Buying Your Ideal Property in Spain with Voss Homes

Every Question is a Good Question

We want to make purchasing your dream property as stress free as possible by “holding your hand” from beginning to end and even after you have moved in. Take a look at our "What our Clients Say" page by clicking HERE.

We have been in your shoes ourselves when we bought our property in Spain, ours was an old spanish cortijo to be reformed.  More recently our two daughters have each bought properties, one being a village house and the second a villa, and then an apartment in the local town primarily for our son... so we have a lot of experience being on the ´receiving end´ as the buyer......  Therefore ...... 

From the first time we meet, we will make sure you are aware of what our area has to offer and to have all the legal & financial information you require.

We want you to be 100% happy with your new home, so make sure you ask everything you want to ask so you receive the right answers. No matter how trivial you think the question may be.... 

Here is a brief summary of some of the information you will need to know.

The Costs

We, at Voss Homes do not make any charge to Buyers in assisting you in your property search.

The costs you will incur will be property purchase tax, land registry, notary and legal fees.  All of which are payable in addition to the purchase price of the property.

Collectively the additional costs in Andalucia total  9%  of the purchase price.  Broken down, it comprises 7% for the purchase tax and approximately 2% for land registry and  legal fees. If you are buying a property for less than €100,000 then it is advisable to calculate the 8% or 7% government purchase tax and add approximately €2,500 to cover your legal fees etc. Your solicitor or conveyancer will give you more accurate figures once you have chosen the property.

If you are tax resident in Spain and the property you are buying is your main residence for a purchase price  less than 150,000 euros, the purchase tax in Andalucia is reduced to 7%.  In low populated areas such as Zurgena or Taberno it is even less than this.

If you are buying with a mortgage or buying an off plan/ under construction property, please budget  12% to 13% in addition to the purchase price.

If you are buying in the Murcia region, the purchase tax is 8% of the purchase price plus approximately 2% for land registry and legal fees.

NIE number applications may carry a separate charge estimated at 110€ per person, depending on the charge of your solicitor.  As part of the conveyancing service, your solicitor will also transfer the utilities and rates and rubbish standing orders into your name and setup the direct debits to pay these.  The utility suppliers may give a small charge for the contract transfer.

VERY IMPORTANT:  All properties have a rateable ´fiscal´ value. If you are buying a property that appears to be a real bargain then please ask the estate agent or your solicitor to confirm the rateable (fiscal) value, just incase it is higher than the price you are paying. It is rare but it needs to be checked.

What are the implications ... if the rateable value is higher than the agreed purchase price then you will pay the % purchase tax on the rateable value rather than the purchase price.  Whichever is the higher of the two. It is definately a good idea to check this to avoid any unwanted surprise later!. Your solicitor would check this for you.

eg. If you buy a property at €100,000 you think you will pay €7,000 in purchase tax, but if the rateable value is €120,000 you will pay 7% on that which is €8,400 (€1,400 more). Your solicitor would confirm the actual amount.

MORTGAGES : If you are buying with a mortgage and you are not already tax resident in Spain, please note spanish banks will lend aprpoximately 60% of their valuation for properties on rustic land and 60 to 70% for properties on urban land. Therefore, allowing the purchase costs it is sensible to calculate you need approximately 50% of the purchase funds available to support your mortgage application.  If you are tax resident in Spain, generally the banks will lend an additional 10%.  If you are tax resident in Spain, most banks will lend up to 80% of the purchase price.

Legal Representation

When buying a property, it is essential you instruct good legal and independent representation ie, a solicitor or conveyancer.  We can provide a list of multi-lingual independent professionals and of course you are free to choose representation of your choice.  We recommend you do not use the estate agent as your legal representative or the same representative as the seller.  We also do not recommend only one solicitor/conveyancer to you, we will provide a list of several legal representatives for you who can speak a language of your choice, to research and make your own choice.

Your legal representative will receive copies of all property documentation and undertake all checks on your behalf to ensure you are fully protected and informed in the purchase of your property.  They will also  provide you with a full breakdown of the total purchase costs.

They will check the property documentation and ensure everything is in order for the sale.  Sometimes, if the property has not changed ownership in many years, legilsation will have changed and there may be new/additional documentation required or to be updated  (such as LFO or AFO).  This is why you have employed them and they will advise you accordingly.  They will also check the boundries and that all debts such as mortgages etc are paid before you complete on the purchase at the notary. Your legal representative will also ensure utilities such as rates, rubbish collection, electricity and water connections are all paid to date and they will arrange the transfer to your name post-sale or a connection with a new supplier.

