How do I buy a property in Spain?
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If you are looking to buy a property in Spain, firstly choose a reputable
agent. Good real estate agents will help your search to buy a property in
Spain by helping to shortlist suitable properties based upon your chosen
criteria.
Secondly, arrange a visit to look at property in Spain. If you see something
that you like and decide to purchase, you will need to pay a reservation
deposit. This places the property OFF the market and FIXES the price. This
is crucial in the rising Spanish property market.
We always advise you to seek the help of an English speaking lawyer in
Spain. The lawyer will guide you through the process in two ways. Firstly,
before signing contracts for your Spanish property, the lawyer will ensure
that the property you intend to buy is free of any debt and that the
property (or land on which the property will be built) is legally owned by
the vendor. Secondly, the lawyer will check that you purchase the actual
property that was described in your contract. This removes any doubt or
confusion at the time of completion.
During the buying process, you will be advised by your lawyer to send funds
to pay for the purchase of your property in Spain. With off-plan purchases,
the payments may be spread over many months.
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I want to
buy a property in Spain. Will my money be safe?
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When you buy a property in Spain, we advise you to send your funds through
to the lawyerīs client account. By doing this, you are giving an element of
control to the lawyer, but also allowing him/her to thoroughly check all the
paperwork before handing over any of your hard-earned cash to a developer or
vendor. Only when you and the lawyer are entirely happy to proceed with the
purchase of your Spanish property, will the funds be transferred.
When you buy off-plan property in Spain, your lawyer will need to check that
the developer has bank guarantees in place. Although this is now a legal
requirement in Spain, you still need to check. Effectively, the bank
guarantee is an insurance policy so that in the event of the developer going
bankrupt or disappearing with your funds, you have a legal remedy to recover
those funds plus interest.
HSC only showcases the Spanish property of those developers with bank
guarantees in place.
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Do I need to
use a lawyer to buy a property in Spain?
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Yes. Some buyers insist on trying to manage their own conveyancing. This can
be difficult enough in your home country, but when buying property in Spain,
we really wouldnīt advise it.
Some buyers of Spanish property choose to use a firm of lawyers based in
their home country. We have found that this can be expensive, especially if
that lawyer is simply going to ask for the help of a lawyer in Spain to do
the work. In effect, you could end up paying twice for the same service.
We can provide you with a list of local English speaking lawyers in Spain
that have helped many clients in the past. They are independent of agents
and developers, and you are welcome to use the lawyer of your choice.
Lawyers in Spain operate in a completely different judicial system to the
one that you are probably familiar with at home. This doesnīt mean that it
is any better or any worse. itīs just different.
The lawyers can check all of the paperwork before sending your funds to a
developer or vendor, they can negotiate critical elements of a Spanish
property purchase and alert you to any problems or matters that need urgent
attention.
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I need to transfer my funds in Euros to pay for my Spanish property. How do
I do this?
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When you buy a property in Spain, you will need to pay for the purchase in
euros. If you are transferring money from a sterling account, it is
obviously in your interests to try and obtain the very best conversion rate
possible. Many people believe that they can obtain the best rate from their
banks, but the most competitive rate often lies elsewhere, for example with
a specialist foreign currency provider. HSC can provide you with details and
put you in touch with these companies, and the process is thereafter
relatively straightforward.
You will need to provide details of how much money you are looking to
transfer to Spain for your Spanish property purchase, the details of the
destination account, and you will then be given the best rate available and
asked to transfer the sterling equivalent to the exchange company. You may
even be able to specify a rate that you are looking for, and instruct the
exchange company to deal only once that rate is reached. In addition, you
can order currency for future payments at a pre-determined rate, thereby
safeguarding against any future exchange rate fluctuations.
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Can you explain the meaning of buying property off-plan in Spain?
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Buying property off-plan in Spain simply means that you secure your property
purchase before it is actually built. There are several advantages to buying
Spanish property in this way:
In a rising market like the Murcia property market, it normally means that
you pay a cheaper price than somebody who buys a similar property in Murcia
on the day of completion.
In popular areas of Spain, there is often a rush to secure the best units on
the best developments, so by buying off-plan you can normally secure the
properties with the best locations, views etc.
When you choose to buy property off-plan in Spain, you can spread your
payments. Rather than having to find the purchase price in one installment,
the price of the property can be paid in staged payments during the course
of construction.
The property will be brand new when it is completed, ready for you to enjoy.
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I have heard of people making a fortune by buying and selling property
off-plan in Spain. Is this really possible?
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Yes it is, but you need to tread very carefully. Many people in the past
have made large sums (over 100% return within 2 years) by buying Spanish
property off-plan and then re-selling prior to completion. This is done by
paying a small percentage of the purchase price prior to completion, but
benefiting from the rise in the ENTIRE price of the property during
construction. Many of the costs of completion are also avoided.
There are no guarantees that you will be able to re-sell your property in
Spain prior to completion, so you will need to choose your investment
location very carefully. Once you have done this you will need good advice
on which unit(s) to purchase (i.e. to be able to re-sell). A number of
factors will need to be considered, such as position, orientation, number of
bedrooms etc. You should also be looking to invest at the lowest possible
price point on a particular development and you should also be looking for
the very best payment terms available. These financial factors should
provide you with sufficient margin to offer flexibility when it comes to
determining the price when you choose to re-sell your property in Spain.
This site will alert you to any potential investment opportunities for
buying property in Spain. Simply register on the homepage to receive our
investment alerts.
