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Buyers Guide
What are the key points you need to know?

This Buyers Guide has been devised to offer general advice and information only.

When buying a property you should always have legal representation to ensure the smooth running of your purchase.

GENERAL TIPS and GUIDE TO THE BUYING PROCESS

If you are going to buy a property in Spain you will be pleased to hear that there is certainly no shortage of properties to buy. However, you need to pay careful attention to which agent you choose and visit the area in which you would like to buy.

Many people choose to rent for a short time in the area so that they can get a more realistic feel for the location. Once you have decided where you would like to buy, choose a range of properties for consideration then set yourself a limit as to how much you want to spend - then stick to it!

Once you have found a property you should visit it at least 2 or 3 times to make sure that you are not only happy with the property, but also to check the neighbourhood. It is well worth talking to some of the neighbours to ask their opinion of the area.

Check all the amenities, electricity, water, gas etc and have the building checked by a builder or surveyor.

Once you are happy it is then very important that you engage an english speaking Spanish Lawyer or a solicitor who is very experienced in Spanish Property Law. You should ask the lawyer to check on the Property Registry( Registro de Propiedad) to establish both the ownership of the property and to check for any outstanding debts before you sign anything.

Once checked you can the sign a Private Contract. This details the legal description of the property, purchase price, completion date etc. At this point you will be asked for a deposit. This is usually 10% of the purchase price if you are completing within 30 to 60 days, but can vary depending on the individual terms of the sale.

When you have paid for the property, the seller will issue the public deed of conveyance, this is call the Escritura. The deed is issued before a Spanish Notary (Notario) who then forwards it to the Tax Office to be assessed for stamp duty and finally sent to the Property Registry for inscription.

PROPERTY PURCHASE COSTS

6% TRANSFER TAX (I.T.P.) This is payable by the buyer provided the Vendor is not a developer or normally trading in the business of resales. At present you would pay 6% on a resale property and 7% for a new property.

7½% (7% and ½% STAMP DUTY) for any villa, apartment or garage annexed to an apartment where the vendor is a developer, promoter or habitual trader in these properties.

16½% (16% VAT and ½% STAMP DUTY) for parcels of land, commercial premises or commercial garage spaces where the vendor is a developer, promoter of habitual trader. This tax covers all new urbanised land parcels or new commercial premises and resales only where the vendor falls into one of the above categories.

NOTARY FEES AND PROPERTY REGISTRY INSCRIPTION FEES
Notary fees should not usually exceed £566, although the cost may increase if the deed is complex. For example an apartment costing around £186,000 would cost approx £298 in notary fees. The property registry fees are 65% of the Notary Fees.

PLUS VALIA
This is a added value tax set by the Town Hall Index of the value of the land (In sq.metres) from the prior (vendors) purchase to the present sale. Although this tax relates to the seller, it is the purchaser who pays the tax. This cost should be verified prior to purchase.

FIRE INSURANCE - If you are taking out a mortgage to purchase your property, then fire insurance in Spain is Compulsory by Law. Comprehensive household and contents insurance is available, as is Life Insurance to cover the mortgage in the event of death.

In conclusion, the total official costs in purchasing a property should be between 7 - 8½% of the purchase price, plus the Plus Valia if applicable.

OTHER COSTS - AN OVERVIEW

Just as owning a property in the UK, there are other costs relating to being a Spanish Property owner. Below you will find a rough guide as to what costs you will be responsible for.

LOCAL RATES - Local rates (similar to Council Tax in the UK) are payable annually and are calculated on the rateable value of the land by the Spanish Tax Office.

RUBBISH COLLECTION AND WATER RATES - Rubbish collection is managed by the Town Hall and is usually payable every 6 months. Water costs are calculated by a meter and payable every 3 months.

COMMUNITY FEES - These fees are payable if the property is part of a Homeowners Association whereby all the residents within an estate enjoy some level of shared facilities. This is similar to UK housing associations where residents pay an annual charge for grounds maintenance for example. In Spain these fees could cover items such as lift maintenance, services of a hall porter, lighting for common areas etc.

ELECTRICITY - Electricity is normally charged bi-monthly with minimum rates applied.

TELEPHONE - Telephone services are also charged bi-monthly. Standard rates can vary.

PURCHASE CHECKLIST

Please note that this is a 'rough guide' to buying property in Spain and is by no means comprehensive. When buying a property you must ensure that you engage a suitably qualified lawyer to handle your purchase. Below is a general checklist for the key items you need to ask for.

* Make sure that you have a contract you can understand in your own language. Ask for confirmation about how and when you will pay.

*Before signing documents, at least obtain advice from a lawyer or property consultant.

* A Nota Simple from the Registro de la Propiedad, showing that no mortgages are registered against the property.

* A check on the legality and Planparcial if you are buying within an urbanization. You also need to check that a building permit is available if you buy a plot

* A check on the IBI or the Declaration de Obra Nueva. (This is proof or otherwise that the annual real estate taxes have been paid - or not.)

* A receipt for paid-up community charges and a copy of the Statutes if you buy within a condominium.

* Ask to see copies of owner's paid up bills for electricity, water, rubbish collection and the telephone.

* An Escritura de compraventa signed by a notario.

* Proof of payment of fees and taxes, and the five, 5% deposit to Hacienda if you buy from a non-resident.

* Check when you will get your final escritura publica, which makes you officially the property owner.

Important note for buyers in Valencia!
If you are considering buying property within the Valencia Region of Spain beware. After completing your purchase you could find yourself to be one of the owners who is forced to give part of your land back to the local authority under a Land Grab law passed in 1994.
If you intend buying in this area check and double check with your lawyer that your property will not be affected.

RESIDENCY PERMITS - Residencia

Detailed below is a guide to applying for a Residency Permit (Residencia) which you will need if you intend living in Spain for more than 6 months in every year.

To apply for Residencia you will need to go to your local Police Station and ask for the following:-

* A current list of the documents needed for making an application
* An application form called Solicitud de Tarjeta en Regimen Communitario
* Form No.790

Take the Form 790 to your Spanish bank for completion. This form confirms your Spanish Bank account number and money held there.

If you are a Pensioner you must also ask the bank for a Certificado Bancario which confirms the amount of your pension and frequency of payment.

You then return to the Police Station with:-
* Completed Form 790. Plus a photocopy.
* Certificado Bancario plus a photocopy.
* Medical Form 121 or your Spanish medical registration card, plus a photocopy of each side.
* Certifica de Empadronamiento; This is a card sent to you by the local Town Hall which proves that you are on the Electoral Register.
* Passport and one photocopy.
* Four passport size photos.

Each individual must apply personally with all the relevant documents. Once applied for, it can take several months to process. Once it is issued it is good practice to carry a photocopy with you.