Guide to Buying your Spanish home


 Guide to Buying your Spanish home

Additional Costs associated with buying Spanish Property

We advise you to budget for around 13% of the purchase price. (if you are taking out a Spanish mortgage 15%). 10% ITP (Impuesto Transmisiones Patrimoniales), 1% property tax (Spanish stamp duty only applicable on new properties), 2% to cover solicitors fees, notary fees, insurances and a further 2% for a bank mortgage arrangement fee.

All purchases are completed in front of the public notary and both parties have to be there in person or appoint a Spanish solicitor to act as power of attorney for them (this must be done at the notary before the completion date. This means that if a vendor or purchaser are not present in Spain their power of attorney is able sign at the notary to complete of sale on their behalf. 

Resale Property 

For a re-sale property expect to pay a reservation deposit a minimum of 3000 euros and further deposit to make it up to 10% of the purchase price within 28 days. The balance would be due on completion which usually takes 6 to 8 weeks.

New Property

The purchase of new property expect to pay a 3000 euro reservation deposit and a further payment of 25% to 40% 30-45 days after reserving the property with the balance due on completion of the property. Developers offer different build times (some have brand new key ready properties for immediate occupation) and different payment structures and some are negotiable. The actual terms of the individual property you were interested in would be outlined during the viewing and before you make any financial commitment.

Opening a Spanish Bank Account

Throughout the Costa Blanca there are branches of all major Spanish banks. Most banks cater for English, French and German speaking customers and offer current and deposit accounts, debit cards, credit cards with internet and telephone banking. To open an account you will need your passport. We are happy to help you to open a bank account and will accompany you to the bank if you wish.

Will my property provide a holiday rental income?

There is the Summer holiday, winter sunshine breaks and golf holidays.Costa Blanca rental properties are in demand. Various factors are involved for example the season, location, if there is a private swimming pool etc.The rental income will be determined by the frequency you are able to rent your property out. For holiday rental properties you must obtain a tourist Licence.

Transferring money

You can transfer money to Spain direct from your own bank or if you prefer you can use a specialist currency transfer company. You will receive the commercial currency exchange rate which is always higher than the tourist rate. The rate you will receive is dependent on the exchange rate at the time. The cost to send currency to a Spanish bank from the UK can vary. However the majority of Spanish banks make a charge to receive funds from an overseas bank and from other Spanish banks. A typical charge is around .04% of the amount transferred. In our experience it is better to use a currency specialist

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Spanish Mortgages 

Holiday home mortgages are generally for non-resident property buyers who do not live in Spain The maximum borrowing amount is up to 70% of the property purchase price (or valuation if lower)

Primary residence mortgages are for those where the property in Spain will be their main residence and they already pay their income tax in Spain, or in exceptional cases are about to start paying taxes here. For this type of mortgage, it is possible to secure mortgages up to 80% of the property purchase price.

 Investment mortgages are for those property buyers planning to rent out their property after purchase, or where the buyer already has at least one existing mortgage in Spain. If the banks believe that the property will not be for sole use by the owner or that a commercial activity will be carried out there, they would normally treat it as an investment mortgage. Generally speaking, banks will only offer 50-60% of the property purchase price (or valuation if lower) for these types of mortgages.

 A mortgage advisor will be able to give you a full breakdown of costs.

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