- PSP Guide
EXPENSES WHEN BUYING A PROPERTY
Once you have found your perfect property and decided to proceed with the purchase, the buying process will begin. Before you sign anything or pay any deposit you should take advice from a legal adviser. You can use either a lawyer or an asesoria/gestor.
The asesoria/gestor or lawyer is your best friend and he/she will advise and assist you through every stage of the buying process by:
• Obtaining Power of Attorney on your behalf if you are not here for completion.
• Helping you to obtain an NIE number
• Verifying that the purchase contract is correct and covers your interests
• Carrying out the necessary searches
• Payment of deposits
• Preparing all necessary documentation for the visit to the Notary
• Accompanying you to the Notary for the signing of the title deed and translating documents for you
• Registering the new title deed
• Arranging for utilities to be transferred into your name
Once you have completed the purchase of your new home, he/she will then be available to help you with all your needs, whether it be:
• Help you make an annual tax declaration on your behalf
• Prepare your Spanish will
• Transfer car ownership and registration if needed
• Make an application for residency if you decide to live here permanently
• Help you obtain a certificate from the Valencian tourist board which authorises you to rent your property as a holiday let legally.
We can recommend lawyers and asesorias/gestors whose services we have used and whom we have found to be efficient, reliable and highly professional. None of these people are connected to our business in any way, so if you do not have your own legal adviser, then we can confidently recommend the services of these people.
Obtaining your N.I.E. Number (foreigner´s identification number)
In order to purchase a property in Spain, you need an N.I.E. number which is obtained from the local police station, "Comisaría de Policia". You will need this certificate prior to completion of your purchase, so please do leave enough time to obtain it (min 2 weeks and possibly longer during the summer months). Your asesoria/gestor can apply for this for you but you need to accompany him/her to the police station. You will need to take your passport and a copy of it. The N.I.E. number is a very important part of Spanish life and you will be asked for it time and time again.
Spanish Bank Account
You will need to open a bank account in Spain and you need both your passport and your N.I.E. number in order to do this. The money you need to complete the purchase will be deposited into this account and withdrawn in the form of a bank certified cheque – the normal method of exchanging money at the Notary's office. Your utility bills will also be paid by direct debit from this account. We work closely with a few Spanish banks and can assist you in opening a bank account and also applying for a mortgage.
Should you require a mortgage to complete on your purchase, the process is straightforward and similar to that in the UK. We can assist you with a mortgage in Spain as we have a great relationship with a few bank managers in some of the best known banks in Spain.
A mortgage can be arranged either in Spain or in the UK. Both Spanish and UK banks have the same requirements for lending money on a property in Spain and all require proof of income and regular outgoings. The level of mortgage offered is directly dependent on your financial status and also the declared value of the property you wish to purchase.
Spanish banks will generally lend 60% if you are a non resident in Spain and 70 to 80% of the value of the property if you are a resident. Banks will require the mortgage to be fully repaid by the age of 70 normally over a repayment period of 25 years but this is dependent on age. Before the bank can make a decision about your application, the property will have to be valued by the bank valuer (tasador). A reply to your mortgage application, after all documents required have been submitted, can normally take 5 to 7 days, depending on circumstances.
The cost of arranging a mortgage is likely to add about 1-2% to your overall buying costs. If the sellers of the property you are buying already have a mortgage on the house, then it is sometimes possible to transfer the existing mortgage from the seller to the buyer which might reduce the mortgage set up costs. Normally an early repayment,cancellation fee is set at 1%. The valuer cost varies between 350€ and 500€ and bank notary and registration fees can vary between 1,000€ and 1,200€.
In Spain the purchase contract is called the "Contrato de Compraventa". Usually the purchase contract will be prepared by your legal adviser and must be agreed by both the buyer and the seller. You can seek to include any clauses which you consider to be important or to safeguard your position. You should consider issues such as the results of searches, mortgage applications and any other agreements between the buyer and the seller.
A typical purchase contract will include:
• Description and address of the property
• Purchase price
• Amount of the deposit
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