Property Buyers Guide
Buying a Spanish property should not be much different from buying a property in the UK except that there is obviously a difference in the language and a number of other rules and regulations you have to be made aware of. By choosing VIP you will have access to the best advice and the best selection of quality properties available. You'll also have a peace of mind knowing that as part of our promise we offer advice on choosing the best areas allowing you to compare prices, local services and quality of life.
As travel to and from Spain becomes more accessible and inexpensive it is possible to have a holiday home in a superb location that is near enough to visit at weekends and the attraction appeals to many people that want to arrive and simply relax or pursue other outside interests they may have. Now there are mobile phones, faxes and the internet, a large number of people are no longer needing to work nine to five from a fixed location but can relocate their business overseas.
Investing your money in property in Spain makes an interesting and viable alternative to bank accounts or even a pension fund. If you choose carefully, your property will gain in value and provide a reasonable return whether you rent it or use for your own purposes.
PRIOR TO VIEWING
Before venturing to Spain you should make sure that you have sufficient funds to cover the reservation sum for you property. Once you've found your ideal home you simply reserve the property with a Reservation Deposit which is usually €3000 Euros and is usually paid by credit card. The deposit is refundable if the vendors change their mind but is not refundable if you cancel. Paying the reservation deposit secures that property at the agreed fixed price and actually takes the property off the market and makes it unavailable to anyone else. The further payment schedule can then be agreed to suit you and the vendor and will be written into your contract.
CHOOSING A PROPERTY
It is strongly advised to consider the regularity that you will use the property. Things to think about are the distances from airports, could you rent it out and is it a long term investment? Our property advisors will be happy to help you with this. Work out your budget and remember to add 10% to the buying price to cover the fees that come with buying a property. These are made up from Land Registration, Notary & Legal Fees, VAT (IVA) and general closing costs etc.
APPOINTING A LAWYER
If you haven't previously appointed a local lawyer, as part of our VIP service, we will arrange one for you. All our Lawyers (Abogados) are English-speaking and registered with the Spanish Law Society (Colegio de Abogados). Choosing the right lawyer is your guarantee that Spanish Legal requirements are met and that the property is genuinely registered in the vendor's name and is free from any mortgage, charges or restrictions. Your lawyer will negotiate and discuss the purchase terms with the vendor's lawyer and as well as the agreed price will include all your other requirements such as fixtures and fittings, the completion date and your preferred method of payment.
A lawyer will ensure that all Spanish legal needs are met and that you buy your property free of charges, encumbrances, debt or liens and is up to date with all its payments of community charges and local contributions etc. Lawyers will tell you in advance what their fee will be this is usually 1% of the purchase price. Using a lawyer from home will increase your legal costs and more than likely delay the sales process. There are many excellent lawyers in Spain who speak fluently in your language.
They will explain the procedures for buying in Spain and all the associated costs and you will not part with any funds until they are completely satisfied with everything. From now on, up to, and even after completion of the purchase, our support staff and your lawyer will take full responsibility for the entire transaction, advising you, and keeping you up to date every step of the way. Your lawyer can also arrange your residency application, NIE and Spanish bank account if you have not already done so.
EXCHANGE OF CONTRACTS
When your offer has been accepted the next step is to exchange contracts of sale or to sign an option to purchase. This usually happens within two weeks following the formal acceptance of the offer and you will usually receive the Private Purchase Contract at your home by courier. Your lawyer would have carried out his searches and investigated the property and arranged with the owner the procedure for cancellation of any outstanding debts. The private contracts reflect all the agreed terms of the offer and the date for the final completion with the notary. At this stage you will be expected to make the first payment in accordance with the contract which is non refundable.
COMPLETION WITH THE NOTORY
Your sale is formally completed when the public title deeds of purchase are signed in front of a notary, the final payment is made, and possession is given to you. On the day, you (or your duly authorised Lawyer) and the seller will attend the notary’s office to sign the title deed. At this point the remaining balance is paid and possession passes to you the buyer with the handing over of the keys.
NOTORY
The Notory does not act for either party and does not replace the need for a lawyer, he/she is required by the Spanish law to witness the payment of agreed money and the signing of all the relevant documents. The role of this person is to ensure the purchase you are about to make is legal and meets with certain laws laid down by the Spanish Government. They will check the deeds to ensure that both parties are represented correctly and that the ownership will pass to the buyer upon completion. The Notory will also instigate a second search on the property minutes before the deeds are signed.
POWER OF ATTORNEY
If you are unable to return to Spain for the completion of the property, you can alternatively arrange to give power of attorney to your lawyer who will act on your behalf, the cost of the power of attorney is around 181 euros. The document will have to be signed before the Notary.
CONVEYANCE
On the morning of the conveyance you will have to visit your bank for collection of your money, which you should arrange prior to date arranged. When you have completed all transactions at the bank, your lawyer will assist you in checking the property. If you have left power of attorney, he/she will check the property on your behalf the morning of the conveyance and collect the keys.
When you sign title deeds in front of the Notary you are now the proud owner of your new home and take possession of the keys.
LAND REGISTRY
This is where the deeds are inscribed. The original copy of the deeds once in front of the Notary, are taken here by your lawyer to be transferred into the buyers name. A legal copy will be given to the buyer once the deeds have been registered. This procedure takes around 6 months.
TRANSFER, INSURANCE & STANDING ORDERS
When the conveyance is completed your lawyer will ensure that the electricity, water and rates are transferred into your name and set up standing orders with each company. Building and contents insurance is highly recommended, your lawyer can arrange this for you.
WILLS
Regardless of if you have made a will in the U.K., it is strongly advised that you make a legally notarised will in respect of your assets and property in Spain. This ensures you and your family are protected should the inevitable occur. Your appointed lawyer will be able to aid you in making a Spanish will which will then be prepared and translated, and signed in front of the notary, at a cost of around 210 euros per person.
The original copy is always kept at the Notory’s office or at one of his successors; this avoids risk of loss or theft.
Additional to this the Notary sends a report to the Ministry of Justice notifying that the will has been made, without disclosing the contents. The record is kept secret until the death of the testator and at this time, you can know what the deceased's last official will contains, therefore avoiding any errors that could later prove serious.
INLAND REVENUE
When leaving the U.K. you MUST contact the Inland Revenue. They will ask you to complete various forms relating to things such as tax, social security, health care etc. If you explain that you are going to be moving to Spain they will provide you with all the relevant information that you need, there number is 0845 302 1476
DSS
It is also worth while to contact the DSS as they will do the same as the Inland Revenue the number is 020 7712 2171
REGISTRATION
When the title deeds have been signed, the notary will fax a copy to the local land registry. Your lawyer will arrange payment of all the transfer taxes connected with the purchase and will handle the registration of your title deed’s which could take up to two months. He/she will also arrange for the transfer of accounts with local suppliers of utility services, such as electricity and water, and set up their payment through a local bank.
THE FEES
Legal fees are usually around 1% of the purchase price, plus the IVA which is the equivalent to our VAT.
NOTORY FEES
This is fixed by law and normally range from 300 euros for smaller properties and 1200 for bigger properties.
LAND REGISTRY
To register your property at the Land Registry Office it should cost you around 20% less than what you pay for the Notory’s fees.
CONNECTION CHARGES
You will get charges for connecting to the Electric, Drainage and Water etc.
PLUS VALIA
his is a tax based on the officially assessed increase to the value of the property from the last time the property changed hands. The tax is normally payable by the seller, but in some cases the buyer pays, especially if it is a newly built property. You will find out who pays this when you discuss the negotiations with your lawyer. This tax is required by the Town Hall and is in accordance with Spanish Laws.
