What is the first step to buying a property in Spain?
Find a real estate agent who speaks your language. Most agents collaborate, so they can access numerous portfolios, giving you a more comprehensive service, covering a larger area, without the inconvenience of arranging multiple meetings with numerous agents. This is the most effective use of your time and you are more likely to find your desired property.
What is the difference when looking for a holiday home, Permanent home or Investment property?
When buying a holiday home, where you buy will depend on the time of year you will use it and also what you like to do. Age and hobbies will be a factor.
When buying a permanent home you need to be more thorough. Again age is a factor, do you have a family, or are you retired or need to work. The style of property, that is more suited to permanent living. The location ideally needs to be not too touristic to ensure continuity of services throughout the year. Things like amenities – schools/hospitals etc. Job opportunities and access will be important. How good is public transport if you don’t want to drive abroad?
When buying an investment property, is this to flip (which is not common in Spain) or for the rental market. Holiday lets need to be in the tourist sectors and the long lets in the more residential areas. The 2 bed apartment is the most common purchase for investment. Multiple purchases or one large investment in excess of €500,000.00 entitles the investor to apply for a Golden Visa
What is the Golden Visa?
Launched in 2013, this is an incentive for non-EU buyers to get fast-track residency in Spain with a property investment of €500,000 or more. This can be through the purchase of more than one property adding up to this value. Subject to other requirements (healthcare/self-sufficiency) the residence permit will be granted for two years, and then renewal is possible. UK residents can now take advantage of this incentive.
Is it best to use services the Agent recommends?
A reputable agent will be-able to make recommendations for various different services that will assist you throughout the process and beyond. There is a lot of hype about this subject, and with everything there are good and bad stories. Agents would not deliberately recommend any service to you that could cause damage to their own business, so would ensure that the business they recommend is vetted and has a good reputation.
Are lawyer fees fixed or based on a % of the cost of the purchase property?
Most Lawyers usually charge a minimum fee of around €1,500 plus VAT at 21% amounting to €1,815 which will cover the legal conveyancing services involved in buying the property and opening a bank account. There is normally extra charges for NIE’s, POA (Power of Attorney), Wills, Bank Charge, transfer tax, notary, land registry and utility transfers. If you use a lawyer recommend by your Agent they could have made a deal that benefits you financially.
What is the most cost effective way to change my funds into euros?
Procuring the services of an international money exchange company will always provide you with a better exchange rate than any of the high street banks. Most agents can introduce you to a representative whilst youa re here, giving you a personal point of contact.
Is it easy to get a mortgage in Spain?
It is very easy to get a mortgage in Spain. You can go to the bank you have used to open your account. They will ask the normal fiscal information that you would present in your home country. For the UK they would require a copy of credit reference, as they have no access to this. You can also go through a broker who will look at all banks to get you the best deal. It has been normal to give a LTV (loan to value) of around 70/30, but the banks are cautious and the decision is based on your personal criteria. We can organise pre approval prior to travel so that you have a clearer picture of your budget.
What age can you legally buy a property in Spain?
Can I purchase in my Child/Children’s name or transfer the ownership?
You can buy the property in their names as legal owners and you reserve an interest for life. They have to be over the age of 18. If your Child/ Children own a property in their home country then check locally for any tax responsibilities. Once you have purchased the property you can donate a share of it to them, however donation taxes could be payable.
What would my buying costs be if I Purchased a property in Costa Blanca?
Most agents will give you a % to add to the cost of the property. To keep it simple and accurate, in this region you will pay 10% purchase transfer tax and approx. €4,500 that makes up all the other costs (if you request extra work then this will be quoted separately). If buying a new build there is an extra 1.5-2% stamp duty on top. In the event that you buy with a mortgage then further charges are incurred and quoted by the bank/finance company.
Do the lawyers in Spain do surveys on the property?
Surveys are rarely done in Spain, but for an additional cost your lawyer can organise this for you.
How much does a Spanish will cost?
This will differ from lawyer to lawyer. Lawyer charges from €140 plus IVA and beyond, it all depends on their pricing structure and the charges from their local notary. The lawyer can arrange this during your buying process. This has to be signed at the notary and you must attend. This cannot be done with your POA.
If I buy a new build property off plan, can I do anything to make this safer?
