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Top 10 Tips1. Research & Plan - Don't buy of the peg and expect it to fit! Research your chosen area using the internet, bookstores and property shows. Consider which areas will best suits your plans; if you are retiring or buying a holiday home you might want to be away from the busy seaside towns(driving and parking can be a nuisance, as can the noise). If you are planning on renting out the opposite may apply you'll have to think about coastal resorts where holidaymakers are plentiful, giving you the best possible chance of bookings throughout the season. Don't buy a one-bedroom apartment on a golf course - there aren't many golfers who play on their own! Establish your budget at outset don't forget all the associated costs & taxes, which can be a further 12-15% of the purchase price. 2. Open a Spanish bank before your viewing trip To avoid commissions, transfer fees and bank charges open a Spanish bank account and transfer your holding deposit funds before flying out to Spain. (find out how to save charges on currency exchange) Transferring funds between accounts in Spain should carry no charge, however check this is correct with your bank before transferring deposit funds to your lawyer. 3. Notify your Credit Card Company If you are planning on using your credit card to pay the holding deposit let your card supplier know when & where you are going and tell them that you anticipate making a large payment. The credit card company will make a note on your file to avoid any complications and ensure the payment is accepted. 4. Engage an independent English-speaking lawyer Instruct an independent lawyer to represent your best interests and protect you from potential harm. Choose an English speaking lawyer who can explain the whole process to you. Before you have decided on a property in Spain it is important to be fully aware of the legal process and ALL the costs involved in your property purchase. When you make an offer and before signing any legally binding contracts you must get your lawyer to check two very important documents before proceeding further; the Escritura Publica for a detailed description of the property and of the owner, and the Nota Simple containing further details of any debts, including mortgages or legal claims that may exist against it. 5. Essential viewing tools Take the following essential items with you when visiting prospective properties:
6. Protect your self against LRAU or Valencian Land Grab Law Things are changing in respect of the 'Land Grab' situation in Spain, but until the law is change in the future there are things you should do to protect yourself from potential loss of money and land. Before making a commitment to buy a property in the Valencia region make sure your property lawyer investigates and confirms that the property has legal planning permission and also that he/she checks with the local town hall that it is not affected by new plans for an urbanisation. This should at least ensure that you don't get landed with a bill or lose some of your land in the short term, but you can also take out 'Title' insurance for further peace of mind. 7. Apply for your NIE/NIF early. Having successfully made an offer to buy a property you should now apply for an NIE/NIF certificate (foreigner's identity and fiscal number) as this will be required when completing in front of the Notary - in fact a fiscal number is required to enter into any contract in Spain, including utilities and buying a car for instance. You will need to apply for this in person so get your agent or lawyer to take you to the Oficina de Extranjeros (Foreigners´ Department) at the nearest Policía Nacional (National Police Headquarters). It takes anything from I to 4 weeks to process NIE applications and you should also pick the papers up in person when they are issued. Some areas of Spain will still permit your representative (lawyer/gestor) to pick the documents up if you can't be in Spain at the time the are made available, but check this point with your solicitor. To get started download and complete (in English) your application form now using the official online application form at http://dgei.mir.es/es/general/ex14.pdf. When the PDF document opens up click into each field and type your information, but you must print it out to sign it. Alternatively you can print the blank form and complete it by hand. For help in completing the form click here. 8. Have a survey done on resales When your lawyer is happy with the initial searches and the legal status of your chosen property is confirmed you should have an independent survey of the property. Despite being considered a critical aspect of buying in the UK , building surveys are often overlooked by purchasers in Spain! In the case of a resale property, the surveyor should be asked to carry out a full structural survey and report any structural weakness, defect or signs of subsidence. Often this can be combined with an independent valuation of the property to ensure that it is not excessively over priced. Costs vary for independent surveys according to size and number of buildings on the property, however for between 800 - 1200 Euros you will find out exactly what it is you are buying and avoid disappointment later on. 9. Check builders insurance guarantee to protect your stage payments When you buy a new property that is being built by a developer, the property will not become yours until it is completed and the necessary certificates issued; in the meantime, you will make advance stage payments to the builder, which should be protected by a bank guarantee or insurance policy to ensure your money is safe should the builder go bust. Whilst it is a legal requirement for builders to have advance payment guarantees in place, whereby any money you'd paid during construction would be returned plus 6% interest, some developers chose not provide guarantees unless specifically asked and pushed by their purchasers. Some even ask the purchaser to pay the setting up fees, which again is against the law Check and proceed accordingly through your lawyer who should establish the situation on your behalf and never take what you are told at point of sale on face value, always check through your lawyer. 10. Do not 'under-declare' the value of the property You will hear the term often 'it is common practise in Spain' and normally that means its not actually legal, but everyone turns a blind eye to it. If anyone asks you to under-declare the price of a property say no. The seller is asking you to pay the full price, but declare to the government, on the public deed, a lower price to avoid paying full capital gains tax. This is fraud and therefore illegal and all you are doing by agreeing is storing up a greater tax bill yourself when you come to sell. The government may also re-value the property at anytime and ask you to pay additional tax plus an interest penalty. |