If you wish you can instruct an architect or builder to survey the property. This will be at your cost. 

Usually the only upfront fees your legal representative will charge is for arranging power of attorney and for your NIE application. The rest is usually paid at completion and the purchase taxes paid approximately 30/60 days later. However, some solicitors do ask for a percentage of their fee in advance. 

Please ensure you have funds in your Spanish bank account prior to completion so your solicitor can confirm the date of sale and process the sale for you.

NIE Numbers

You do not need an NIE number to reserve a property but you do need it to buy a property.

Your legal representative will apply for your NIE numbers.  The NIE is applied for in person and collected approximately one week later (in most areas).  It is often far simpler to give your legal representative power of attorney to apply for and then collect your NIE´s on your behalf.  You can reserve a property without an NIE but it really is needed to be in place for the purchase and subsequent payment of purchase taxes.  It is also needed to open a bank account (alongside other property documentation for which your solicitor will advise you). NB: You also need an NIE to buy a car and undertake other transactions with tax implications.

Currency Exchange

Voss Homes recommends Currencies Direct who have offices in the UK and Spain with one quite locally in Mojacar.  Please click on the link on the right of our main page to find out further details.

Buying Process & Completion Date

Having found your ideal property one of the first steps is to instruct a local, recommended legal (english speaking) representative (Abogado, Gestoria or Asesoria) and to pay a reservation deposit of €3,000. 

Your offer is not officially accepted until this €3,000 is paid.

You will be given a receipt (Reservation Contract) as proof. The property is then taken off the market and the agreed purchase price is confirmed.

The properties paperwork is then sent to your legal represtative so they can undertake all required paperwork checks. This usually takes 3 to 4 weeks.  Your legal representative will liaise with the sellers legal representative as required.

Once your legal representative has completed their investigations they will prepare a purchase contract and you then pay the balance of a 10% deposit (this is 10% of the purchase price less the €3,000 you have already paid). This contract states the documentation of the property in detail, staged payments to date and the planned completion date.

Your legal representative should give you a breakdown of your purchase costs and the staged payments, including the purchase taxes etc.  

Once all matters are in place, the legal representatives will confirm a completion date and details of which Notary this will be.  This process usually takes between 1 to 3 months after the initial reservation of the property but can vary according to your or the sellers circumstances.

As mentioned above, it is often simpler to give your legal representative power of attorney (POA) to apply for your NIE´s, if you do not yet reside in Spain then it is sensible to also give your legal rep power of attorney to open a bank account and sign for the purchase on your behalf.  The POA is purely related to matters concerning the purchase of the property and your legal representative will consult with you on all matters before signing any document on your behalf.  Of course if you prefer to attend to open a bank account and/or sign for the purchase then you can do this.  However, if you think you may be unable to attend then it is wise to give the POA just incase.

Prior to the notary signing date you are entitled to a pre sale visit to the property.  If you are not in Spain for the notary signing, we will undertake the visit on your behalf.

At the Notary on completion day, once the signing is finalised and payment for the property has taken place, the keys to the property are given to you.  At this point the sellers are not allowed access to the property. If you are not present at the signing, the keys can be held by your legal rep or ourselves, whichever you prefer.

A basic copy of your new deeds (Copia Simple) is usually given to you at the Notary. The fully registered deeds are then processed which takes 2-4 weeks and once the purchase taxes etc are paid, they are collected by your solicitor and you can arrange to collect them.

CONGRATULATIONS!

Your have now purchased your property in Spain.

Remember, to ensure the property has house insurance and to ask your legal rep for copies of your contracts for utility supplies.  Also post-sale, as a Spanish property owner you will need to make a Spanish Inheritance Will which your legal rep can assist you with.

If your spanish property requires renovation,  a swimming pool, a little TLC or ongoing management of a pool/garden maintenance etc., then we can help with various local trades professionals / architects etc.  If you need assistance with purchasing furniture / furniture removals, insurances, alarm, internet / telephone connection, sky television and general day to day queries then again, please let us know and we can help.

Thereafter please feel free to contact us if you need help or advice.