| The most common questions we get asked about buying a
property in Spain are related to the legal and financial aspects of
ownership. It wouldn't be natural if a person were not a little cautious
about embarking upon something that is unknown and might contain hidden
pitfalls.
Buying a property in Spain is in reality in many ways a lot easier
than it is in the UK. The Spanish system is set up to protect both
the buyer and seller, providing certain simple steps are taken. We
would however stress that this guide is intended only to help understanding
of the processes involved and is no substitute for proper professional
legal advice.
English law does not apply in Spain, which makes the Spanish legal
system very different from the UK system. We strongly advise people
purchasing property in Spain to get legal advice about the property
purchase or the signing of legal documents because if they don't,
they could find themselves taking unnecessary risks. |
| Do I need a Spanish Solicitor? |
Yes your legal representative, solicitor
will discuss the many Ways of buying a property and advise of the most
advantageous
method
that suits your circumstances. He will also make all the necessary
investigations on the property to be purchased (i.e. re-sale). Once
he is satisfied that everything is in order, including finance, it
is necessary for the Ecsritura (title deed) to be signed before a Notary.
You will be advised by your solicitor when this is ready to be carried
out. |
| The Ecsritura |
The Ecsritura is the title deed containing a detailed description
of the property and proof of ownership. If the property is a re-sale
property then the Ecsritura will also contain the property's recent
history and previous details of ownership. |
| The Notary |
The Notary is a public official who places on public record, through
the title deed, the sale and ownership of a property. It must be signed
in his presence and must be understood by both parties. When the Ecsritura
is signed in front of the Notary the financial transactions are witnessed
and proof of such payments are incorporated into the title deeds of
the property. |
| Power of Attorney |
The buyer usually attends the meeting with the Notary in person to complete the
transaction, but if this is not possible, arrangements can be made for a power
of attorney to be granted. It is usually the Solicitor who is given power of
attorney to attend on behalf of the purchaser or vendor. |
| The Land Registry System in Spain |
After the Ecsritura (title deed) has been signed
it will be sent to the local land registry office. It will be entered
onto the register
and the Land registry fees will be paid. Your solicitor will make payment
of the fees and when the completed deeds are ready he will arrange
to have them sent on to you. |
| A Spanish Will |
Once you own a property in Spain, it is essential that you make a
Spanish Will if you wish the Property to be handed down to your family.
Remember English
Law has no relevance in Spain. The cost is very small and it is worth considering
giving a member of your family an enduring power of Attorney. This enables
your representative to continue dealing with your affairs should you become
incapacitated. |
| Spanish Bank Account |
As part of our on going service we will introduce you to a bank once
you have signed your Purchase contract. You will be required to transfer
monies from
the UK into your Spanish account in order to complete the purchase. This can
be done in our offices in Spain or in the UK before clients depart for a buyer's
inspection visit. You need to provide two forms of identification (passport
or a driving licence with photograph will be sufficient) and in the first instance
you are not required to place any monies into the account. However, it is highly
recommended that you allow at least five working days for all money transfers
to reach your Spanish bank account, as delays do occur within the Spanish banking
system. If payments are late getting to Spain, this can cause problems with
the completion of your purchase. |
| Applying for a Mortgage in Spain |
When applying for a mortgage, the bank will normally ask to see proof
of income (for an employed person) - two P60's, six months salary slips
and two months
bank statements. Income may be measured on joint income for married couples,
so ensure that you also have details of your spouse's income if he/she is working.
Proof of identity will also be required (passport or driving licence). If you
are self-employed then the bank will normally accept two years audited accounts
as proof of income plus your last tax statement. Through our special relationship
with most Spanish banks, our clients may be able to apply for a mortgage up
to 50-60% of the properties valuation, subject to status. Generally the upper
age limit is 75 years of age and repayment periods are usually between 5-20
years. |
| Investment Potential |
As an investor you have two main options: Buy to sell and buy to
let.
Many investors are already enjoying healthy returns on their investment
through buy to sell, as this involves buying property from a development
plan during
the construction phase. The increase in value is based on the demand for new
properties. There has never been a better time to invest in Spanish property
due to the strength of sterling and the overall higher standard of living. Returns
in excess of approximately 15-2O% have been achieved through this option but
please be aware that buy to sell investment returns cannot always be guaranteed.
On the other hand good returns can also be obtained with the buy to let option
due to the Costa Blanca being one of the most popular holiday destinations in
Europe. It would be a good investment plan to let your property while you are
not using it. This can be done privately or through a letting agency in the area.
Further information and rental income projections can be obtained from any member
of our advisory staff. |
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