Buying a property for sale in Spain
FREQUENTLY ASKED QUESTIONS
Below is a list of questions that are frequently asked when buying a property for sale in Spain, together with our answers thereto, all conveniently organised by subject matter. If having reviewed this list, you still have an unanswered question about our Spanish property , please feel free to send it to us. We will make every effort to provide you with a prompt answer.
Property for sale in Spain - The Buying Process
Spanish Property Maintenance Costs
Renting Your Spanish Property
Property in Spain Horror Stories!
Other Frequently Asked Questions
Property for sale in Spain - The Buying Process
Could I buy the Spanish property cheaper elsewhere?
Kingdom-Homes offer all Spanish property at the developers official listed prices, as required by our collaboration contracts with those property developers. All other Spanish property agents and consultants are required to do likewise. Your choice of agent or consultant, therefore, will make absolutely no difference to the price of your chosen Spanish property. There is one official list price for all purchasers, including those who choose not to use an agent or consultant and go directly to the developer.
Are you independent?
The honest answer to this question is no. Surprised? Let us explain.
Kingdom-Homes does not profess to be independent. Nor do we believe that the other property agencies or consultants, in spite of what they say, are truly independent either. Why? Because the commissions we all receive for our property for sale in Spain from the various property developers are not identical, some developers paying more than others.
The property you purchase, therefore, might well make a significant difference to the income earned by your agent or consultant. And to a large extent it is the latter that determines what you see, and thus at least the properties that you choose from.
It is absolutely critical therefore to choose your agent or consultant carefully when buying a property for sale in Spain. Kingdom-Homes, apart from providing a personal and very professional service, operates at the highest levels of integrity, putting the interests of our clients before our own commissions. We challenge you to find another property company that will promise to do that! Please see About Us for the principles on which Kingdom-Homes operates and for client testimonials that support them.
Apart from the property price, what other purchasing costs can I expect to incur?
We recommend that you budget 10% of the purchase price of the property in Spain to cover all the other costs associated with the purchase of your property.
This is made up, basically, of two elements: tax, at 7%, and a further 3% to cover the costs of your lawyer, the notary, land registry fees and other miscellaneous items.
Will I get a Freehold title?
Yes. Unlike the UK, all residential property in Spain is owned Freehold, even apartments.
What are the advantages of buying a new Spanish property?
There are probably three major advantages to buying a new Spanish property:
The ability to fix the total price of your property at the time of purchase, whilst making part payments for it at various times between the time of purchase and its future completion (please see the next question also). New property in Spain now comes with a 10-year building guarantee, very similar to the NHBC guarantee in the UK (although this type of guarantee has been compulsory in many countries in Northern Europe for many years, it has only recently became compulsory in Spain); The overall quality or standard of the property is likely to be significantly higher, reflecting both the significant increase in the Spanish standard of living in recent years and the lessons it has learned from its past mistakes.
When and how is the cost of a new property paid?
If you buy a new property, your purchase agreement will determine when you are required to make your various stage payments, and the exact amount of each. The terms of these agreements vary from one developer to another, but as a general rule, they will include the following elements:
An initial deposit, normally of 3,000 Euros. This is paid when you have decided on the property you wish to buy, and is normally made using one of your UK credit cards. The payment of this deposit initiates the sale of this property to you, the developer removing it from his list of properties remaining for sale. The price of the property is now fixed, gazumping being illegal in Spain. You will be given a receipt / reservation notice for this payment, which will be deducted later from one of your future payments. The first major stage payment, payable when the purchase / sale agreement is signed by both parties. This is normally 30 days after the payment of the initial deposit, and will normally be somewhere between 20% and 50% of the agreed purchase price of the property. 7% tax must be added to this payment. The payment of the outstanding balance on completion of your property. This could be a year, 18 months or 2 years from the time of purchase, and will normally be somewhere between 50% and 80% of the agreed purchase price of the property. Again, 7% tax must be added to this payment. This payment coincides with getting your keys and with the signing the official title deeds before a state notary.
