A relaxed lifestyle, warm weather and the potential of making a good rental income are just some of the reasons Britons choose to buy a property in Spain. But Spain's legal system differs significantly from that of the UK, and this, in conjunction with other potential problems with buying a property in Spain, means doing your research beforehand is essential.
Key tips for buying a property in Spain
Take your time to choose a property that either meets your domestic needs, or those of would-be tenants; these criteria may be different.
* Examine any potential property in detail. Look at installed equipment, quality of materials and the views. Visiting a property more than once is recommended, and at different times of the day to see what the light is like at different hours.
* Consider taking a professional such as a quantity surveyor or architect along with you to examine the property if there are any structural issues that concerned you on an initial visit.
* Understand the property's legal situation properly. Are there any mortgages or injunctions connected with the property? Are there tenants currently living there? Is it part of a social housing programme? In the case of low-income or price controlled housing, are there any restrictions on selling the house? If the building is still under construction, does the promoter have structural damage insurance? Check with the Registro de Propriedad (the Property Registry) to find this information out, or ask the estate agent to do it for you.
* An estate agent involved in the purchase process may offer additional services such as a mortgage finance plan, tax paperwork services or submission of the deed to the Property Registry. You are not obliged to accept these services, and may find lower cost alternatives.
* Aside from information from the Property Registry, get complementary documentation from the seller proving that all property taxes have been paid, that no money is owed to the building tenants' association (if applicable), and that there are no leases on the property. A copy of the seller's deed of purchase should also be provided.
* When you decide to buy a property with a mortgage loan you will need a notary – a person who bears witness to the signing of the document, the persons involved, and the date etc. If no mortgage loan is taken out, then a notary is not required. However, either party may request that a notary is present.
* The promoter, the builder and the chief engineer are liable for defects in construction (liability covering ten years), damage caused by defects that might make the property uninhabitable (liability covering three years) and defects in finishing (liability covering one year).
* You must pay certain taxes for a house purchase in Spain, which vary depending on if it's a brand new or second hand home.
* New buyers: You must pay VAT to the seller, and a tax to the applicable autonomous region's exchequer of between 0.3 and 2 per cent.
* Second hand buyers: No VAT is due, but a tax must be paid to the autonomous region's exchequer.
* The mortgage loan deed will be subject to stamp duties of between 0.5 and 1%.
* After signing the purchase agreement and paying the applicable taxes you must register your new property with the Property Register, so you are considered the rightful owner and so the mortgage (if applicable) can be processed.
* If you paid a security deposit before signing the agreement, you should subtract this from the final sum you pay. You will lose the deposit if you decide not to go through with the sale, while the 'seller' will have to pay back twice the amount if they drop out of the sale.
Do you need insurance for your holiday property in Spain?
Click4quote can provide insurance for holiday homes in Spain and other selected European countries. If you need a quote please contact us and we would be happy to speak with you.
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