IS IT EASY TO QUALIFY FOR MY NEW HOME MORTGAGE IN SPAIN?

Generally speaking, a mortgage of 60% – 70% should be available (subject to status) meaning a deposit of around 30% – 40% would be required. The bank may consider certain other factors like your salary, together with any savings or borrowings you may have on your family home (mortgage) or other assets (e.g) investment properties (etc) They may also run a check on your credit history.  

COULD I GET A MORTGAGE TO PURCHASE ANY PROPERTY IN SPAIN?

Basically, yes but some rural properties may well be more difficult to secure the mortgage on (e.g.) some banks may have a policy of not offering finance on any property in excess of 15km inland, preferring to loan on coastal properties only.

GENERALLY, WHAT ARE THE FEES LIKE WHEN I’M BUYING IN SPAIN?

This always depends on the value and it will variy from around 10% – 12% of the purchase price. Briefly this will consist of ‘transfer tax’ of between 8% – 10% and your legal representative who will charge a maximum of 1% (plus IVA at 21%). In addition, there will be land registry and Notary fees at approximately 0.35% of the purchase price. With all this in mind the total amount will not exceed 10% – 12%.

WHAT ARE MANDATORY DOCUMENTS REQUIRED TO BUY IN SPAIN?

Before proceeding to complete your property purchase an NIE number must be obtained. The NIE is a registration number system for foreigners, and it will be necessary to purchase any property or motor vehicle. You will also need an NIE number to open a bank account or have the utilities connected at your property. An NIE number is easily obtained by contacting a local ‘Gestor’ who will make your application. Also available from some police stations, costing about €20.

COULD I BUY MY HOME WITHOUT USING A LEGAL PROFESSIONAL?

Yes, however we would strongly advise that you use a qualified solicitor (or) legal representative. This would be considered quite important. It ensures that you are purchasing the property with a clear unburdened title, as all the correct searches will be conducted on the title deeds prior to attending and signing at the Notary.

USUALLY, WHAT ARE THE STAGE PAYMENTS INVOLVED IN BUYING?

Normally, upon an offer being accepted €3,000 euros holding deposit is required to render that property taken off the market, typically for a period of 3 – 4 weeks. Then a private contract is signed between buyer/s and seller/s which confirms a purchase price. At this point a (non-returnable) 10% deposit is then payable over to the vendor/s. Then (under normal circumstances) the final balance is payable to the vendor/s approximately 4 – 6 weeks later, with all the parties attending the Notary to sign. (at times this timescale may be negotiated between the parties)

WILL THERE BE ANY UNPAID DEBT ON MY NEW HOME AFTER I BUY?

As part of the purchasing process and before the signing of the contract, we will apply for various paperwork that will confirm there are no legal charges present against the property. The buyer’s solicitor will also make similar checks ensuring the title is clear of any liens or outstanding debts etc. If you are drawing down a mortgage on the property, the bank will also undertake their own title searches.

IS MY PROPERTY STILL ‘FOR SALE’ AFTER I’VE PLACED MY DEPOSIT?

As mentioned above, a €3,000 euros reservation deposit is paid to ensure the property is taken off market temporarily for 3 – 4 weeks (or for a period of time) agreed by both the buyer/s and seller/s. During this agreed period the buyer/s solicitor will prepare the ‘Compraventa’ (contract of sale) in conjunction with the sellers/s, purchaser/s (and their bank, if buying with a mortgage) and ourselves.

HOW ARE THE UTILITIES TRANSFERRED  AFTER I’VE PURCHASED?

Responsibility of transfer of utility accounts like water, electricity, telephone (etc) is for the buyer`s solicitor to complete. Meter readings need to be taken on actual date of sale and submitted to the utility companies, with a new account opened in the name of the new purchaser/s. Payments will then be made by direct debit.

ARE THERE PROPERTIES FOR SALE WITH THE FURNITURE INCLUDED?

Some properties will come to the market with furniture and white goods included. This always needs to be agreed between seller/s and buyer/s prior to the signing of a private contract. If included an inventory of all such contents is attached and this is signed by both the buyer/s and seller/s, forming part of the contract of sale.

WILL I HAVE TO PAY ‘COMMUNITY FEES’ (or) ANY OTHER CHARGES?

Yes, urbanisation charges (sometimes known as community fees) may vary, this will also depend on the size of the actual property and/or some other factors such as facilities (gym, swimming pools etc) available to residents on the urbanization.

WHAT ARE THE NORMAL ONGOING COSTS AFTER MY PURCHASE?

If you buy a property on an urbanisation there will be annual community fees. as set out by the management company responsible for maintaining all the facilities. All property owners are also required to pay their annual property taxes and ‘IBI’. These are the local taxes set out by the town hall for providing utility connections, refuse removal, street lighting (etc) All property owners have to pay these taxes.

COULD I BE REPRESENTED BY MY POWER OF ATTORNEY IN SPAIN?

Yes, a purchaser can assign another person to represent them in signing any documents on their behalf. Usually, this important task will be assigned to their solicitor or legal representative and it means that the purchaser/s themselves do not necessarily have to travel abroad to complete their purchase. The assigned Power of Attorney will go to Notary, signing all documents on behalf of buyers.

SO HAVE I TO TRAVEL TO SPAIN MYSELF TO EXCHANGE CONTRACTS?

No, this can be done remotely from your country of residence by bank transfer (or) placing your solicitor or legal representative in funds in advance of exchange.

I’M BUYING TO RENT OUT, WHAT TYPE OF RETURNS COULD I EXPECT?

Our team will be quite happy to evaluate your property purchase (v) the potential rental returns achievable from it, and before you commit to the actual purchase.