Purchasing property in Spain has proved an excellent investment for thousands of people. Prices in some areas have risen by up to 30% in the last 12 months and have doubled in the last 3 years. Demand for property in Spain remains high and prices are still steadily rising, so if you have your finances in place and are ready to purchase abroad, why wait for prices to increase further.

Buying a property in another country may seem very daunting yet the Spanish system is very straightforward indeed and in some ways safer than in many countries, including the UK. Gazumping is illegal in Spain and the system ensures you cannot be gazumped.

Title deeds for all new-build property are 100% guaranteed freehold and free of debt, this includes apartments.

All new-build property has to have a full 10 year structural guarantee by law. Spanish property today is of high quality construction using up to the minute materials, modern techniques and superb finishes. By law all property built after the year 2000 has to have this guarantee, so bear this in mind if buying an older resale property. With ever improving technology in the building industry in Spain, new build construction is generally of a higher standard than older homes. New properties normally require less maintenance whereas depending upon the age of the property a resale may need some refurbishing. We can help you to decide between both new build and resale by showing you a selection of both during your inspection visit.

All Spanish property is purchased in Euro.

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A new property will be either already under construction or waiting to be built, this is known as “off plan”. We also have some "key in hand" new property ready to move into.

The following is a guide to the procedure once you have found a suitable property:

A legally binding contract is drawn up, in English.

A £2,000 Sterling or €3,000 deposit/reservation fee is paid.

The price is fixed by this contract and cannot be increased.

The property is taken off the market and cannot legally be sold to anyone else.

Within 30 to 40 days, normally a further payment of between 30% and 50% will become due, less the reservation fee already paid. Most builders’ contracts ask for 50% at this stage, a few developments accept a 25% deposit plus a further 15% when foundations are laid. Some builders accept 30% to 40% if the property is to have a mortgage on completion.

Once the property is built and ready for occupation the formal completion and legal aspects take place. It is now that you will be required to arrange payment of the final balance be it 50%, 60% or 70% by cash, or mortgage as appropriate.

At completion you will also be required to pay the 7% IVA/VAT tax, Stamp Duty, Land Registry, Solicitor and Notary fees as well as the cost of your water and electricity contracts. You should allow an additional 10% of the purchase price of the property to cover these additional closing costs.

At completion it will be necessary for you to return to Spain for at least a few days to finalise everything and attend at the notary’s office to sign the Escritura which is your title deed. As part of our extensive after care service and to ensure your peace of mind, you will have an experienced member of staff taking care of you, accompanying you to solicitors etc. and guiding you through the entire procedure, and at no cost to yourself.

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Resale property is normally ready to move into. It may be brand new, a few months or a few years old. We also have the older type o village or country houses. Many resale homes are sold furnished.

The most important point to note about purchasing a resale property is that, unlike the often long drawn out process here in the UK, in Spain it can be a very rapid process indeed. Completions have been known to take place in just 10 days and rarely will the process exceed 10 weeks.

With a resale purchase it is important to ensure finances, especially any mortgage arrangements are taken care of and put in place as early as possible.

The following is a guide to the procedure once you have found a suitable property:

A legally binding contract is drawn up, in English.

A £2,000 sterling or €3,000 deposit/reservation fee is paid.

The price is fixed by this contract and cannot be increased.

The property is taken off the market and cannot legally be sold to anyone else.

Within 7 to 14 days, normally a further payment of 10% or 20% will become due, less the reservation fee already paid.

At completion you will be required to arrange payment of the final balance be it 80% or 90%.

At completion you will also be required to pay the 7% IVA/VAT tax, Stamp Duty, Land Registry, Solicitor and Notary fees. You should allow an additional 10% of the purchase price of the property to cover these additional closing costs.

At completion it will be necessary for you to return to Spain for a few days to finalise everything and attend at the notary’s office to sign the Escritura which is your title deed. To ensure your peace of mind, you will have an experienced member of staff taking care of you, accompanying you to solicitors etc. and guiding you through the entire procedure, at no cost to yourself this is all part of the service we provide.

Resale homes are not necessarily cheaper than new build, sometimes they can be more expensive because the present owner may have made improvements such as fitting air-conditioning, landscaping the garden or adding a private pool. Sometimes, resale homes may require additional expenditure to update areas such as kitchens or bathrooms.

If your reason for purchasing a resale is because you are unable to wait for a new property to be built we can show you new property nearing completion or even ready to move into as well as some "key in hand" property when available.

