When you have decided that Spain is the Country for you, and a wonderful country it is, steeped with tradition, great climate and being just over 2 hours flight away from the UK, why wouldn´t you choose it.
Spain is unbeatable for a heathly lifestyle, do as the locals do, outside living is the way to go. Lots of fresh clean air, fresh food, and if you want the Blue flag beaches of the Mediteranean, there too many to choose from, inland, vineyards, olive, lemon & orange groves, are a lovely sight and smell.
Whether you are looking for that traditional finca, a rural plot of land to build your dream house, a villa, apartment or even a mobile home- we are here to help.
We can hold you hand throught the whole buying process, & point you in the right direction for legal advice, mortgages , insurance, security, getting your NIE and services connected. We will help as much as possible , to make it as stress free as we can. Please check out our property search for your Ideal home in the sun.
If you come to spain with the intention of buying a property, you will have to pay a holding deposit on it to make sure nobody else can buy the property, this is usually 3000€ and is not refundable, so if you need a mortgage make sure it is possible to get one before you part with any cash. You will also need to obtain an NIE number (numero de identificacion de extranjeros). A legal advisor can offer advice and arrange these things for you for a small fee.
You will need to produce the following documents when applying for a spanish mortgage:
Self employed must provide business accounts (balance, profit,loss)
To open an account
You should always consult a spanish lawyer and tax advisor before purchasing a property or applying for a spanish mortgage.
When a property is purchased, you will need to pay IVA (tax) and stamp duty, the rate you pay depends on the property you buy, eg. On a new property you would pay 7% IVA and 1% stamp duty, On a re-sale property you would pay 7% transfer tax, and on plots of land or commercial property 16% IVA + 1% stamp duty. If you take out a spanish mortgage you will be charged 1% for setup fees.
Buying off plan means reserving a property on a development that is not constructed or finished yet. These properties are usually cheaper than buying a re-sale but you don't know exactly what your property will look like when it is finished, you will only have a show house and floor plans to go buy.
This type of property is always very popular with investors as they don't need to like the house they are buying and they will probably only ever step foot in it once ,if at all. These properties are very good for rental as they will be brand new and can sometimes be bought fully furnished with everything including the curtains and cutlery or a furniture pack can be purchased for around 5000€ including a leather sofa and everything else you would need.
Often by the time the property is actually built it will have gone up in value by 10-20% or even more, this is why buying off plan is so popular. When the properties first enter the market as a set of drawings the price will be at its lowest. Buying at this price ensures optimum increase on the value of the property when the purchaser comes to sell. Many dedicated investors will sell before the building is even complete, as all of the properties will have been sold at the lowest price and people can only buy them at this new higher value, these people only buy to make a quick profit, this is known as flipping a property. Some investors however keep the property and rent it out, if they have taken a mortgage out on the property then the repayments can usually be covered by the rental. So in 10 years time, the property will have doubled in value, they will still own it and their mortgage will be well on its way to being payed off with little input from the owner themselves.
These properties are also attractive to people who wish to buy a holiday home, they are usually a very reasonable price and can sometimes be customised more to the buyers specification, these developments are also usually built in sought after areas where there is more demand for property, so people can get their foot on the Spanish property ladder without having to shell out a lump sum of cash as they would have to with a re-sale property. The approximate build time for most off plan properties is around 12-18 months and although this may seem like a long wait, it gives the purchaser more time to come up with the money as it will be payed in installments and at the end the property will be worth more then the purchaser has actually paid for it.
Excellent mortgage rates, English speaking banks and many developers offering easy buy payment schemes will keep the off plan property market booming for a long time to come.
In Spain there are over 3 million second homes, and the demand for holiday homes has risen by 3 percent per year over the last ten years. By 2008 the number of second homes bought by foreigners were expected to overtake the number of Spanish buyers. Due to the dramatic rise in UK property prices over the past few years, many brits are finding that they have equity in there homes that can be used to buy a second home abroad. This was once considered a privelege for only the rich.
Owning a Spanish holiday home has never been easier, with daily flights from many airlines at very competitive prices, and an average flight time of just over two hours from almost anywhere in the Uk to the southern Costa's of Spain, that a long weekend to your holiday home is always an option. You wouldn't even need to pack a suitcase, as owning your own home abroad gives you the opportunity to leave clothes, towels and toiletries where you need them, this also means that you wont need to spend up to an hour at the airport waiting for your luggage to come off a carousel ( only to find that it is sometimes damaged or missing).
Many of the foreigners buying Spanish property choose the coastal areas of the Costa blanca, Costa del sol and more recently the Costa azahazahar, Costa Calida and Costa tropical. All of these locations have stunning blue flag beaches and the more inland countryside villages with less than 10 minutes drive to the beach.
If you intend to buy Property in Spain as an investment rather than to live-in or holiday-in, it is a great idea to rent the property out on a long term let which would give you a substantial income on your investment and cover any bills such as community charges.
