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..Financing |
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Spain is fortunate in having very few exchange controls, this means that banks are quite able to offer mortgages whether you are resident or non - resident. In view of this freedom you are entitled to seek a loan or mortgage against your property from any bank in the world in any currency. Remember there are some essentials that you will need in order to expedite the process: -
- Bank reference
- At least three months salary slips and duplicate / original P 60
- Statement of accounts if self employed
- Photocopy of income tax returns
- Presentation of assets and liabilities
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..The asking or negotiated price? |
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Depending on your position and / or the position of the buyer it might be possible to negotiate a better figure than the asking price. You might also want to make the offer subject to your mortgage offer or upon your solicitor's approval. |
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..Choosing a lawyer; |
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Fortunately there are an abundance of good, knowledgeable, multi - lingual lawyers in Spain. Your lawyer will ensure that there are no loans, charges or debts on the property or land and that all Spanish legal requirements are met. Remember that if you end up inheriting unpaid bills from a previous owner you could well find yourself with utility services that have been cut off. The responsibility is with the person who signed them.
Usually funds are lodged with your lawyer to prove serious intent to purchase, if this is not the case then proof of funds is normally sought. |
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..Exchange of contract; |
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Normally exchange of contract takes place within two weeks of acceptance of offer. Exchange is normally undertaken by private contract or a legally compiled option to purchase, these documents will outline all the inclusions of sale and confirm the date of completion / final signing at the notary. At this stage your lawyer will have undertaken all relevant searches and investigated any outstanding loans / debts. Then it is normal to pay 10% of the purchase price which is normally non refundable in the event of the purchaser not completing. |
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..Completion: |
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The definition of completion in Spain is where the public title deeds of purchase (escritura) are signed before a notary, where the final and total payment is made and where possession is granted to the buyer. Registration Upon signature the notary will send a copy of the title deeds to the local land registry. Your lawyer will, at the same time, pay all transfer taxes on your behalf. In addition your lawyer should arrange the transfer and payment of your water and electricity accounts. Completed registration can take up to two to three months. Costs As a rough guide you should budget to spend around 10% of the purchase price in fees and taxes. |
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..Breakdown of Costs; |
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Legal fees...allow around 1% of purchase price plus IVA (value added tax) which is currently 16%.
Notary fees...depending on the cost of the property range from 300 euros to around 840 euros.
Transfer tax...6%.
Value added tax ...( IVA)7% or 16% when buying land or commercial properties plus Stamp Duty of 0.5%.
Plus valia... A tax on the increase in the value of the land since it's last resale. This is normally paid by the vendor but can form part of the negotiation. The exact cost of this tax can be established by asking at the municipal tax office. |
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..Conclusion: |
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To conclude, do not be put off by the details (although it is important that you are conversant with the main points of the buying process) We can point you in the right direction and help you every inch of the way. Please note; the information on this page is only intended as a guide and we always reccomend that you should employ a Spanish lawyer before proceeding with any property purchase.
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