Most agents use reputable builders who will issue a bank guarantee to protect the payments you make during the build process. All builders will have their own staged payment structure so can differ from builder to builder. Inspect properties that are key ready. A builder’s guarantee is issued and snagging lists are addressed. It is advisable to buy through your agent as they can act on your behalf and normally can get the support of their preferred legal team to assist if required. During the build, your agent can provide photographic evidence of the build project when required, prior to the next stage payments.
Is the reservation deposit refundable if I change my mind?
If you change your mind you will lose your deposit and the seller is compensated.
What is the quickest way to buy a property in Spain?
The quickest way to complete on a property in Spain is a cash sale. As long as the vendor has everything in place with their lawyer, we allow approx. 4-6 weeks for completion. It can be much quicker if desired and everything is in place. When buying with a mortgage, we would allow approx. 8-12 weeks for completion. A new build is at the builders agreed time lines.
Can I do a rent to buy in Spain?
Rent to buys are available in Spain. A seller will have discussed this as an option with their agent when they listed the property and this will be advertised. Many buyers like this option but the supply is limited as it is the seller who ultimately has to decide to sell the property in this mannor. The lawyers will raise a contract that is legally binding for both parties. It is perfectly safe to do but ensure the contracts are done by your lawyer.
Do I, as the buyer have to pay the Estate Agent a fee?
The seller will have signed a listing contract where they have agreed a fee to be paid to the agent from the proceeds of the sale. If the buyer uses a property finder, they may agree to pay them a fee.
Who do the Agents act for, the buyer or the seller?
The agent can act for either the buyer or the seller or both. As collaborations are commonplace, one agent could be acting for the buyer, and other for the seller or if it is a direct property then the agent acts for both. When the agent acts for both they are a neutral person. The agent only gets their fee on completion so it is in their best interest to ensure a seamless journey from deposit to completion. Both buyer and seller will have their independent lawyer to protect their client’s interests.
Will my property purchase be affected by Brexit?
The property purchase will remain the same unless you are going to buy within the military zone. If you are going to purchase in this zone then you can start to prepare before you travel. Your agent should beable to advise you. The country will require a military check to be presented at the notary to purchase a property in these areas. This is an enforced law from many years ago.
Which areas are in the military zone?
In the Costa Balnca, there is an area around San Javier military base that is affected. Approximately it goes as far South just past Mazarron and North to Torrevieja. It goes inland, up to Corvera and along to San Miguel de Salinas. The whole of the Orihuela Costa is affected. There are some areas within this zone not affected and will need to be checked individually. There is lots of effort to reverse this law, so we will update as we are informed.
Will I be allowed to use my property for long periods of time?
The Schengen Agreement, entitles you to spend 90 days in Spain without a visa. This is 90 days in any 180-day period, whether you own, rent or staying with family. If you wish to stay longer then you must become resident (non EU – will need to apply for the TIE)
What about applying for residency once I have a permanent address?
The lawyer can help with this or you can use a local personal service, which is normally cheaper. Due to Brexit, the Brits must follow a new procedure, the TIE (Tarjeta de Identificacion Extranjeros) residency card. There is different criteria dependant on your circumstances so your representative can discuss this with you. If you wish to discuss this further drop us an email and we can put you in touch with a representative.
Can you apply for a residency before you have completed a purchase?
Yes, but you need a permanent address, and you need to be on the Padron (this is similar to the electoral role in the UK). You can apply if you have an 11-month rental contract and are on the Padron at this address. Once you complete on your property the address can be altered to the new one. You must be living in Spain, not visiting.
How long do you have to be in Spain to receive free healthcare?
EU citizens can immediately obtain this with the EHIC (European Health Insurance Card), but at the end of the transition period, Britons won’t be able to do this unless a reciprocal agreement is made with Spain. Pensioners who live in Spain can access healthcare with the S1 form, but if you are not of pension age and seek to move to Spain, you will need to take out private healthcare until you are officially a resident and can take advantage of options such as the universal health system in Spain. If you have moved to Spain and work, you will pay into the system and receive free health care.
How much does private healthcare cost?
Healthcare quotes are individual to the person. Send us an email and we can put you in contact with a professional who can provide you with a quote. It is considerably cheaper than the UK.
I have heard that everyone must do a tax return?
Most people obtain the services of an accountant, most solicitors have their own accounts departments and offer this as an ongoing service after your property purchase. Do not cut corners, the country takes this very seriously, and action is taken.