Once you have decided on the Spanish property you wish to purchase and the terms and conditions have been negotiated with the vendor then a deposit of 10% of the purchase price is required as official confirmation of your intent to buy that Spanish property. The remaining 90% is payable on the signing of the title deeds before the Notary.
If you are purchasing a new construction then the constructor will ask for stage payments to be made on the property. These can vary dependent on the constructor and the length of time remaining to completion of the construction.
Appointing a solicitor (abogado)
Whilst it is not a necessity to have a solicitor to purchase a villa in spain, it is highly recommended. They will be able to do the necessary searches and check out any outstanding debts that may exist on the property as well as help with contracts and NIE numbers. They will also check the legal paperwork and make sure the property has the required permissions. You are free to appoint a solicitor of your choice, or if you prefer we can recommend one.
NIE number (Numero de Identificacion de Extranjeros)
It is essential to have an NIE number for any financial dealings you may have in Spain, including buying Spanish property. Obtaining an NIE number is a simple process that will normally be dealt with by your solicitor at the same time you make your purchase and the price for this is generally included in the fee for the conveyancing. However, you can apply for one separately via a Gestor (fiscal representative) who will normally charge around 30 or 40 Euros.
Applying for a Bank Account
Whilst it is not a necessity to have a Spanish Bank Account to purchase a property in Spain, it is generally a good idea. Again, the solicitor will usually make all the arrangements for you at the same time as the Conveyancing. If you prefer to arrange a bank account yourself we can help with recommending good local banks with staff that speak English.
Applying for a Mortgage
You can choose to apply for a mortgage in Spain or from the UK. Mortgage rates in Spain tend to be slightly lower than in the UK, currently around 5% but the arrangement fees are usually much higher. Spanish banks will normally lend up to 70% of the property value (not necessarily 70% of the purchase price). You will need to prove that you have sufficient income and you will also need to put down a minimum 20% to 30% deposit.
It can often be more practical and cost effective to simply re-mortgage your home in the UK. We can arrange for a consultation with a fully qualified and independent mortgage advisor if you would like to discuss your options.
Your appointed solicitor will carry out all necessary searches on the Spanish property; to ensure that it is owned by the vendor, it has planning permission, there are no outstanding debts or charges on the property etc.
Once the searches on the property are satisfactorily completed the deposit (usually 10%) will be paid and a completion date will be agreed in accordance with the terms and conditions of the contract. The next step is for the title deeds to be signed by both the buyer and the seller before the Notary on the day of completion.
This is a solicitor appointed by the Spanish government to witness the signing of all legal public documents. In this case the title deeds (escritura) of the property. He represents both the buyer and the seller. The Notary fees are around 1% of the purchase price of the property and must be paid at the time of the signing of the deeds.
The Original signed document is retained by the Notary who will apply for a formal change in the land registry. The purchaser will receive an initial legal copy of the title deed which is signed and stamped by the Notary. The official title deed can take a while to be processed and until then this is your official proof of ownership and must be kept in a secure location.
Purchase Taxes and fees
We recommend that you allow a sum of around 9 to 10% of the price of the property to cover payment of purchasing fees e.g. land registry fees, notary fees, legal fees, transfer taxes.
The above information is intended to outline in brief the current rules that are presently in operation and is intended as a guide only and in no way as a substitute for professional advice.
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