Whether you buy a property from us or any other agent or even if you already have a Spanish property that you would like to rent out (and return a substantial amount of money that you would not have whilst your property is sitting empty). We can offer you a full management package, we can market you property for free on our website, In our shop windows, in our property brochures, local newspapers and some properties even get advertised on tv. This generates a lot more interest from potential tenants than most agents who sit in an office and wait for somebody to come in and ask what property they have available. We can also offer many other services when you property is being rented out. We can also arrange furniture packs, maintenance and anything else you could think of.
The Process of Reserving your Property Payment Terms and Contracts: The normal procedure in Spain is to reserve the property with a deposit, to give you time to gather the funds. Here is the typical breakdown for reserving and paying for off-plan and resale property; Off-plan payment terms
3,000 euros and sign a reservation contract to reserve the property for a time period of one month.
Within one month you will pay 30 percent plus taxes (minus the 3,000 euros you have already paid) of the agreed sales price and sign the purchase contract.
Once the property is finished and the terms of your purchase contract have been met by the developer, you will pay the final 70 percent plus taxes and sign the property’s escritura (title deed) in front of a public notary.
To reserve the property you will sign the private purchase contract that agrees the terms and date for the completion of the sale and then pay 10 percent plus taxes, of the agreed sales price to the vendor’s lawyers escrow account.
Once the terms set in the purchase contact are met, you will be expected to pay the final 90 percent plus taxes and sign the property’s escritura in front of a public notary.
The above payment structures are merely a guide, developers are commonly more flexible than this and resale scenarios are down to the negotiation between you and the vendor. For instance, a vendor may accept a reservation fee to give the buyer more time to prepare the finance required for the 10 per cent deposit for the purchase contract.
On all the reservation payments we advise you to pay directly to the vendor’s lawyer or to a bonded or escrow account that has been set up for this purpose. Always try to avoid paying the money directly to the seller.
What is a reservation contract? The reservation contract is used as the standard format for reserving off-plan property for a specified period of time. Typically the contract describes the:
Identity of the developer
Exact location of the property
Description and details of the property
Date to exchange purchase contract
Details of developers building licence
Details of the relevant permits, insurance and other documentation
What is a purchase contract? The Contracto de Compraventa is made between the purchaser and the vendor and sets out the terms under which the property will be purchased, such as:
Agreed purchase price
Payment of the Deposit Amount
The exact dimensions and features of the property you are buying as demonstrated by the referencia catastral (cadastre reference).
The exact location of the property
The intended completion date
All terms and conditions negotiated between the seller and the vendor
A declaration that the purchaser and vendor are legally in a position to buy or sell the property respectively.
The following points are specific to a purchase contract for an off-plan property:
Details of the planning approval
A specification that the developer is responsible for all debts on the property up until the completion date
Confirmation that your payments go into an escrow account to which the developer has no access until the property is finished and delivered to you
Confirmation that the relevant bank guarantees or insurance policies that protect your deposit are referred to in the purchase contract
That the costs of cancelling the developer’s mortgage are paid by the developer
That all the other developer’s costs of completion are paid by the developer i.e. plus valia, the costs of the segregation of the land, etc.
All purchase contracts and reservation documents contain terms that set out the provisions for the sale of the property. Parties can draw up tailor-made contracts to suit their interests, inserting their own terms and conditions. These are valid and enforceable as long as: 1. They are not deemed unlawful or unfair 2. They are easily interpreted (otherwise the courts could interpret to the detriment of the property who crated the clause). If required an Arras or clause can be inserted so that if either party breaks the contract there are automatic penalties. This is usually the loss of the deposit on the purchaser’s side, and payment of double the deposit on the vendor’s side. It would be a very good idea to have your lawyer translate your purchase contract into your language so that you have a dual copy and understand the terms and conditions described in the Spanish document. The use of a ’subject to’ clause One important point to note during the reservation contract phase for an off-plan property or a purchase contract for a resale is that it is a good opportunity to include a ‘subject to’ clause(s) to prevent the loss of your deposit money should you be unable to gather your finances. Your lawyer and sales consultant will be able to advise you and negotiate on your behalf. Buying your property It is quite possible in Spain for a vendor and a seller to come to a quick agreement and move straight to completion and the signing of the escritura de compraventa (title deed of conveyance) by passing the prvious two contracts. When both parties are ready to complete the transaction, they and their lawyers will attend the notary’s office to sign the escritura de compraventa.
The notary will undertake his own search of the Land Register (Registro de la Propiedad) and see if there are any undisclosed charges on the property.
He will then prepare the title deed of conveyance from the information supplied by the vendor and check compliance with Spanish Law.
The notary will then read the whole document in Spanish or English with a translator to you and the vendor, and you will both sign the deeds.
The balance of the final monies owed will be settled and the notary witnesses the vendors confirmation that he has been paid. The escritura de compraventa is then passed to the tax office to be assessed for duty and then to the land registry for entry to the property register. Your lawyer will contact you once the escritura publica (the registered deeds that state that you are the legal owner of the property) is ready for collection (usually 2-3 months) The contract prevents the developer selling the reserved property to a third party within the specified time frame.