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Purchasing a Property
The most common questions we get asked about buying a property in Spain
are related to the legal and financial aspects of ownership. It wouldn’t
be natural if a person was not a little cautious about embarking upon
something that is the unknown.
Buying a property in Spain is in many ways
a lot easier than in other countries. The Spanish system is set up to
protect both the buyer and the seller, providing certain simple steps
would however stress that this guide is intended only to aid in
the understanding of the processes involved and is no substitute
for proper professional legal advice. Other countries’ law
do not apply in Spain, which makes the Spanish legal system very
different from the UK system.
We strongly advise people purchasing
a property in Spain to get legal advice about the property purchase
or the signing of legal documents because if they don’t,
they could find themselves taking unnecessary risks.
Abogado - Spanish Solicitor
Your legal representative “Abogado” will
discuss the many ways in buying a property and advise the most
advantageous method that suits your circumstances. He will also
make all the necessary investigations on the property to be purchased
(i.e. re-sale). Once the Abogado is satisfied that everything is
in order, including finance. It is necessary for the Escritura
(title deed) to be signed before a Notary. You be advised by your
solicitor or by Homelife when this is ready to be carried out.
The Escritura is the title deed containing a detailed
description of the property and proof of ownership. If the property
is a re-sale property then the Escritura will also contain the
recent history and previous details of ownership.
The Notary is a public official who places on public
record through the title deed the sale and ownership of a property.
It must be signed in his presence and must be understood by both
parties. When the Escritura is signed in front of the Notary the
financial transactions are witnessed and proofs of such payments
are incorporated into the title deeds of the property.
Power of Attorney
The buyer usually attends the meeting with the
Notary in person to complete the transaction, but if this is not
possible, arrangements can be made to for a power of attorney to
be granted. It is usually the solicitor who is granted power of
attorney to attend on the behalf of the purchaser or vendor.
The Land Registry System in
After the escritura (title deed) has been signed it will be sent
to the local land registry office. It will be entered onto the
register and the land registry fees will be paid. Your Solicitor
will make payment of the fees and when the completed deeds are
ready he will arrange for them to be sent on to you.
A Spanish Will
Once you own a property in Spain, it is essential
that you make a Spanish Will, if you want the property to be handed
down to your family. The cost is very small and it is worth considering
giving a member of family an Enduring Power Of Attorney. This
enables your representative to continue dealing with your affairs
should you become incapacitated.
Spanish Bank Account
As part of our ongoing service we will introduce
you to a bank once you have signed you purchase contract. You will
be required to transfer monies from your country into your Spanish
bank account in order to complete the purchase.
This can be done
in our offices in Spain or in your country when you return home.
You need to provide two forms of identification (passport and a
driving licence with a photograph is sufficient) and in the first
instance you are not required to place any monies into the account.
it is highly recommended that you allow at least five working days
for all money transfers to reach your Spanish Bank account as delays
do occur within the Spanish Banking system. If payments are late
getting to Spain, this can cause problems with the completion of
Applying for a Mortgage in Spain
When applying for a mortgage,
the bank will normally ask see proof of income (for an employed
person) - two P60’s. Six months
salary slips and two months bank statements.
Income may be measured
on joint income for married couples, so ensure that you also
have details of your spouse’s income if he/she is working.
Proof of identity will also be required again passport and driving
licence will be fine. If you are self-employed, then the bank
will normally accept two years audited accounts as proof of income
plus your last tax statement.
Through our special relationship
with most Spanish banks, our clients may be able to apply for
a mortgage of up to 50-60% and in some cases 70% of the property’s
valuation subject to status. Generally the upper age limit is
75 years of age and repayment periods are usually between 5-20
Investment Potential (Off Plan Sales)
As an investor you have two
main options: Buy to sell and buy to let. Many investors are already enjoying healthy returns on their investments
through buy to sell. As this involves buying property from a development
plan during the construction phase. The increase in value is based
on the demand for new properties.
There has never been a better
time to invest in Spanish property due to the strength of the sterling
and the over all higher standard of living. Returns in excess of
approximately 15-20% have been achieved through this option but
please be aware that buy to sell investments returns cannot always
On the other hand good returns can also be obtained
with the buy to let option due to the Spanish coast being one of
the most popular holiday destinations in Europe. It would be a
good investment plan to let your property while you are not using
it. This can be done privately or through a letting agency in the