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Build times for new property vary, property can be purchased already under construction with just a few months to completion, or it may be an “off plan” development with 12-18 months waiting time.

Most new build property is completed on time or even ahead of schedule. However, delays do occur, so we always advise clients to allow an additional month or two on top of any completion date they are quoted.

New build property is especially well suited to clients who may only have minimum funding of 30% to 50% currently in place but who will have the completion funds available at a later date, for example a mortgage arrangement on completion or the proceeds of the sale of a UK home in the coming months. The completion times for resale properties are always much quicker, between 2 to 10 weeks so it is essential to have all 100% funding arranged as soon as possible, including any mortgage arrangements. Whatever your circumstances we are certain to have an excellent choice of property to suit your finances and time scales.

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We will introduce you to English speaking solicitors on your inspection visit should you find a suitable property to purchase or, if you wish, you can select your own solicitor. We can also introduce you to a UK based solicitor who will deal with everything if you prefer.

Your appointed solicitor will deal with the matters of conveyance, give you legal guidance and most importantly handle the security of your payments.

All property transfers in Spain require the services of a Notary whose role is to legally witness the signatures on your title deeds or the Escritura as it is known in Spain.

You will also need to make a Spanish Will to ensure your assets in Spain are dealt with according to you wishes, your Spanish solicitor will arrange this for you and advise you accordingly.

An additional service often provided by your solicitor for a small annual fee is that of Fiscal Representative or Gestor. As a non resident in Spain you need to be aware of certain taxes due each year as a property owner. These are fairly small amounts but it is advisable to have a Gestor to complete the forms for you and handle the payment on your behalf.

LRAU – The Valencia “Land Grab” Situation

Of great concern to many clients is the worry of getting caught up in this devastating situation. Firstly buyers should realise that only a very small minority of people are being affected and secondly that this dreadful law only affects certain kinds of land. The media have done an excellent job in alerting potential buyers to the situation, but they have unfortunately also caused great confusion by not actually advising clients how they can so easily avoid getting caught up in this problem.

The LRAU classifies 3 types of land and it is this classification of the land which is so important:

	Developed – urbanised land where developments are completed or nearing completion
	Land for development - in the process of being urbanised where all the approvals are in place and the development and its entire infrastructure has already been decided upon and plans established.
	Rural or Rustic – land without an approved development or urbanisation programme.

At least 90% of buyers purchase property on land from the first 2 categories, and those buyers can be completely reassured they will not be affected in any way. If the property you intend to purchase is on land already designated as Urban the local authorities cannot change this in the future.

On the other hand buyers who intend to purchase on land from the last category, where no approved development programme is in place, absolutely MUST carry have the necessary surveys and investigations carried out by their solicitor to find out if they could be at any possibility of risk either now or in the future. Searches can be done at the local town halls to establish this.

If you still have concerns regarding the LRAU, or are considering purchasing a finca or country property, please contact us, we have information from both UK & Spanish solicitors we shall be happy to forward to you.

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It is important to ensure you have your finances either in place, or agreed in principle, before traveling to Spain on an inspection trip. We have independent financial advisors both in the UK and Spain who can advise and assist our clients on the best options.

Finance Options:

Cash from savings etc.
Cash from sale of a UK property.
Cash from a re-mortgage or equity release on a UK property.
Part cash between 30% and 50% with the balance by mortgage on the Spanish property.

Mortgage options:

Equity release and re-mortgage of a UK property.
A Spanish Euro mortgage.
An offshore Euro or Sterling mortgage.

The maximum loan for a Spanish or offshore mortgage is normally 60% or 70%. Remember whatever financing option you decide upon you will also need to allow additional funding for the taxes and completion costs of approximately 10%. (80% mortgages can be arranged in certain circumstances. Please contact us for more information.)

Obtaining a Spanish mortgage for a non-resident is relatively simply and the rates are usually lower than the UK, these are normally on a repayment basis with terms of 5 to 15 years. Spanish Mortgages can be easily arranged during you inspection visit if required, you will need the following documentation:

Employed status:	Passport
	Copy of last P60
	3 months salary slips
	3 months bank statements
Self-employed status:	Passport
	Statements of accounts for last 3 years

Spanish banks will also require you to have an initial deposit in cash of at least 30% of the property value before granting the mortgage. Spanish mortgages usually incur additional setting up costs.

If you need assistance with a Spanish mortgage please advise us prior to your trip and we will ensure that our financial department in Spain are available for you during your visit. A rough guide for the cost of a Spanish mortgage is that for each £1,000 borrowed you will pay around £7 per month, so a £50,000 mortgage will cost approximately £350 per month, of course this will also depend upon the Euro exchange rate.

