Frequently Asked Questions
Is it difficult to buy property in Spain?
Not at all. In fact Spain is a very popular destination for many overseas investors. Unlike in the UK Spain uses a Notarial system which means that completion on a property always happens in front of a Notary. The new title deeds “escritura” as we call it here is then collected from your legal representative and once all taxes related to the purchase have been paid it is presented to the Land Registry Office for inscription. If you do not have a legal representative, we can introduce to you an English speaking Spanish solicitor who will ensure all legal matters concerned with the purchase are dealt with effectively and professionally. Your solicitor will also discuss with you matters such as Spanish wills, tax and so on.
Are there any additional costs involved in the purchase?
Yes. We advise our clients to allow approximately 10% of the purchase price to cover for costs such as stamp duty, legal fees, etc. Those taking out a mortgage should allow approximately 12% of purchase price as there will be additional charges such as mortgage set up fees, tax relating to the mortgage and extra notary and registration fees as the mortgage is also signed in front of a Notary. At the time of writing the Spanish Government has just announced a reduction in the VAT for new build from 8% to 4%. This measure is temporary and will become to an end at the end of the year i.e. 31/12/2011. The important point to note here is that if you buy a property between August and December 2011 your costs will be reduced by 4%.
Do I need a lawyer to purchase a property in Spain?
We strongly recommend our clients to appoint a local English speaking Spanish lawyer who is fully aware of the local building & planning regulations and in fact we will introduce you to one if you do not yet have one.
Do I need residency to buy in Spain?
No, but it is necessary to have an NIE number before going to completion as one cannot legally complete on a property in Spain without an NIE Certificate. Dealing with NIE applications will be part of the legal services provided to you by your solicitor but please note that the initial NIE application must be requested in person by the applicant.
Do I need a Spanish Bank Account?
Yes you do! As part of our services we will guide you through the account opening process as well. Once your bank account has been opened you can n organise to remit the funds relating to the purchase and taxes, etc. to this account. Of course your bank account will also be used to set up all direct debits to pay for the running costs of the property once you have completed such as water and electric bills, council rates, services charges, buildings and contents insurances and so on. These days most banks will have English speaking staff so if you are not conversant with the language you will still be able to get by but in any case if you get stuck you know that at Veritas Homes Property Group we are always at your service.
How do I convert my currency into Euros?
We have an exclusive partnership with Currencies Direct which is the leading currency exchange in the area with a permanent office in Mojacar employing very knowledgeable and helpful staff. Currencies Direct is in fact an English company with its head office in the City of London and offices in several countries. As with any English company providing financial services it is fully regulated by the FSA and therefore provides you all the safeguards you need. Because all they do is trade currencies they can provide you far superior rates than the high street banks and smaller currencies companies. Also their position of strength means that they ensure that there are no sending or receiving charges levied by banks to remit and receive your money so you will you be guaranteed that there will be no unpleasant surprises. Recent research shows that on average, banking fees and poor exchange rates can cost up to 3% of the property price so for a 100,000 euros property it means a save of 3,000 euros.
If I need a mortgage how do I arrange this?
Spanish banks will offer you (subject to status) very competitive mortgage products. We are happy to introduce you to a bank or a mortgage broker. Typically you will have to provide bank statement, pay slips and credit report for a mortgage to be agreed in principle. A formal offer will only be provided once you formally apply, pay for a bank valuation, the bank surveyor has visited the property and the bank’s head office has agreed to the loan. Please note that most banks are only willing to lend about 50% or 60% of the lowest value between valuation and purchase price. If you are looking for a 100% mortgage let us know so that we can concentrate on showing you only these types of properties. These days 100% on a normal re-sale property is virtually impossible so don’t waste yours or our time viewing all types of properties if what you really are after is a 100% mortgage. Your only chance to get a 100% mortgage is on a bank repossessed property and the lender will also need to assess your ability to pay back the loan so you will be expected to provide a myriad of documentation to proof your income, savings and so on. If you are self employed then you will also need to provide tax return, accounts and so on. We will go though the entire list and guide you the entire process once we know what your intentions are.
