Price of Property € 200,000 Tax @ 7% € 14,000 Stamp Duty @ 1% € 2,000 Notary Fee € 1,000 Land Registry € 300 Utilities € 300 Solicitor Cost @ 1% € 2,000 Total Price €219,000 When do I pay the expenses? The tax, land registry and the notary on completion. Our services are also free until completion. How do I get finance to buy the property? It is possible to raise finance to assist with the purchase of a property. This can be done in the UK if you have an existing mortgage or in Spain. Having a mortgage arranged in Spain can lead to benefitting from tax consessions. We have established excellent links with most Spanish Banks. Ask for further information. What are the total costs involved in getting a mortgage in Spain? Please allow approximately 3% of the amount borrowed How do I open a Bank Account in Spain? All you need to open an account in Spain is your passport. There is no need to deposit any money to open the account How do I transfer money into my overseas account? It is possible to transfer monies directly from your European Bank to your Spanish Account. We have excellent contacts with renowned foreign currency companies who may offer more favourable rates of exchange and quicker transfer times. Remember, it can upto 10 days to transfer funds from the UK to your Spanish account. Is there a survey carried out on the property, structure and foundations? If you are buying a new property there will be a 10 year builders guarantee and certificate from the architect. If you are buying a resale property a survey is not carried out to check the condition of the property, however, this can be arranged if you require. What are the guarantees from the builder? Bank guarantees or insurance policies should be arranged when paying monies for a property under construction. There are statutory provisions for the builders to guarantee the payments for the property whilst building is in progress up until it is completed (Spanish Laws L38/1999 & L57/1968) After this the property has a guarantee against defects for 10 years. What happens if the builder goes bankrupt? If the builder goes bankrupt and you have a bank guarantee in place you will have your payments refunded. If you dont have a guarantee then you will lose your money. Do I need to be present to obtain an N.I.E. number? No, in fact, for convenience, we recommend you leave us with power of attorney to obtain your NIE number on your behalf. Do I need to be present for completion? No, not if a power of attorney is in place. When do I get the keys to the property? You are given the keys to the property on the same day that you sign the title deeds at the notary´s office When do I have access to the Property? On the day of completion when you have received the keys Who is the Notary and who attends on the completion day? The notary is a public official who oversees the signing of the title deed and records it on public record that it is understood by both parties and signed in their presence. Everyone who is involved with the sale or puichase of the property attends. e.g. Seller, buyer, bank manager (if mortgage is to pay for purchase) Solicitor and Notary. Who holds the deeds to the property? In Spain, you, as the owner hold the title deeds. We will of course, keep these for you for safe keeping What are the yearly running costs for owning a property? Approximate amounts are:- Council Tax 400€ Wealth Tax 500€ Community Fee (if property is on urbanisation) 300€ How do I pay these taxes? We as your fiscal representatives will do this for you, in addition, we will organise and take care of all your tax returns Who should be the owner of the property for tax reasons? There are a number of ways to purchase a property, each having advantages and disadvantages. What is best for you can depend on circumstances. We will be happy to discuss this with you and advise on your options. e.g. In your own name In the names of your children In joint names ie your spouse in the name of a limited company Do I need a spanish will? If you do not have a Spanish will then your inheritors will need to contact the British Authorities making the process long and expensive. If you have a Spanish will then the process takes place in Spain and will generally be cheaper and easier. We will advise and help you make a spanish Will. What is the inheritance tax on a property? Any indiviual legacy under 16000€ is exempt from tax. Therefore, each inheritor of a property only pays tax on their share over 16000€ . We can advise on the specific details of this and how you can minimise your tax liability. What are the capital gains taxes when I sell a property? Residents pay a maximum rate of 15%. Their capital gains is calculated as part of their Spanish income tax. Non residents pay a flat rate of 35%. If you are over 65 years, have lived in Spain for 3 years and have residency then you are exempt from capital gains tax. How do I become a Resident? If you intend to live in Spain permanently or to spend more than 6 months each year here you are expected to apply for residencia. We can assist with this application. What is wealth tax? For non residents this is an annual tax based on Spanish assets only, with no exemptions. Do I have to pay income tax? Residents are taxed on a sliding scale from 15% to 40%. Non residents are taxed at a flat rate of 25% Who pays the sellers tax? The buyer is required by Spanish law to pay 5% of the purchase price to the tax office to cover the sellers potential tax liabilities. This does not increase the purchase price, they just pay 95% to the seller and 5% to tax office. We will arrange for this. This process is not complicated but for your peace of mind should be carried out by a qualified Spanish Solicitor and Fiscal Representative The Conveyancing Process - Outlined .... 1.The Writing of the contract 2. Certificate from the Land Registry 3. Payments and Bank Guarantees (new builds) 4. Preparing Power of Attorney 5. Pre Completion Checks 6. Obtaining your NIE number 7. Completion 8. Inscription of ownership in the land registry 9. Paying Taxes 10. Transferring Utilities into your name 1.The Writing of the Purchase Contract The first step is to sign a private purchase contract (Contracto Privado de Compraventa) between the two parties involved. If you are purchasing a new build property this will between you and the builder. If. A reslae property then this will be done between you and the owner of the property or his agent. The Contract should contain the following: - Full description of the two parties - Full description of the property If a new property If a resale property Plans of the property. Price of the property Specifications of the materials. Stage payment details Plan of the site and building permission We can check that all the relevant details are correct and explain all to you before you sign. 2.Certicate from the Land Registry & Report We will carry out a land registry search to clarify that everything stated in the contract was correct Establish the current ownership Check property is free from debt and other charges Building permission 3.Payments and Bank Guarantees(New Build Properties) For each stage payment that you make we obtain a bank guarantee from the builder. This means that if the builder goes bankrupt before completion you would not lose your money. 4.Preparing Power Of Attorney We will ask you to give us power of attorney. This is a simple process that enables us to complete work for you without you being present. Nothing would be done without your consultation first. This can be very useful for N.I.E numbers and completion. 5.Pre Completion Checks Prior to completion we will make further checks to ensure ther are no debts or other charges outstanding which you could inherit. Eg Council tax, electricity & Water and community charges. 6.Obtaining Your N.I.E Number This is a fiscal identification number and is required to pay taxes before you make any transaction in Spain including buying a property. We will apply for your N.I.E number on your behalf using the power of attorney. 7.Completion On completion we exchange the balance of the price, ownership and keys of the property. This takes place at the Notary´s office. If the property is a new property we also check that the builder has issused a 10 year guarantee for any damages on the building and certificate from the Town Hall which certifies that the property is habitable. If you have not provided us with a power of attorney we will help you obtain your N.I.E number before completion and assist you at the Notary´s office 8.Inscription of Ownership In the Land Registry After signing, we will present and register the notarised deed (Known as the escritura) at the local land registry. The Land Registry maintains all the details of the property and records financial charges and other matters that may affect title. Registering the deed provides the highest public level of protection 9. Paying Taxes From the day of signing we have a maximum of 30 days to pay the tax on the property. We will arrange for this with you. 10.Transferring Utilities Into Your Name We will change the water and electricity supplies into your name |