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Thinking of buying in Spain?

We’ve collated some of the common questions put to Spanish Lawyers Jorge Iguacel

How long does the typical buying process take for a property in Spain from the point at which a suitable property has been identified.

It really depends on the type of property that you are buying. A straight forward transaction can expect to complete in just over a month.

What are the typical buying costs including search fees, taxes and other expenses?

You must be aware of the disbursements and expenses in buying a property in Spain. Unlike in England, the disbursements can and will vary from area to area. To begin with, searches have to be undertaken to ensure that the property is legal. The cost of this can be between 35-300 Euros. There are additional taxes depending on the County in which the property is located – the transfer tax can vary from 7-10% in previously-owned properties.

There will also be additional expenses such as Notary fees and Land Registry fees but these very much depend on the price of the property being conveyed.

In relation to the purchase of new-build properties, there is a 10% VAT charge together with either a 1% or 2% Stamp Duty Charge, again depending on the area.

Legal expenses for the solicitors would be in the region of 1% of the purchase price together with the fees and expenses mentioned separately above.

What are the typical selling costs including search fees, taxes and other expenses?

In addition to legal fees (again, approximately 1% of the selling price), a capital gains tax of 21% on any taxable gain is payable together with a Plusvalia tax which is a local (municipal) tax charged by the local authority on properties when they are sold. It is calculated by reference to the rateable value and the number of years since the property last changed hands. Some local authorities are more expensive than others and some do not charge at all.

Are mortgages readily available for second homes in Spain through Spanish Banks? Are they also available through English Banks?

Yes, through both usually depending on status and the area and value of the property. It is usual that non-residents can borrow no more than 60% Loan to Value.

Can you help with the mortgage application process?

Usually, no. We can suggest appropriate points of contact but it is the client’s responsibility to put into place funding for their purchase. We can always recommend banks who have an appetite for lending on Spanish property.

Is a Will mandatory if you own a property in Spain?

This very much depends on other assets and personal circumstances but an English Will can usually cover assets in Spain. A Will is always advisable nevertheless and it’s always better to be safe than sorry.

Does property pass automatically to a spouse or children?

Not automatically. Probate has to be dealt with officially and taxes have to be lodged with the authorities and in some cases, there are inheritance taxes payable. Again, the level of taxation very much depends on the area or region in which the assets are located.

What are the main differences between a conveyancing transaction in Spain and England?

The process is very different. To start with, there are no “chains” as there are in England. The process is much more involved and I would say more personal. A typical “completion” can involve up to four people, the buyer, the seller, a representative from the bank that is discharging its mortgage over the property and a representative from the bank who are lending money for the new purchase. There isn’t always the “exchange” and “completion” sequence as there is in England often transactions proceed straight to completion.

Can Jorge Iguacel Spanish Lawyers help with all property and probate related matters in Spain?

Yes, of course. We are always happy to advise on the property buying and selling process and all probate and private client related issues. Our whole purpose is to assist clients based in England and particular- ly in Essex on issues relating to Spanish Law. We oversee the entire process ensuring that there is transparency and clarity and that clients feel reassured throughout the process.


 

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