Are all the properties freehold?
All properties sold in Spain are freehold. Furthermore, all properties listed by Veritas Homes Property Group will have all their paperwork in order. We would also have done our searches and would have copy of the deeds, utility bills, etc. ready to be sent to your solicitor so that there is no unnecessary delays.
We would like to buy a holiday home in Spain to let out - is this possible?
Yes, there is no problem in purchasing a property to let out, even if a mortgage is required. If your property is in the Mojacar area we will be able to offer you our rental services. Things to consider if this is your goal: Never assume that you will always cover your costs, have a back up plan if you need to generate income or pay a mortgage. A good investment can give great rewards but a poor choice can be a real burden. We have a very good track record of advising successfully in this department. Also, be sure to consider properties that are attractive to tenants and not just to you; take your heart out of this decision and use your head.
Since the financial crisis started a great majority of our clients are actually buying properties outright with no finance involved. Not surprisingly, these cash buyers purchasers clearly feel that investing their funds in properties being offered for sale at greatly reduced price is a far better long term investment than leaving their funds sitting at their banks or elsewhere earning little or no interest.
Finance though is always a critical decision when buying property and getting the right finance product is crucial and can make the difference between a good buy and a great buy; especially if you are considering an investment purchase. No doubt the current financial crisis has made banks tight their lending criteria but there are still plenty of mortgage products available.
We always recommend that those clients needing finance are seen by a broker or bank officer so that they know what they can borrow before they can commit. This is why at Veritas Homes Property Group we have teamed up with leading banks, financial advisers, currency exchange companies and legal professionals to make the process simple and to get the best value possible product for our clients.
Despite the amalgamation between the “Cajas” UK Building Societies, banks in Spain are still plentiful with branches located everywhere and there is always one English speaking member of staff. Just like at home, banks here offer internet banking, cash points and all the services you are accustomed to and in fact would expect from a financial institution. We have good contacts with all banks operating in the area.
If you're looking to buy a property in Spain you will have to exchange large sums of foreign currency into Euros. Using your bank for this is not a very wise move as it will be costly due to poor exchange rates, high transfer fees and commission charges. For this reason it is important that you consider alternatives to your bank that are able to get you more for your money.
We exclusively recommend Currencies Direct, a British company with head office in the City of London and regulated by the FSA. As it could not be any different the company that we have chosen to assist our clients has an outstanding reputation in the field of overseas property and on average save our clients the equivalent of 3% of the property price by providing better exchange rates and eliminating all the expensive banking fees. They work hard to ensure that all our clients benefit from unbeatable rates of exchange, free transfers and no commission charges. In addition, the outstanding levels of customer service they provide means that exchanging the currency you need to pay for your property is hassle free. In our experience it is well worth comparing their rates against those of your bank in the UK - you will be pleasantly surprised and their plain speaking professionals make the entire process very easy and understandable.
We take great care in what we do and in fact all properties that we list have all their legal paperwork checked and copies of title deeds documentation as well as utility bills, etc. are readily available. We also always advise our clients to appoint a lawyer to look at the legal aspects of their purchase as two pair of eyes are always than one. We have teamed up with lawyers in the area and are happy to introduce them to you should you do not have a lawyer yet.
As you would expect schooling is compulsory and is provided for free. Those families with young families buying in the area will need to first register with their local town hall before their children can be enrolled in the local schools. Registration at the town hall is very straight forward and one will need to present their title deeds as proof of residence.
Legalities and Conditions of Sale
Legal disclaimer and Data Protection Act
As per the law no. 15/1999 of 13th December regulating data protection in Spain, CHILDS DOS SANTOS S.L. informs all users of this site that the personall details provided by you via this web site will be incorporated to a file and will be electronically kept and managed by us.
The details provided will be used by us or associated companies to provide products and services and communicate with you or any person(s) whose details have been provided by you.
We therefore inform you that should you wish to access, amend or cancel the information we have about you please contact us via e-mail: firstname.lastname@example.org or by post: Apartado de Correos, 1471 – 04638 – Mojacar (Almeria).