Buying Property In Spain

Before we took the final decision to move we did some essential reading about property in Spain, Buying a House in Spain 2009

After going out to Spain on a couple of inspection tours we eventually decided to buy property somewhere in the Benimar / Benijofar / Rojales area on Spain`s Costa Blanca.

We chose a new build, a model called the Jazmin, which was promised to be ready in 12-13 months but took 17 months. In Spain this is quite good, because 12 months usually turns into 36 months.

A non-refundable deposit is always required, which is about 3000 euros. This has to be paid in euros, so a Spanish bank account is required. This can be opened with as little as 10 centimes. I will speak about the Spanish banking system later.

Due to the promise of a 12-13 months build we, in due course, sold our bungalow and gave notice in on our jobs, deciding that we would rent an apartment and familiarise ourselves with the Spanish way of life prior to moving into the new villa. Of course everybody knows that Spain is warm in winter, only, it`s not! We rented an apartment that was designed for summer and we suffered in the winter, having to borrow heaters etc.

Prior to moving into your new villa a snag list is created, which in theory has to be agreed between you and the builder and sorted out within 30 days of you moving in. In practice, you end up doing the minor problems yourself and getting another builder in to sort out the larger problems. The reason is, if you take the builder to court, it can take up to 3 years to hear the case and the Judge inevitably is sympathetic towards the builder, and if you win the case the builder either changes his name or waits until you take him back to court which again can take 3 years.

You are now in your villa and are on your builders` water and electric, which means that you have to pay for it to the builder but he controls it and can turn it off or on whenever he wants. And if he doesn`t pay, the water or electricity company will turn it off.

                                                             

        Our Jazmin-style villa                                                                     Conchita-style villa

Solicitors In Spain

When selecting a solicitor to represent you on the purchase of a property in Spain be careful about taking on a recommendation from the builder. The builder may offer special incentives to use somebody he knows, like a discount on the charges, or it can go through quicker etc.

Solicitors like a retaining fee of approximately 150 euros per annum and about 500 euros for the handling of a purchase or sale of a property. They also handle other jobs such as getting an NIC number (similar to our National Insurance number). The fee for this is approximately 100 euros. You need this number to buy a car, and property. Your solicitor can also get you a Residencia, but the necessity for this (benefits) are not as great now. In the past you paid a lower tax on the sale of property and got a higher interest rate at Banks. The solicitor will set the level declared as the purchase price of your villa as extras are not vatable. The amount declared is currently vat rated at 7% . On the selling of your property the taxation is based on the profit made between the buying and selling price, if you are moving back to the UK. If you sell and buy in Spain then there is no taxation.

Council Tax

Local Municipal Authorities set their equivalent of the UK`s council tax. 

There is a council tax which comes into effect with new property when the builder hands over the responsibility to the council. Prior to this a minimal charge of roughly 100 euros per year is made and when the council takes full charge then they ask for approx 250 euros per year. There is a collecting agency for the council tax and you can go into their office and pay it, or pay it through the bank. You are reminded of this, well in advance.

One thing to note with the council is that they are not responsible for anyone hurting themselves (by falling) outside your property. To cover yourself you need to take out an insurance which is normally part of your fees when a community is formed. I will not go into this too much, but a community is a legal requirement and presidents, vice presidents etc are required to be elected to sort out pool maintenance fees, who can and cannot build in that area (extensions etc) this fee is roughly 1000 euros per year.

Property and Wills

One important point for expats now living in Spain. Don`t assume that your will which you made in the UK is good for Spain. Laws vary from one country to the next, and it`s vital that your money and property go to whom you intend it to go upon your death.

This is why you should seek legal advice in Spain so that you save any unnecessary expensive legal procedures due to wrangles because your will isn`t accepted under Spanish law, or more likely has loopholes. All expats should ensure they have a will, and secondly update it from time to time to take account of additional assets owned.

 

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