Buying Your Home Costs but Buying your house in Spain needn’t be a trial. It’s supposed to be an enjoyable experience and we will do everything possible to ensure that it is. So what will you need to do? Well, once you have found your dream home and agreed a price with the owner you need to place a “holding deposit” of at least 1,000 EUROS (€) up to 6,000 EUROS (€) (depending on the value of the property) to get the property of the market. This can and should be paid via a lawyer for security. Then once the relevant papers have been checked the lawyer will pay this to the owner as part of the full selling price! If you haven’t got a lawyer already we will be happy to introduce you to one. We can recommend the choice of 3 lawyers and they normally charge 1% of the value of the property or an agreed fee for undertaking the conveyancing with 20% being paid when he is instructed and the balance on completion. Assuming everything is in order the balance of the 10% deposit is paid within 2 weeks. If it is not in order then no further money is paid until it is. Completion is usually within a further 2 – 4 weeks but all of these timings are negotiable. We also advise you to get a Spanish will prepared and the charge for this varies but if you budget for about 120 € for 2 joint owners this should be plenty. We recommend you allow a further 1,200 € to cover notarial and land registry fees. The Spanish system of conveyancing involves the participants in the transaction appearing in person before the notary. To avoid the need for inconvenient flights etc. we recommend that you provide your lawyer with a power of attorney to act for you throughout the purchase. This avoids the absolute necessity of you being here for completion and is very useful if flights are a problem, time off work is difficult or the legal process requires dates to be changed at short notice. We will also help you open a Bank account for the transfer of funds and to set up standing orders for your utility payments. Finally your lawyer (if you require) will help you apply for your fiscal identity number or N.I.E The Andalusian regional Government have increased property transfer tax for second hand properties and stamp duty for new properties.
Example of a 2nd hand property valued at 100,000€
- IVA (Spanish equivalent of VAT at 8% for 2nd hand properties) 8.000€
- Legal fees (Spanish Lawyers fees at 1%) 1.000€
- Notaries fees (Approx 0,5%) 500€
- Land Registry & Gestoria fees (Approx 0.5%) 500€
- Total 11.000€
Properties sold for over 400,000€ are calculated as follows:
- 8% up to 400.000€
- 9% between 400.000€ and 700.000€
- 10% over 700.000€
- Stamp duty (On New Properties at 1.2%)
- Transfer Tax is also applicable for a private parking spaces, when purchased independently.
- up to 30.000€ – 8% Transfer Tax, between 30.000€ and 50.000€ – 9% Transfer Tax and in excess of 50.000€ – 10% Transfer Tax
There are some items not always applicable to every purchase such as plus value tax, a local government tax on the increase of the value of the land since the last sale (usually £40). Connection charges for water and electricity on new properties are approx. £ 300/400.
We get a lot of enquiries on this subject and it’s often difficult to know what advice to give, particularly as everyone’s requirements are different. Here are a few ideas;
- This government web-site has plenty of info about what needs to be done and about applying for a free European Health Insurance Card (EHIC).
- Private Health Care; The Spanish NHS is excellent whereas private care can be variable in quality. Where the private sector scores is that the patient has more control over appointment times etc. If you are thinking of private health cover (and you will need this if you apply for a “residencia”) choose a Spanish company like Sanitas rather than a familiar name from the UK like BUPA. They tend to be cheaper.
- Availability. Every village has a “consultorio” or clinic where you can meet your NHS GP and where some form of emergency treatment is available around the clock. It may be a paramedic rather than a doctor but for simple repairs or an immediate response in an emergency it’s great that there’s someone quickly available locally. The service you receive in such places has always been fast, courteous, efficient and friendly There is a network of regional hospitals ensuring that a high level of service is available reasonably locally.
- Pensioners are automatically entitled to free NHS treatment.
- Medication. Most medication is easily available in Spain as in the UK. Moreover your pharmacist will give advice on routine treatments to save a visit to the doctor. NHS prescriptions are at discounted prices. Private prescriptions mean paying in full.
- Language. The biggest problem. In serious situations most hospitals have access to interpreters whilst many Doctors have some English for professional reasons. Nevertheless language can be a problem.
Advantages to having a Spanish Mortgage:
- Should you wish to sell the property, the buyer can take over your mortgage thus saving money for you, the vendor, and the buyer.
- Banks conduct their own legal searches with regard to the property prior to mortgage. This is not a substitute for legal advice and they are not lawyers, however these searches ensure more protection for the purchaser.
Documentation required in order to process a Spanish Mortgage:
- Passport or Spanish N.I.E Copy If employed; Last P60 (or tax return), last 3 months pay slips and company reference letter.
If Self employed; Last self assessment as presented to the Inland Revenue, last 2 years of accounts and chartered accountants letter confirming net income for the last 2 years. ” The maximum loan you will get in Spain is between 70-85% of valuation. Frequently however, depending on the type of property and the valuer’s appraisal the figure will be nearer 45% of the purchase price (basically country property has for a long time been neglected and unwanted across the whole of Spain, the current upsurge of interest is driven by foreign buyers and has bemused the locals. Spanish valuer’s tend to reflect local tastes and preferences and therefore tend to under value.) If you do need a mortgage we will help you through every step and advice you if it is possible or not. Our agency also has contacts with Banks regarding repossessed properties that are offered up with very good conditions attached. Please contact for more details.
For international money transfers we recommend Currencies Direct