Property in Spain – procedure, questions and answers
We offer consultation with an independent Property Advisor before the purchase, as well as comprehensive service of processes on the property market in Spain.
We make sure that you know what you are buying, what you will receive and how much you will pay. We operate independently of the Real Estate Agency, we check the value of real estate on the market without any obligations.
✓We help you make the right decisions for your peace of mind. We can advise, but also advise against.
✓We safely carry out a number of formalities and activities during sales transactions.
✓We help foreigners in completing the purchase of properties in accordance with Spanish regulations.
✓If you are going to buy a property, contact us, we will help you make the best choice and we will take care of the safety of your dreams.
Our activity in the property market:
- negotiation of a preliminary contract,
- handling the procedure for purchasing and selling property,
- sales service with rental option,
- issues related to property financing (negotiation of loan agreements, loans and guarantees);
Comprehensive purchase service is provided by the Property Advisor in close cooperation with our lawyers specializing in property management law.
Advisory and legal activities when purchasing property:
- property valuation based on which we negotiate the real estate price for the client,
- checking the technical condition of the property,
- getting a number N.I.E.,
- opening a bank account in a Spanish bank (payment for the property takes place in the form of a bank check when signing a notarial deed),
- analysis and negotiation of a preliminary contract,
- verification of the legal status of property,
- property purchase contract with simultaneous translation during the purchase,
- post-purchase activities such as payment of taxes and entry in the property register, as well as change of entity on service contracts
Property purchase
Pursuant to the Spanish provisions of civil law, a contract concluded without observing the form of a notarial deed is valid and has all legal effects. Therefore, it should be borne in mind that the so-called the preliminary contract is already a purchase contract, which means that the conditions contained therein are binding on the parties. This is a mistake often made by Poles who buy real estate in Spain, who are surprised by the inability to withdraw from the contract signed in the usual form without any consequences. Therefore, both the contract concluded in the ordinary form and the notarial contract should be subject to legal analysis.
In addition, Spanish law precisely defines the titles of purchase costs on the part of the Buyer and the Seller, often when the buyer is a Foreigner, developers use the practice of transferring most of the costs related to the transaction in the preliminary contract, which is binding and a notarial deed of purchase is prepared on its basis.
The purchase of real estate from the primary market should be verified in terms of the occupancy permit – a document in which the city office certifies that the property is suitable for living, and which will be the basis for obtaining electricity and water connections.
Purchase of plots of land, it is very important to analyze an excerpt from the cadastre and the spatial development plan, which provides information about the class of land and the subsequent possibility of obtaining a building permit.
Moreover, each purchase of real estate should be verified in terms of arrears with payments to the city office or taxes in order to eliminate the possibility of purchasing an indebted property.
Another very important issue is the analysis of the statute of the housing community, which determines the rules of using the common parts of the property, but also the aesthetics of the entire building, behavior on balconies and terraces, etc.
Advisory and legal activities when purchasing property:
- entry of the ownership contract of sale (notarial deed) in the property register,
- notification of the City Hall appropriate for the location of the property,
- Opening contracts with media service providers, connecting utilities,
- payment of the relevant purchase taxes to the Spanish Tax Office,
- when buying a property, depending on whether the property comes from the primary or secondary market, the buyer is obliged
pay the appropriate tax within 30 days from the date of purchase:
tax on civil law transactions in the amount of 10% (for property from the secondary market),
tax on notarial deeds in the amount of 1.5% (for property from the primary market),
VAT added to the net price of the real estate is transferred to the state treasury by the developer..
Our Adviser will give a non-binding evaluation of the selected property on the Spanish market and verify the legal status of the property (encumbrances, owners), which is very important before the purchase..
WHY SPAIN ?
Spain is the 2nd most visited country in the world. Tourists not only visit popular cities such as Madrid or Barcelona but most of all the sunny southern coasts of Spain. The most popular of them are Costa Brava, Costa Blanca and Costa del Sol. We work all over Spain, but our specialty is the Costa Blanca region. The wonderful coasts on the Mediterranean Sea, a mild and healthy climate and clean sandy beaches attract not only tourists but investors or foreigners who lead their second home in this sunny country.
WHY COSTA BLANCA?
Costa Blanca (White Coast) is less known among tourists, but is very popular among investors and foreigners settling here permanently. All thanks to attractive property prices on this beautiful coast belonging to the Valencia region with the province of Alicante. Convenient access from the airport in Alicante and Murcia is an additional advantage. Very mild winters (in relation to the Costa Brava) and the lowest annual rainfall (in contrast to the Costa del Sol) make the white coast another advantage. It is important for investors because it guarantees that the property can enjoy holiday rental all year round. The White Coast owes its name to its white, sandy beaches, blooming almond flowers and picturesque, whitewashed houses. Costa Blanca is not only the wonderful waters of the Mediterranean Sea, but also mountain ranges and salt lakes. This region is famous for its healing microclimate and spas.