Click here for more information on Euro and exchanging money.

Contact us for more information and advice on mortgages from an Independent Financial Adviser, or telephone our recommended IFA, Paul Bamsey of Redwood Consultancy (UK) Limited on 01273 833083

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During your inspection visit we will assist you to open a Spanish bank account, either at a bank of your choice or we can recommend one. All you need to open an account is your passport.

Many Spanish banks have internet access with the ability to view in English, so it is an easy matter to monitor your account from the UK, bank statements can be posted to your UK address if required.

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All Spanish property is purchased in euro and prices are normally quoted in euro. It is important to remember that wherever prices are quoted in sterling this can only ever be taken as a guide. It is a good idea to get used to using the euro especially as everything will be in this currency once you are in Spain.

You will notice that some companies quote their prices in sterling, this can be quite misleading because the real cost to you in sterling could be very different indeed. The final cost of your purchase will vary according to the exchange rate applicable at the time you purchase your euro currency.

Our exchange rate calculator will act as a guide.

The rate of exchange between sterling and euro can make a huge difference to the final amount you eventually pay for your new home, so it is very important to be aware of how this can affect you. Not only can the rates move around over a period of just a few weeks think what can happen over a period of months while you wait for a property to be built. So what is the solution and what can be done to protect you from exchange rate fluctuations?

The Currency Exchange Solution

For your peace of mind, help is at hand. We recommend the following corporate currency brokers who offer specialist services for overseas property purchasers:

HIFX - Halewood International Foreign Exchange
GCEN - Global Currency Exchange Network

Once registered with HIFX you are able you to purchase euro (or any other) currency at very competitive and far better rates than your bank will give you. After all when you are purchasing several thousand pounds worth of euro you should expect a commercial rate and not a tourist rate!

You have a number of options available to you when using HIFX, including a forward purchase scheme which can guarantee rates for up to two years. Registration is completely free and very simple, there is never any commission to pay and they also include one free telegraphic transfer per transaction.

Do not imagine they will only be interested in large corporate transactions, HIFX help thousands of people to purchase their home overseas every year and in doing so save them thousands of pounds in the process. They also explain everything to you in a very straightforward way.

Remember what seems like just a very small difference on the exchange rate can make a huge difference to the final cost of your home abroad.

Even if you are not ready to purchase just yet please feel free to contact us for more details and we will arrange for a HIFX information pack to be sent directly to you.

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A great number of resale properties are sold either fully, or partly, furnished. Even though the contents may not always be quite to your taste, this can be a great saving in both time and money, especially when you first take over your property.

Some new build properties are sold with basic furniture packs included.

There are many wonderful furniture shops offering an amazing choice and with prices to suit all budgets in all areas of Spain. You can usually furnish an average 2 bedroom home for around £2,500 to £3,000, including the kitchen appliances. Service and delivery is excellent and fitting is often included.

You should not need the expense of carpets as all the floors will be ceramic or marble. Most new properties have fitted wardrobes in the bedrooms. Apart from specialist furniture shops, some of the large supermarkets have excellent value electrical good such as fridges, cookers, washing machines and dishwashers as well as all the smaller appliances. Supermarkets are also a good place to source linen, crockery and other utensils.

One item often overlooked in the furnishing budget are the lamps and light fittings. Unlike the UK where we mostly use an easy fit lampshade many Spanish homes use either wall or ceiling light fittings. For this reason most new build property usually has nothing more than a couple of wires left for you to fit your own choice of light. Spanish lighting shops have a wonderful choice of lights and lamps and they will normally deliver and fit them for you.

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Running costs for a property in Spain are much less than the UK. The following example is just a general guide for property on the Costa Blanca. Actual costs will vary according to the size and type of property and also the location.

Your regular payments, bi-monthly or quarterly, for water and electric will be paid by direct debit from your Spanish bank account. Most other costs shown are annually paid and these can also be set up for automatic payment from your bank.

If purchasing a new property you may initially be on builders supply until you have a contract with each of the various companies, our staff in Spain will assist you with this as part of the after care service when you are ready to move into your new home.

Community fees are payable to the “Community of Owners” on your urbanisation or complex. These ensure that all the communal services such as the swimming pool, gardens and upkeep of the areas you share with other residents are kept clean and well maintained. The majority of properties will have some form of community fees. Some individual villas may be the exception to this.

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