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My property in Spain is due for completion. Is it ok to turn up on the day
of completion to occupy the property?
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Feel free to turn up, but itīs highly unlikely that you will be able to stay
in your property in Spain at that stage. The day of completion is that day
on which you legally become the owner of the property by signing the title
deeds. However, the water and electricity supply has to be connected, and
this can only be requested once you have your title deeds. Therefore, there
is very often a short delay before your Spanish property becomes properly
habitable. Wait for your lawyer to give you the go-ahead.
You do not have to appear in person to sign the title deeds for your Spanish
property at the Notaryīs office. You can arrange for your lawyer to do this
on your behalf by arranging a power of attorney from your home country. This
is often a blessing in disguise, as completions rarely take place at the
exact time appointed. In fact, some can even be delayed by a day or two!
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I keep hearing about Community Fees relating to property in Spain. What are
they?
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If you buy a property in Spain that forms part of a community of owners
(i.e. if you buy a villa or apartment within a development with communal
areas, such as pools, gardens, pathways etc) you will need to pay community
fees.
The cost of running and maintaining everything within the community (but
outside of your own property) is shared between the owners on a
proportionate basis. So if you own a 3 bed penthouse with 200m2, you will
pay twice as much as me if I own a property with 100m2.
Charges vary, depending upon expensive items such as security and the number
of properties sharing the cost. The community fees for an owner on a
development with 30 apartments employing 24 hour security guards are going
to be substantially higher than an owner on a development of 250 apartments
with no guards and no pools.
Spanish property developers hand over a community to the new owners and then
the owners have a meeting to determine the following years budget.
Everything is done democratically, a president and vice-president are
elected, and everyone has a right to vote on the issues, either in person or
by proxy.
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How do I arrange the electricity and water contracts, open a bank account
and arrange property insurance for my Spanish property?
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Donīt worry too much about this. Often these matters can sound daunting when
you are hundreds of miles away. Normally, your lawyer will be able to do all
of this on your behalf. Direct debits can be arranged for the utility
contracts and insurance for your property in Spain, and bills can be sent to
your home address.
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I am buying a Spanish property. Do I need to make a will in Spain?
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We always recommend that you draw up a Spanish will, as this will offer you
and your loved ones protection of your Spanish assets in the event of death.
Your lawyer should be able to help with this for a reasonable fee.
Your homeland will should cover global assets, but the process will be far
faster and less contentious if you also have a will in place for your
property in Spain.
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I am thinking about buying a property in Spain. Is it easy to arrange
mortgages in Spain?
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It is relatively straightforward to arrange a Spanish mortgage. Currently,
mortgage interest rates in Spain are very low, although there are certain
costs that should be taken into account when you take out a mortgage in
Spain, such as stamp duty and notary fees for the mortgage itself, as this
requires a separate deed.
The mortgage market in Spain was relatively unsophisticated until recently.
The competition for business has seen the introduction of a number of new
Spanish mortgage products such as interest only, fixed term, self-cert etc
which are proving very popular with investors. Take a look at the mortgage
calculator on this site for illustrations of capital and interest repayment
mortgages.
For non-residents looking to buy property in Spain, most lenders in Spain
will advance between 70% and 75% of the VALUATION of the property at
completion. In a rising market, and by buying off-plan property in Spain,
buyers can sometimes effectively secure close to 100% financing at
completion due to the rise in value of the property during construction.
If you require a personalised quote, or would like detailed information on
Spanish mortgages or equity release in the UK, simply drop us an e-mail, and
we will be back in touch with you.
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How much should I allow on top of the purchase price of my property in Spain
for costs/expenses?
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As a rule of thumb, allow for between 10% and 11% of the purchase price of
your Spanish property as costs. These are as follows:
IVA - 7% - payable with each staged payment
Stamp Duty - 1% - payable on completion
Notary & Land Registry Fees - 2% - approximate, payable on completion
Legal Fees - 1% - Half payable with first staged payment, and half due on
completion
There are additional fees if you require a mortgage in Spain. Please enquire
for details.
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Is my property in Spain likely to increase in value during the next couple
of years?
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During the last 5 years clients have made considerable amounts of money by
investing wisely in property. The general growth trend in certain areas of
the Spanish Property market has been between 15% and 25% year on year since
1999, though many experts are predicting that this growth will cool to
single digit levels.
When the company chose to establish a presence in a second region of Spain,
Murcia was the natural choice. The area is showing the fastest economic
growth in Spain, there is massive investment already made in the regionīs
infrastructure, most of the major low-cost airlines now fly to the local
airport of San Javier, a new airport at Corvera is planned for 2008, and
Alicante airport is only a 45 minute drive away.
Add to that the mix of superb beaches, glorious weather, year-round
activities and the cosmopolitan feel, and itīs easy to see why the Murcia
area should grow in popularity. Several experts are predicting growth in
Murcia property of around 20% year on year, potentially replicating the
effect that we have seen in the Costa del Sol during the last decade.
With regards to property in Almeria, we consider this region to be fairly
under-developed. There are areas such as Roquetas de Mar and Almerimar to
the west of Almeria itself that have become hugely popular, but the region
as a whole remains largely unspoilt, and boasts an impressive landscape,
with rugged mountains and wonderful coves and beaches. Prices of property in
Almeria are lower than many of the other Costas, and we believe that parity
will be drawn in years to come.
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