Sometimes, a second stage payment is required sometime between points (2) and (3) above, perhaps after 6, 9 or 12 months, or when the roof goes on.
The above mentioned payment terms, presented as standard, are sometimes negotiable.
What’s the difference between a lawyer and a Notary and do I need them?
The notary is a state official, that works neither for you or the developer, and who’s fees are governed by state legislation. The appointment of a notary is obligatory, as no title to land and / or buildings can pass without their involvement. The notary must insure that the transaction complies with all applicable legislation.
Lawyers work for the individuals or companies who hire them, as in the UK, and their fees determined by the parties concerned.
Kingdom-Homes strongly recommend that you appoint a local Spanish lawyer, who speaks fluent English, to ensure that your interests are protected. We also suggest that you never use the lawyer recommended by the developer of your chosen property.
With detailed knowledge of the local market, we will gladly help you with the appointment of a lawyer.
What are the different mortgage options available to me?
Mortgages are widely available in Spain and the market for them very competitive……..….very good news indeed for Spanish property buyers!
Although the best option for any particular purchaser will invariably depend on their individual circumstances and preferences, a local Spanish Euro mortgage will normally be the best option for most buyers, especially given current market rates. We have extensive knowledge of the local mortgage providers and the various products they offer, and will gladly help you with this.
Do you have any personal recommendations?
Our most important general recommendations are the following:
Choose your agent / consultant very carefully. We believe that what really counts is their integrity. Ask yourself, will they put my interests before their own? We say, we will. Always appoint a local Spanish lawyer that speaks fluent English and that is independent of the developer you choose to buy from. Request a bank guarantee to cover your stage payments on a newly built property. If the developer is not prepared to give you one, we recommend that you ask yourself why that might be, and reconsider your choice of property. Although most developers will provide them if requested by the client, very few developers will offer them if they are not requested (some developers penalise their commission payments when a bank guarantee is given!). Always ask if the stage payments on a newly built house can be negotiated. For some developers, they are absolutely fixed, but others provide some flexibility if it is requested (again, some developers penalise their commission payments in these circumstances). Give some serious thought, before you travel out to Spain, to your selection criteria - to what you really must have, to what you would like, to what is and is not important to you, and to their relative importance. If you would like us to give you a call in the UK to help you with this please use our request a call back service. The closer you go to the coast, for example, the more expensive the property is likely to be, and the more densely populated its immediate surroundings. Golf resorts, on the other hand, with their numerous facilities and lower land density, are more expensive than comparable properties elsewhere, but offer better all-year-round rentability. Take your time. The purchase of a property in Spain is no small decision. If you’re not completely sure, don’t buy!
SPANISH PROPERTY MAINTENANCE COSTS
What are Community Fees?
If you purchase a property in any kind of resort or complex, having any kind of communal facility (basically, absolutely anything other than a free-standing villa surrounded by its own land), you will automatically become a voting member of a community of co-owners (communidad de propietarios). This is a legally constituted body required and governed by Spanish law (Ley de Propiedad Horizontal). It exists to maintain the communal facilities of the development, such as the communal gardens and pools, the tennis courts, the security service, the lifts and staircases etc.
Community fees (gastos de communidad) are paid monthly by each property owner to meet the global cost of maintaining these facilities. The community statutes show exactly each owners respective share of the community (cuota de participación), which is calculated using a complicated formula of plot and property sizes etc.
We will ensure that a reliable estimate of these costs is provided to.
These costs are normally paid automatically, by direct debit, from your Spanish bank account.
How much do the various utilities cost for a property in Spain?
Your water, electricity and gas bills will depend on the length of time your property is occupied, the habits of the occupants, and the overall size of the property, as in the UK. Much lower heating costs in winter might be compensated by the cost of air conditioning in summer. As a general rule, all other things being equal, they will be lower than in the UK.
