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Property Buying Process
(without the Gobbledygook)
We aim to set out below the process most Brits face on purchasing their dream property, which we now summarize
PRE PURCHASE REQUIREMENTS
You will need to obtain a NIE Number (National Identity Number) from the Spanish National Police Station, (ideally in the area you are purchasing, although there are ways around this) this simply involves filling in a form, for which an additional Photostat copy will be required and 2 copies of your Passport. You should be given a temporary number there and then (this will usually be ok for the purchase) which will correspond to the final number available for collection in around a Months time. Your Solicitor will ask for this number.
You will also need a means of paying for the initial holding deposit, you may wish to draw from a credit card or make provisions by bring extra cash or informing your bank, in case you see the house of your dreams. Make sure this is only handed to your solicitor Not the agent or vendor.
A Spanish Bank Account will be necessary for transferring UK funds for the official deposit and/or purchase this can easily be arranged and is straight forward, simply ask at the branch you choose and take your passport with a small amount to open the account, say 50 Euros upwards. Save Money don't just transfer cash speak to us first, we will help you save thousands.
FINDING YOUR DREAM HOME
Many web based companies offer their homes on the web and most are reputable companies offering up to date properties and prices, however be warned, some may not be so reputable and offering properties that could be a few years old with prices to match but on visiting the office when in Spain, you find Prices are much greater than originally advertised and the agents try to sell on more expensive properties with mortgages attached. We are aware of a number of companies operating in this way. Always check a number of sites to compare prices in select areas or ring us for advice.
You may wish to let us know what you are looking for and we will try to match your wishes with a property to match your budget, possibly e-mailing you photos to view before you commit to fly out for viewing, remember we may also be able to find you suitable accommodation at short notice if desired.
On finding your dream property, you will obviously wish for the vendor to withdraw the property from sale, whilst legalities commence. We recommend that you immediately speak to a good English Speaking Spanish Solicitor to act on your behalf (We can recommend a number to use and will accompany you if in the Costa del Sol) and offer a small holding deposit (say 1% of the purchase price, which should be paid to your solicitor only) until the initial legal checks are made by your solicitor. Despite what some agents will say, most vendors will agree with this practice, if advised by your solicitor.
Within a few days your solicitor will have carried initial checks out with the Spanish land registry to establish that the property is what it says and who it belongs too and that no charges are placed upon the property. (Debts on the Property would become your responsibility if not settled before purchase) If everything is OK then the solicitor will draw up a contract for exchange of the LEGAL 10% deposit required to officially secure the property. Both parties will sign this agreement which will stipulate the date of exchange of contracts (to complete the sale) and monies will be given to the vendor, and completion will be done on the agreed date at the Notary (high legal office).
Note: The initial 1% deposit would normally be returnable held in a clients account by your solicitor but the legal 10% deposit once paid is non returnable should you not complete,( unless there was a serious problem come to light with the property) however if your vendor pulls out, then they would have to return twice that amount to you. So on paying the 10%, the property is as good as sold.
Should problems be found (a common one is to find the land registered but not the property which may have been built at a later date than the land was last sold). The Solicitor will inform you of it and advise on the route to take. (most problems in Spain can be easily rectified by a good solicitor and may incur a small fee, usually paid by the vendor, as would be the case to register an unregistered property as mentioned above.)
Take your Solicitors advice if a property is 'illegally' built, he should be able to get it Legally registered on the deeds (escritura) if he can't, then find something else.
Once a Date has been agreed to complete, The solicitor will continue his/her checks and arrange the time to meet with the vendors and agents usually at the Notary Office, (if the vendor is very ill and at home or in Hospital on the date, the parties and Notary will gather there) to meet in a room, where the contract will be read out and explained to you and on agreement that everything is ok, the Notary will enter and again either read out or explain the contract to you, at which time all parties will sign. (it may only take a few minutes, although it is common to wait up to an hour or so for the Notary to put in his/her appearance!. The Notary office is usually a very busy and noisy place!)
The Balance of the full asking price (black and white money see below) will be made at this meeting and you will walk out lighter but the legal owner of the property.
A feature often witnessed only a few years ago was that of buying property in Spain by paying a percentage of the asking price in undeclared cash to the vendor (known as Black Money) This obviously reduced the purchase price entered on your deeds which would save the vendor tax on any profit he made and reduced the purchase tax you would have to pay.
The Maximum we recommended paying in black money was 50% of the total purchase Price however it was better to pay less than this percentage if it was possible but many did pay much more than this amount...We did and still recommend you ask your solicitors advice, as paying too much black Money would cost you much more, after completion if the declared amount, was or is less than that, valued by the town hall..
Remember you would have needed to find a Cash buyer when you sold or be faced with a hefty tax bill on an enlarged profit. Don't worry if approached about this subject, the vast majority of past purchases were conducted this way and we feel sure this will continue in a much reduced form for some time yet but it is our belief sometime in the near future! the law will be tightened even further and this will become a thing of the past..
Also it can be a bit daunting collecting large amounts of cash from the Bank, to satisfy this Black Money element, usually in plastic bags, to the Notary ...do get some assistance and advice on this if you intend to get involved in this old practice.
POWER OF ATTORNEY
You may elect a power of attorney to act at any stage of the buying process should you not wish or be able to attend in person. It is common and recommended that you use your Solicitor to act as such, if required. You will need to give a signed declaration to this, which should be witnessed and logged at the Notary.
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