Nicholas Marr
Property in Spain the buying process
Buying a Property in Spain this article should be of
assistance in illuminating the purchasing procedure. It
almost goes without saying that these details of the buying
process must be regarded as a general guide and no
substitute for specific legal advice .
Spain has been the darling of the overseas property buyer
for many years in particular the favourite of the British
property buyer. It is an established overseas property
market however this does not mean that it has not had its
problems.
With an ever-increasing number of international investors,
the mortgage market in Spain is highly active, with more
than two hundred local banks offering home loan products in
the country. Your mortgage loan options will greatly vary,
depending on the type of property and the purpose of buying
it. Usually, the lenders offer loans up to 70 percent of
the property value, which is the maximum permissible loan
as per Spanish laws. While most lenders may not lend beyond
three times your income, a few international institutions
such as Barcalys Bank may consider offering four times
individual income. Lenders prefer customers with steady
employment.
Before setting out to invest in a property in Spain, it is
imperative for buyers to understand the intricacies
involved in the buying process. To purchase a property in
Spain, you need a ‘NIE' number or a taxation identification
number. It is crucial to obtain this number, since it is
required for all the formal proceedings of property
purchase. You can obtain this number with the help of a
Spanish solicitor, by giving him a power of attorney. Make
sure that the solicitor has your best interests in mind
when working for you. After selecting a suitable property,
you need to sign a ‘reservation agreement'. At the time of
signing this agreement, you are required to pay an amount
around one or two percent of the property value. The vendor
in turn, officially withdraws that particular property from
the market, to enable your solicitor to proceed with other
formalities, beginning with ‘land registry checks'. After
confirming that the property has a clear title and there
are no outstanding debts on the property, the contract of
sale is signed by the concerned parties. Upon signing, you
are generally required to pay about 10% of the agreed
amount as deposit. For under construction properties, you
should make sure that your builder gives you a copy of the
insurance cover or the bank bond, to safeguard your
investment in case the builder fails to complete the
project.
After completing other formalities, the concerned parties,
their lawyers and bank representatives, in case of a
mortgage loan, go to the public notary's office to sign the
final contract, after which the title deed is transferred
in your name.
Depending on the type of property you wish to buy, the
additional costs on your purchase will vary. For new
properties, a 7% VAT along with a stamp duty of 1% is
applicable, while old resale property buyers pay only the
7% VAT. If you are buying land in Spain, you will have to
pay 16% VAT and 1% stamp duty. Other additional costs may
include land registry fees, lawyer's fees, notary charges
and other extra charges, if you have obtained a mortgage.
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Nicholas Marr is a lifetime property investor and CEO of
Marr International Ltd a UK based property marketing
company that is responsible for one of the worlds leading
overseas property web sites at http://www.homesgofast.com
