Legal Information for purchasing a property in Spain:
Before arriving in Spain, you should make sure that you have at your disposal adequate finances to cover the reservation sum. The absolute minimum requested is usually € 3.000, - to € 6.000, -, but may be larger for higher value properties. The reservation figure may be paid with a credit card or cash. A cheque if drawn on a foreign bank may take up to ten days to clear by a Spanish bank. This deposit forms part of a legal contract, which holds the price of the property as agreed at the point in time of paying the deposit and guarantees you will not be affected by any future price increases. If you do not have the funds to lodge a reservation
sum immediately, you may risk losing the property to another individual
who does have the reservation sum to put down. There are effectively
no exchange controls in Spain, which means that whether resident
or not, you are free to obtain a loan or mortgage against your
property in any currency and from any bank in the world. Spanish
banks are quite willing to lend to non-residents purchasers of Real Estate.
You will need: |
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A photocopy of your income tax returns |
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A Photocopy of your passport |
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Last three months bank statements |
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Three months salary slips |
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A bank reference If self employed, statements of accounts |
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A breakdown of assets and liabilities |
As soon as a suitable property has been selected, the buying conditions and cost will need to be negotiated with the vendor. Your Sunseeker representative will carry this through for you and bring in our lawyer to assist in the negotiation making sure that any offer meets his legal criteria. Formalizing the offer: When there is an unwritten accord between parties, the next stage will be to formalize those bid terms of purchase in text. Funds should be put in a local bank account or with your Lawyer to show the seller that there is a genuine intention to buy. It is typical practice in Spain to include with the offer an amount of money to retain the property until switch of private contracts. Switch of private contracts: When acceptance of the proposal by the owner the next move in the sales route is to switch private contracts of sale or to sign a preference to purchase. This could happen within two weeks subsequent to formal recognition of the offer or sooner. Your Lawyer will have concluded his searches and investigations of the property and will have arranged with the owner the procedure for the abandonment of any outstanding debts. The private contract of sale or choice will reflect all the agreed terms of the offer and sale and set out the date for concluding conclusion at the Notary. It is usual procedure at this stage to pay a percentage of the buying cost, which normally is non-refundable, should the buyer not complete. Conclusion at the notary: Formally completed in Spain is a sale, when the public designation actions of buying are signed previous to a notary, the concluding sum made, and ownership given to the buyer. Registration: When signed, the notary will fax a letter of the title deed to local land registry. Your Lawyer will also disburse on your behalf all the appropriate transfer taxes connected with the purchase and will control the official procedure of registration of your title deeds. Closing registration of the deed may take up to two months. Correspondingly, your Lawyer will organize for the relocation of accounts with the local suppliers of convenience services such as water and electricity and organize their payment through a local bank. Costs involved in buying a property: There are in two taxes and three fees to pay when buy property in Spain. As a regulation of thumb, you should financially plan the mutual total of these amounts, which will be around 10% of the purchase price (legal fees, notary fees, property registry, I.V.A. at 7% plus stamp duty at 1%).
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Purchase Options |
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Cash Purchase |
| Previously if you have the complete sum of property purchase price in cash in a deposit account in the UK, your only deliberation will then be the exchange rates between the pound and euro when the different stage payments are requested. HIFX offer commercial rate transfers with minimal or no transfer charge. | |
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Re-mortgage your UK property |
You may make a decision to raise money to buy a property abroad, by way of re-mortgaging your individual property in the UK. With interest rates so small this is an admired alternative. We can organize for impartial advice on this service. |
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Acquire a Spanish Mortgage |
If you do not have sufficient cash funds accessible, and do not want to re-mortgage a property in the UK another option obtainable to you will be to take a mortgage with a Spanish bank. This is a very easy option with Spanish banks submitting non-residents up to 70% Loan to Value at around 3.5%. |
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