Information about how to buy a property in spain: frequently asked questions

Spain is a developed country with extensive legislation for consumer protection. Especially with regards to real estate, there is good legislation that protects the buyer. This offers the buyer the right on a guarantee for new-build properties and safety with regards to amounts paid as payment terms for newbuilds. When purchasing a new building, it is legally required to receive a bank guarantee (or guarantee insurance) for paid installments. If you take the steps recommended together with Rayos de Sol, the purchase of a property in Spain is safe. We always recommend an independent legal adviser who will check all the documents and request the required documentation from the selling party. We already guided many clients, so you don't have to worry about anything.

In your budget you must take into account the "buyer costs". These costs amount to approximately 11-14% of the purchase price. This includes the VAT (new construction) or transfer tax (existing construction), costs of the notary, the land register and the lawyer. We recommend that you take into account 14% of the purchase price as additional costs. The largest part of this consists of 8% or 10% transfer tax (existing construction) or 10% VAT (new construction). In case you need a mortgage, costs for taking out a mortgage will also be charged (in addition to the normal additional costs).

Yes, you can take out a mortgage on your property in Spain. Banks have become stricter in recent years, but depending on your financial position, it is possible to get a mortgage. Usually a maximum of 70% mortgage is given on the appraisal value or purchase price of the home (lowest of these two values). We can of course advise you on this and introduce you to our mortgage adviser.

Annual property tax: IBI (Impuesto Sobre Bienes Inmuebles), this municipal tax is a percentage of the cadastral value which differs per municipality. This is a local property tax, regardless of who owns it. Wealth and income tax: owners of a house in Spain have to submit an annual income tax return: Impuesto sobre la Renta de las Personas Físicas. Our tax advisor can take care of this for you. Community of co-owners: If your property is part of a complex / community or building with communal zones, the owner is required by law to become a member of the community of co-owners. The annual maintenance budget of the community is approved in a general meeting of the community of owners. Every owner pays a certain amount. The amount depends on the number of owners and on the facilities in the community such as swimming pool, lifts or SPA. Utilities: electricity, water, possibly gas Municipal costs such as the collection of household waste (basura) Home insurance and household insurance Telephone, television & internet use

When purchasing a property in Spain, it is not mandatory to hire the services of a lawyer or legal adviser. It is however highly recommended. In your home country you may have very different legislation regarding the purchase of a home. Before a house in the UK can pass definitively at the notary, this notary first conducts an investigation to ensure that everything is legally correct with the house. In Spain this is not done by the notary, but by a lawyer / adviser who will assist you. This includes legal and tax advice, and helping you make the right financial decisions. Prior to this investigation, he asks the seller for a copy of the proof of ownership, an "escritura de compraventa". It contains the name of the owner, the official address and the cadastral data of the property. The lawyer (or another legal adviser) can then assist you with a number of matters. Consider the assessment of the contract, is the seller indeed the rightful owner, are there debts on the land and buildings and is the property entirely legal? He can also verify whether, for example, a building permit is granted and whether or not it will be expropriated. In addition, the lawyer can advise on future inheritances or gifts, property taxes, etc.

Of course, when purchasing a property abroad, you should also look at the tax consequences. This applies not only to your tax position in your home country, but also to those abroad. Because in the country of purchase you also have to take into account certain tax payments for the purchase, renovation, ownership, rental and subsequent sale of the property. After all, the property is taxed in the country where it is located. The tax adviser can give you more information about this.

The NIE stands for Número de Identidad de Extranjeros, or Identification number for foreigners, and is issued by the Ministry of Internal Affairs through the Immigration Service of the Policía Nacional. A NIE is required to purchase a property in Spain. Our lawyer can take care of the NIE's application.

It is not strictly necessary, but we definitely recommend that you hire a local agent. This can help you choose the ideal property, because a good agency will recommend the best properties / construction companies and will give you independent advice. That way you can save time and money: a good office knows the local market and makes a selection based on your personal wishes and financial possibilities. Our office will exclude properties that don’t meet your requirements. But we can also advise you which region suits you best, based on the wishes / requirements you specify (type of location, distance to certain facilities, city center, beach, but also type of residential area, etc.). With the help of a good real estate agent you are assured of buying your property at the right location. We also exclude builders who are not creditworthy or do not build according to the quality standards. Rayos de Sol doesn’t charge you any costs for this advice and our services, like any real estate agent we are always paid by the developer or by the owner of the property. In the case of new construction, we as a broker have a stronger position with regards to the property developer; after all, we are the ones who will bring more customers after you. So the developer certainly benefits from helping our customers satisfactorily. The price is the same if you buy through us or directly from the developer / owner, with the advantage that we know how to negotiate. If you use Rayos de Sol, you won’t have a language barrier: Although most building promotions have English-speaking staff, English is often not entirely as we are used to for fluent communication, and sometimes misunderstandings arise. A broker with staff who speak Spanish in addition to your native language is very important to prevent problems. Rayos de Sol is also there for you after the decision to purchase a property. In the event of purchasing a new build property you will be kept informed of the progress. For both new construction and existing construction, we will check the condition of the property prior to completion at the notary. Based on this initial check, we can ask the developer/owner to repair defects before completion at the notary.

Owning a property in Spain is your dream which must be realized in a perfect way. That is why we compile an extensive inventory of all your wishes in advance. Once we have made a selection based on your wishes, it is time to travel to Spain to view one or more properties. Of course we provide personal guidance during your viewing trip. You only have to discuss the dates you want to come with us. If you wish, we will pick you up and return you to the airport. From your hotel we visit the selected properties and will show you this beautiful region. This gives you a good impression of where your new property is located. We will show you where you can go shopping in the village, which restaurants are popular with the locals and we will also show you the beautiful beaches, authentic villages and towns. In addition, we give you advice and will present you to the lawyer. We recommend a visit of 3 or 4 days, in which our adviser has sufficient time to introduce you to the region and ensures that the purchase procedure of your property in Spain is easy and successful.

Of course we can never give guarantees on future returns. In recent years, average property prices in Spain have risen year on year. In addition, the low interest rates in the banks make it even more attractive to invest in real estate. You will enjoy the benefit of rising prices. Some of our clients choose to also rent out their Spanish property. In this way you enjoy your Spanish home yourself and you can also generate rental income, making it a good investment.

Reservation contract and deposit payment: After you have started looking at properties and found the property of your dreams in Spain, the selling estate agent or builder will ask you to sign a reservation contract (contrato de reserva). With this contract, the house can no longer be sold to other interested parties during a certain period. Within that period you can have the property and / or the promoter legally examined. First down payment: After signing you will also be asked to make a first down payment directly. Normally this will be an amount between 2,500 and 6,000 euros, which is paid by card or bank transfer. This amount actually serves as a guarantee and will be settled with the total purchase price upon delivery. If you decide not to purchase, you will in principle loose this amount. However, it is possible to include a clause in the reservation contract that gives you the right to cancel the purchase if the legal investigation reveals that there are irregularities. In that case you can cancel the purchase and get your deposit fully or partially back. The deposit is usually paid into the agent’s / builder’s bank account or third-party bank account of the seller's lawyer. Later payments: For new construction, installment payments are then made for which a bank guarantee is always provided for each payment. Often between 50% and 60% is paid via installments before completion, the remainder (the final installment) at the time of completion at the notary. For existing properties, a payment of 10% of the agreed purchase price (minus the amount already paid) is usually requested within a month. The exact agreements on this are in the reservation contract. The remaining amount will be paid at the time of completion at the notary.