BUYING A PROPERTY IN SPAIN. First Part.

WHY BUY IN SPAIN?
The laid-back culture and focus on living the good life, as well as the famous festivals, diverse landscapes and impressive historical architecture, makes Spain a top destination for both holiday makers and ex-pats looking for a new life abroad. It is a paradise for beach lovers. Scattered between the distinct sceneries, lie striking Spanish cities with well-preserved historical centres.

Whether you’re after wandering the streets of the Old Town, enjoying the tapas under blue sky, or gazing down at the rooftops from atop the cathedral, Spain can offer it all. So in short, there are plenty of reasons to move to Spain, here are just a few of them

• the weather – with almost 300 days of sunshine a year
• the beaches
• the food
• good infrastructure
• golf courses
• a wealth of cultural and natural resources
• a world class aviation infrastructure and a modern transport system
• ski resorts
• Last but not least, it´s affordable

WHAT TO REMEMBER WHEN BUYING A PROPERTY?

 When buying a property in Spain, the process can be very different. Make sure that you know what costs are involved, the taxes that you need to pay and the problems that could
occur.
 When an offer has been accepted, appoint your INDEPENDENT solicitor to perform all of the due diligences.
 Sign a contract “contrato de compra-venta”, once your solicitor has checked the details on this.
 Pay the deposit to reserve the property in your name. NEVER pay this unless your solicitor has checked the contract and NEVER pay this directly to a seller or without both parties
signing a contract.
 Arrange for an NIE number “Número de identificación de Extranjeros”.
 Arrange for a power of Attorney, if you need this.
 Open a bank account.

WHAT ARE THE COSTS INVOLVED?

 The Purchase Price: If the seller is not a Spanish resident, then 3% of the sale price of the property will be retained to pay the Tax Office and rest of the price (97%) to the seller.
 Notary Fees: Normally this is paid by the buyer, but this can be negotiated. Notary fees depend on the purchase price. They could ascend to approximately to 0.5% of the purchase price.
 Land Registry Fees: are paid by the buyer in order to inscribe the property at the Land Registry in their name. Land Registry fees are approximately to 0.4% of the purchase price.
 Transmission Tax or VAT+Stamp Tax. In the Valencia Region (including The Costa Blanca) this ascends to 10% of the purchase price. If it is a new property then 10% VAT plus Stamp Tax which is 1.5% of the price is paid and you do not pay transmission Tax.
 Lawyer Fees: could ascend to 1% plus VAT of the purchase price or between 1500€ to 3000€, but this really depends on the value and complexities of the purchase.
 Mortgage Costs: this will include a valuation, which will cost approximately 400€ plus Notary & Land Registry Fees of the mortgage deed.
 Property Ownership Tax (IBI): This is the local tax which is paid annually and based on the cadastral value “valor catastral”.
 Wealth Tax: Payable annually, based on the value of total net assets as of 31st December of each year after the free allowance of 700.000€.

The other costs to bear in mind are:

 Income Tax for Non Resident & Residents.
 Rubbish Collection Tax.
 Water supply and Sewerage Tax.
 Electricity.
 Community expenses – if you are in a community of owners.

INFORMATION PROVIDED BY PELLICER&HEREDIA.