The Buying Process

 

Once you have found the property you are interested in buying. A purchase contract (Contrato de Compraventa) will be drawn up and a deposit of 10% of the purchase price is usually required to secure the property.

Note: Luz Living strongly advises you that all checks are carried out before you proceed to purchase contract and that you seek independent legal advice. Money spent here is money well spent.

 

The remaining 90% is paid on completion.

Before you sign anything you should have proof of the following details:

1.      Nota Simple ( a report from property registry which also gives the owner of the property and whether there is a mortgage on said property)

2.      Receipts of Utility bill paid and up to date

3.      IBI (Property tax) up to date.

4.      Receipts of Community fees up to date.

Lawyers

Buying a property in can be a wonderful and rewarding experience as long as you follow some basic rules and the most important of these rules is to use a lawyer. There are many English – speaking Spanish lawyers who are more than willing to offer their services to protect your interests in the purchase of property.

 

The lawyer should tell you in advance what his fees are .Some lawyers will fix a fee while others set it at percentage of the purchase price. The normal fee in this area is 1% of the purchase price of your property, to which you must add 16% Vat.

What can you expect from a lawyer for this fee?

·                    Legal Attendance by English-speaking lawyer in the purchase/sale of your property.

 

·                   Explanation of the contract, and all the legal implications.

·                   Negotiation of changes to the contract as required.

·                   Assistance in the application or termination of a mortgage loan if required.

·                   Assistance in the process of opening an account in a Spanish bank.

·                   Liaison with the vendors/Purchasers solicitor and or estate agent.

·                   Translation and explanation of all documents requiring your signature.

·                   Arranging payment of and taxes relating to the transaction.

·                   Searches for the existence of debts, loans or other commitments on the property.

·                   Application for NIE (fiscal number).

·                   Translation of the deeds before the notary.

·                   Advice on Spanish taxes related to the transaction, ITP, IVA, capital gains etc.

·                   Arranging registration of the title at the land registry.

·                   Resolving all legal questions involved in the transaction.

·                   Buying by power of attorney if you so require.

The Cost involved in Purchase of Property

As a normal rule, to estimate the costs of buying a property in add approximately 10% of the purchase price, to allow for all the fees and expenses involved. This 10% is broken down as follows

7% for Vat (new construction) or Transfer tax (re-sale property)

1% for lawyers Fees

1% for Notary and Land registry

1% for Stamp duty

Note:    If you are purchasing a plot of land, commercial premises or individual garages the Vat increases to 16%

 

Opening a Bank Account

 

It is very easy to open a bank account in . All you need a copy of your passport and expect the bank to ask you for the following information

1.                 Full name

2.                 Marital status

3.                 Date of Birth

4.                 Address

5.                 Contact phone number

6.                 Occupation

You will have to pay 15€ for a non residence account certificate and this is paid every two years.

Bank charges can vary greatly so our advice is to shop around and find the best for your personal needs.

NIE (Numero de Identificación de Extranjero)

The NIE is necessary for almost any official transaction you may want to do in . This tax identification number may be obtained by bringing a photocopy of your passport to the nearest department for Foreigner’s and filling out the appropriate form. Between 10-14 days later you will be issued your NIE which you must collect from this department.

Huelva

is the nearest office in this area and to avoid long queues and complications it is advisable to leave this chore to your lawyer.

Mortgages

Mortgages in general are cheaper in compared to the rest of mainland Europe .

Banks offer both fixed and variable interest rates. Non residences are usually offered 60% mortgages with a term of 15 years maximum. The variable being the most sought after at this present moment in time.

The variable rate is based on Euribor (the European Mortgage interest rate) + a percentage that each bank adds, normally Euribor + 1%.

 

Conditions can vary greatly from bank to bank but here is an example of a mortgage:

 

Value of Property	250.000 €
Value of Mortgage	150.000 €
Percentage Finance	60 %
Conditions	1st year: 3.7%
	Rest: Euribor + 1%
Term	15 years
Monthly Payments 1st year	1.086 €
Cost of Mortgage
Land Registry	377 €
Notary	645 €
Taxes	2.280 €
Valuation	264 €
Paperwork	300 €
TOTAL COST OF MORTGAGE	3866  €

  Please note there will be opening commissions to consider which can oscillate between 0.5% - 2%. Cancellation or subrogation fees can also be charged. You are obliged to take out house insurance when taking a mortgage in .

 

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