Utility bills are normally paid automatically, by direct debit, from your Spanish bank account.
What local taxes (rates) can I expect to pay?
The local authority levies a local tax (Impuesto de Bienes Inmuebles or IBI) to cover the local costs, such as refuge collection. This is the Spanish equivalent of UK rates. Although this cost will depend, as in the UK, on both the size of the property and its general location, the cost is likely to be substantially less than for a comparable property back home.
It is payable annually, normally by direct debit, from your Spanish bank account.
RENTING YOUR SPANISH PROPERTY
Can you help me to rent my property in Spain?
If you want to rent your property in Spain, for all or part of the year, we will put you in touch with specialist rental companies that operate in the general vicinity of your home and help you to choose / negotiate the terms of any agreement.
How much rental income can I reasonably expect from my Spanish property?
The rental income achievable will depend on the type, size and quality of your Spanish property, its location and the services available. Sea front properties will normally achieve the highest summer-time rents, but are less sought after out of season. Golf resorts, on the other hand, can be expected to provide a good rental income for most of the year, thus providing a better all-year-round return.
As an example, a standard two-bedroom apartment in an established golf resort currently commands a rental income of between €400 per week in the winter and €700 per week in the summer – almost € 14,000 per annum, at a conservative 50% occupancy rate.
What will key holding / property management cost?
The majority of companies offer 2 or 3 standard packages, depending on the level of service you require. A comprehensive package, including: key holding, cleaning and maintenance, maid and laundry service, and a meet and greet service, will cost approximately 20% of your rental income.
PROPERTY IN SPAIN HORROR STORIES!
What’s the truth about all the horror stories we hear in the UK?
There has been much publicity in the British press and on British television about people who have had nightmare experiences as a result of buying or owning property in Spain. The best known concern the so-called Land-Grab legislation, where property owners have either had some of their land taken from them and / or where they have had to contribute to the cost of certain new infrastructure developments, such as new roads, they do not even want built.
The problem started when a new law was introduced in Spain in 1994 to prevent individual property owners (in rural areas subsequently reclassified as areas suitable for urban development) standing in the way of development projects that would benefit the community as a whole. In recognition of the fact that the value of these rural properties would increase significantly, the law obliged their owners to contribute to the cost of these development projects with part of their land and/or cash payments, even if they objected to the development projects, preferring the older rural ways.
Unfortunately, in one particular area of Spain (the community of Valencia – Alicante, Valencia and Castellon) the law was very badly drafted. The legislation in this area was then subsequently exploited and abused by a small number of developers and local authorities against the interests of these rural property owners. The rest of Spain, which has better drafted versions of the law, has not experienced these problems. This abuse only affected the relatively small percentage of people who had bought property in rural areas, not the vast majority of people who purchase in areas already urbanised or in areas already classified as suitable for urbanisation. The relatively small number of people affected by this abuse included local Spaniards and other foreign nationals, as well as the British.
If you still have any doubts about this problem, and / or its applicability to your own proposed purchase, please do raise it with your appointed lawyer.
Over one million British people now own their own homes in Spain, and the vast majority of them have never experienced any such problems.
What’s the worst thing about buying a property in Spain?
We believe that Spain, and the Murcia / Costa Calida region in particular, is a truly delightful place to live……..It’s why we live here ourselves.
The above said; it’s not heaven. Some people, for example, find the following a little annoying:
that just about everything is closed for 2 or 3 hours mid-day; the lower importance generally attached to punctuality; public sector bureaucracy; and the infamous mañana
OTHER FREQUENTLY ASKED QUESTIONS
Will I need to make a Spanish will?
If you purchase a home in Spain, Kingdom-Homes will recommend that you make a Spanish will. This will enable you to nominate your own beneficiaries to your Spanish property and to avoid the legal problems associated with Spanish Inheritance law.
Your local Spanish lawyer will help you to prepare your will for a very modest sum and deposit it for you at the notary’s office. |
