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Property
Purchase
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Firstly
you will need to obtain an NIE No. (Identification) from the police and
open a Spanish bank account, although you can purchase with your passport.
Always
obtain details of the cost of community fees, local rates etc., as these
can vary considerably.
Always
add 10% to the purchase price with no mortgage facilities and 12% in the
case of a mortgage facility. This will cover 7% tax (IVA) on a new
property, Notary fees,
professional charges and registration fees. If the property is a re-sale
then there will be 7% transfer tax to pay. The bank
will also require insurance policies to be taken out with a life cover
also. This is allowed for in the overall 12% in the event of your taking
out a mortgage.
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If
you require a mortgage then you can apply to a Spanish bank and they will
require evidence of income. If you are in receipt of a pension or other
income from your country of origin, then a certificate from your bank will
be sufficient. If you are a working resident you will need to produce your
last years tax return. The bank will send a valuer to the property
selected and you will receive a mortgage offer based upon the bank's
valuation. Normally the bank will give up to 80% for a resident and 70% to
a non resident, based on their valuation. The process
will take approx. 2 weeks depending on the selected bank. Interlink
are working directly with Banco
de Andalucia, Unicaja and other reputable banks that can offer not only preferential rates but also a personal,
professional service tailored to your particular needs, and in your
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Current
mortgage rate of interest is around 3.45% to 4% (March 2007). Mortgages are for a period of between 5
and 30 years, according to applicant's age.
If
you are a working resident in Spain you will be allowed to reclaim tax in
respect of your monthly mortgage repayments. The first year you can
reclaim 25% of your total repayment and 15% thereafter.
When
you have chosen your property it is usual to place a holding deposit,
subject to contract. This is usually agreed between the agent or vendor. A
normal holding deposit is usually between € 3,000 and € 6,000.
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Nota Simple is then obtained (Local Land Registry Search) to ensure clear
title, i.e., no mortgages or debts attached to the property. Meanwhile a
draft contract will be received from the vendors representative for
approval together with a copy of the Escritura (Title Deed). The title
deed should be thoroughly checked as boundary disputes are quite common in
Spain! Evidence that all bills for services have been paid.
Once satisfied that all is in order the contract can be signed and a completion
date fixed. A completion can take place in as short a time as 2 days if
all are in agreement providing vacant possession is available, or
otherwise by mutual agreement. 15 days is normal.
The
completion will take place at the Notary. His job is to produce a new
Escritura (Title Deed) in your name and cancel the existing deed.
You
will need to take with you, on the completion, your passport, your NIE
paper, and / or Residencia and a bankers draft/s for the balance of the
purchase price.
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The
Escritura will then be registered at the land registry. You should receive
this back within 3 months of lodgement. If you sell your property as a
non-resident, then 5% of the purchase price must be paid by the purchaser
to the tax authorities in order to avoid tax evasion. You will also have
to pay capital gains tax if you sell the property at a later date. This
will be the difference between the price in your title deed (escritura) and the
declared price on the sale. This is
at the rate of 35%.
If
you are a resident the capital gains tax is calculated at 18% maximum
and you have 2 years to pay this. If you re-invest in another property
during this period, then capital gains can be avoided.
Normally,
in calculating the profit made, it will be reduced, for every year of
ownership immediately following your first two years of owning the
property.
If
you rent out your property then you will pay 25% on the rental incomes
received.
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are very basic guides to give some indication of the principals of
property purchase and sales. |
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If you require further information
regarding House Sales and Purchase, please contact us via Email at info@interlinkspain.com or
complete the Enquiry Form on the Contact Us page or telephone us
on (+34) 952 441 632
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