WHY PROPERTIES IN SPAIN?
Spain has always been an attractive country for foreign investors – wealthy Scandinavians, French, Germans, Dutch and English have had at least one property in Spain for years. Poland’s accession to the European Union and the years of the global crisis, which significantly lowered the prices of seaside property on the secondary market, also enabled Poles to purchase property in Spain. Spain is a safe country, with a uniform legal and tax policy within the EU, located only 3-4 hours by plane with a guarantee of sunny weather. These are other advantages for which Poles choose Spain for themselves for holidays or for property investments. All this means that not only celebrities, wealthy entrepreneurs but the middle class invest in Spain. Real estate in Spain is not only the secondary market, but also a thriving construction industry and a wide range of modern apartments and villas on the primary market.
HOW TO BUY A PROPERTY IN SPAIN?
The purchase of property in Spain does not differ from the provisions and standards of Polish procedures of conduct when purchasing property. EU citizens can buy a property in Spain on the same terms as in Spain.
When choosing a property, local conditions and the specificity of the market should be taken into account. The main thing is to think about it and determine the exact purpose of the purchase. Some are looking for real estate away from tourists, in a local town, others are as close to the sea as possible in a large urban agglomeration or resort. Therefore, the most important thing is our goal whether we want real estate exclusively for ourselves or for investment, we often manage to combine both of these goals. Then, when buying, you have to take into account the aspects significant when renting and follow them. All legal aspects of the acquisition of property in Spain by Polish citizens, published on the website of the Polish Embassy in Madrid.
PROPERTY PURCHASE COSTS
Property prices in Spain depend on the secondary or primary purchase market. The size of the apartment or the condition of the building, not the same as the location to the sea or the beach, plays a huge role in the price of the property. The prices of real estate next to the sea in Torrevieja for an apartment with second-hand bedrooms start at 60,000 euros, for comparison, in a seaside town, an apartment on the development market can be purchased for 150,000 euros. Regardless of whether you are buying a new or second-hand apartment, you should add about 12 – 13% to the purchase costs when buying from your own funds. About 15% for a bank-financed purchase. Included in this 10% IVA (VAT) of the purchase tax, notary fees, fiscal fees resulting from the procedure of buying property in Spain.
DOCUMENTS FOR THE PURCHASE
To purchase the property, you must have an identity document and a copy of it (passport, ID card), an account in a Spanish bank, and N.I.E. the number of the Spanish tax identification of foreigners – Numero de Identificacion de Estranjero. Required to conclude physical and legal transactions in Spain by foreigners. You can get it on the spot or at the Spanish Embassy in Warsaw. If we use bank financing, you must provide a 3-month bank statement, Credit report, the last 2 annual tax settlement. Our Advisor helps to obtain all documents and oversees the entire purchase procedure. The selected property is reserved by signing the preliminary contract and making the reservation payment. Usually it is an amount of 3-6 thousand euro and during this time the Adviser sets a date at the notary’s office convenient for the client, and works with a lawyer to collect complete documentation from both parties to the transaction and to ensure every detail.
RETURN ON INVESTMENT?
If the apartment is to be not only a pleasure for us, but a profitable investment. It is sooner or later that we calculate the annual ROI (Return on Investment) rate. It should be taken into account here for what part of the year we assume the rental and how much for private / family use; whether we finance the property ourselves, to what extent is the bank financed (loan costs, interest). We can consider several investment options, buy a property for continuous short-term rent, subsequent profitable sale, long-term capital investment, purchase for a place to live in retirement. Our clients receive 7 to 12% annual return on short-term rental.
THE COST OF RENTING
Short-term rental costs, i.e. the cost of maintaining the property, fixed fees, annual taxes, media costs and guest service, key holding, caring for the apartment and fees for managing our property, taking care of cleanliness, readiness to react in the event of unforeseen situations / failures. The rent from the property, i.e. comunidad, is only worthwhile if we live in a housing estate / urbanization with a common area, the swimming pool / green area (depending on the standard of our apartment) is from 30 to 100 euro per month. There are no such fees in independent houses or bungalows. Annual property tax. about 100-200 euro. Utility bills monthly electricity and water every 3 months. Internet about 30 euros. Cleaning around 50 euros. insurance costs about 100 euro
INVESTMENT MANAGEMENT
ssShort-term rental costs, i.e. the cost of maintaining the property, fixed fees, annual taxes, media costs and guest service, key holding, caring for the apartment and fees for managing our property, taking care of cleanliness, readiness to react in the event of unforeseen situations / failures. The rent from the property, i.e. comunidad, is only worthwhile if we live in a housing estate / urbanization with a common area, the swimming pool / green area (depending on the standard of our apartment) is from 30 to 100 euro per month. There are no such fees in independent houses or bungalows. Annual property tax. about 100-200 euro. Utility bills monthly electricity and water every 3 months. Internet about 30 euros. Cleaning around 50 euros. insurance costs about 100 euros