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50+ Homes Guide

SPAIN

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FREE GUIDE TO BUYING PROPERTY IN SPAIN

Thank you for downloading our free guide to buying property in Spain. Latest edition 17th June 2012. This guide is for an overview of the marketplace and its purpose is to assist with safe purchasing with in the kingdom of Spain.

There are 2 main types of properties in spain

New construction, also called new build or off plan&

Existing already built construction, called resale.

To buy new construction you buy from a developer/builders guide, from a set of plans, an architectural drawing.

The financial process is you normally pay a holding deposit, and a percentage % of the cost of the property now, and a percentage of the costs % during the construction process, under a private purchase contract until finally the prop-erty is finished/completed.

Then you pay the balance for the property at the public notary, with approx 10% closing costs of the total price. (Of which 8% is vat + legal + notary + registry + stamp duty. At this moment the government of spain has discounted this to 4% vat for finished properties that are bought before end of 2012.) Like all government things this does change, and can be subject to change.

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To protect a buyer from a developer going bankrupt or not finishing the prop-erty, a developer by law has to provide a bank guarantee on the amount of money paid. It is important that your lawyer asks for this bank guarantee.

The major advantages of having a new property are you can build something exactly to your own needs, *if you were to have a villa designed for example.

So as well as bringing your own designs, and style, - eg having a super large modern kitchen or an extra large stunning view roof terrace, or a master bed-room with ensuite and veranda, you have a 10 year building and architectural insurance.

So for the next 10 years you have easy peace of mind living.

There is also something special about having a place where no one has used the kitchens bedrooms or bathrooms before, there are no hidden surprises that you can find in a property that is 30 or 40 years old, with damp or internal out-dated electrical issues! The materials used will be of a newer quality and tend to be better and higher specifications, than the materials that were built with in the past.

Now with new eu laws, there has to be eco and green additions to new build, like solar installations, cutting down your maintenace fees.

For an existing house, a resale, you simply go to the public notary and pay the price of the property plus the closing costs of approx 10%, 7% of the 10% is gov-ernment taxes, called a property transfer tax. And the other costs are made up of the notary, registry and lawyers fees. With resales you buy as it is.

In spain unlike the uk house structural surveys do not take place, even for mortgage purposes! So you buy it as you see it. Another reason to buy new!

It is that simple.

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Mortgages

If you wish to use a mortgage, a set up fee normally goes to the bank, and you pay a government tax, notary and registry fees for the mortgage too.Budget for another 2% of the total property price for this.

Mortgages in spain are now because of the past financial crisis 60-70% of the property price for non residents (foreigners), before this figure it was up to 90%.

So if you choose a 60% mortgage you would require 40% of the property price + plus see below for a new build or resale example.

For example –A new construction property of 300.000 Euros you would pay around 4% vat, 2% for lawyers, notary and registry and 2%, so in total 300.000 Euros plus 8% which is 324.000 Euros.

If you got a 60% mortgage, you would pay in cash 40% for the balance of the property. Mortgage would be 60% of 300.000 Which is 180.000 Euros you need 40% cash of 300.000 Is 120.000 Plus the other 24.000 Euros closing costs (8%), so

Total cash would be 120.000 Plus 24.000 Is 144.000 Euros

A resale property of 300.000 Euros, would costs approximately 300.000 Plus 10% for the closing costs and 2% for the mortgage, so you would need 300.000 Plus 12%.

So the total costs of the property is 336.000 Euros.

If you got a 60% mortgage, you would pay in cash 40% for the balance of the property. Mortgage would be 60% of 300.000 Which is 180.000 Euros you need 40% cash of 300.000 Is 120.000 Plus the other 36.000 Euros closing costs (12%), soTotal cash would be 120.000 Plus 36.000 Is 156.000 Euros

Good luck and happy purchasing. Free guide.

Disclamer - this is purely for guidance purposes and in no way constitutes a le-gal contract. Always consult paid professional independent legal advice before purchasing in any country.