Purchasing Real Estate in Spain
Purchasing Real Estate in Spain
An estimated tens of thousands of homes in Spain are purchased by foreign investors each year. What is it that draws you in? First and foremost, the nation has a pleasant temperature, which is especially attractive to individuals who live in northern Europe, where the sky is often overcast. It's a short and reasonably inexpensive trip to get there. A trip from London, in the United Kingdom, to Malaga, on Spain's southern coast, takes only a little more than two hours and forty minutes. It is possible to get some very low-cost tickets to Spain with either one of the well-known budget airlines or by snatching a last-minute seat on one of the hundreds of charter flights that depart from the United States every day.
There is a large variety of properties to pick from, both in terms of kind and quantity of units. The following considerations can assist you in narrowing your search. The size of the property, the size of the garden, and the number of rooms needed are all important considerations. People who are considering emigrating with children should look into the educational opportunities offered in their new country. Take into consideration the health and social services available in the area. You may choose between a densely populated region and the wide countryside. How close are the beach, the town, the stores, the bars, and restaurants, public transportation, and what time does it stop running in the evenings?
Many developers, in an effort to increase their own revenue flow, may offer property for sale before it is built. Prospective buyers may be allowed to tour a model house, although in many instances, they may be given a development plan or scale model instead. An initial deposit is required, which will be followed by a series of stage payments. The buyer will possess a property that is worth more than the amount paid for it if property values increase between the time of purchase and the time of completion of the project, to name a few benefits. Second, most developers will enable the buyer to have some input on the style and design of both the inside and outside of the property. The disadvantage is the length of time that purchasers will have to wait until the development is completed, which is often more than 12 months in certain cases. And, of course, they will not know what they are receiving for their money until the construction of the property is finished and handed over.
Apartments are likely to be the most affordable kind of property available in a completed state. This kind of home is often found in an urbanizacion or housing estate, which may also contain other types of property, such as townhouses or villas. These tiny communities will feature amenities such as a pool and well-manicured gardens. Most businesses use some kind of security, whether in the form of guards or closed-circuit television cameras. In order to fund the cost of these amenities, a community fee is required. A word of caution, though. During the summer months, a large number of these homes are rented out to vacationers. Some to English people with children, and some to non-English people. The amount of noise these gentlemen create while on vacation must be heard to be believed. After school, when it's not their inebriated parents, it's the kids on their own time in the evenings and early mornings.
A standalone, purpose-built villa provides greater privacy and isolation than a comparable home inside a community, although it will be more expensive than the latter.
Buyers seeking a more authentic Spanish experience may consider purchasing a property in a well-established town or village setting. Many of these homes seem to be tiny from the outside, yet once inside, they are surprisingly large.
A Finca is a piece of real estate situated on a piece of land in the countryside. It may be a dilapidated farmhouse or a recently constructed villa. Many fincas contain a large amount of land, which may be planted with fruit orchards or olive groves, among other things.
Finding the perfect home should be as simple as a matter of browsing around a little. Once a choice has been made on the location and kind of home, it is time to speak with an estate agent about the purchase. Make certain that this individual is registered with the authorities and that he or she has a valid license. Many estate agents have prior experience with time share projects, so anticipate a tough sell when selling a time share. Any assertions made by agents should, to the extent feasible, be backed up with evidence from a third-party resource.
Any offer to buy a property should be made in writing and should contain the following information. The price, the method of payment, and the currency in which it is to be paid. The amount of the deposit required to guarantee that the property is removed from the market, as well as the date on which it must be paid. The date on which the project will be completed. In which cases, who is liable for the payment of the taxes? There should also be a comprehensive description of what is included in the price, such as furniture, fixtures, and fittings, as well as a condition that all systems, such as air conditioning, are in excellent operating condition. It is critical that this be done in collaboration with a legal professional. The country of Spain is home to a large number of English-speaking lawyers. No document supplied by an estate agent or other third party should be signed unless it has been reviewed by a solicitor in advance. It can not be overstated how important this is.
When an offer is accepted, the solicitor should first verify with the land register to ensure that the property is really owned by the buyer. If all goes according to plan, a private contract binding both parties to the transaction is prepared. Following that, the drafting of public deeds (Escritura de Compraventa), which must be signed in the presence of a Spanish notary public, is required. The solicitor will send the completed title deed to the local land registry, verifying the new owner's name and guaranteeing that the property can not be sold for a second time after the completion date.
Certain costs and charges are associated with the annual upkeep of the property, and they may include things like community fees, energy, real estate tax, garbage collection fees, and water. If the property produces rental revenue, the owner will be responsible for both property income tax and wealth tax on the money generated. This information should be available from the real estate agent in question.
Making a mortgage application in Spain is a very simple process. Original copies of the following papers are required: passport, payslips from the previous three months if employed, and, if self-employed, accounts from the previous three years, an accountant's reference, and tax returns.
Roughly 1 percent of the agreed price will need to be found in the form of new funds to pay for extra costs, which will include: legal expenses of approximately 1 percent, notary and land registry fees of approximately 1 percent, and title deed tax of 0.5 percent. It is possible that a Valia tax will be levied on any rise in the value of the land. The IVA tax is imposed at a rate of 7 percent on new buildings. It is taxed at the full rate of 16 percent for the acquisition of land, which is the maximum amount. Purchasing used property is subject to a transfer tax, which is the same rate as the IVA. The transfer tax is 7 percent.
Those who want to stay in Spain for a length of more than six months must apply for residence in the country. Spanish property owners who do not have a residence in the country need to designate a financial representative, who must also be a resident of Spain, to represent them. This might be a lawyer or a tax advisor, or it could be a neighbor or a friend who wants to save a few euros. All communication pertaining to the property will be addressed to this individual.
A gestor or legal representative may be appointed in certain cases. They will take care of all of the paperwork, and there is a lot of paperwork to take care of in Spain. To begin with, there's the residence requirement. People who want to work will be required to get a work permit. Those starting a company may get assistance with the many licenses and permissions that will be needed. They will also provide assistance with the importation of pets, automobiles, furniture, and electrical items. Additionally, they may handle pension payments in Spain.