Rebuild a Spanish Village

 

Should I use a solicitor from my own country?

This is unnecessary, as your lawyer back home would still have to use a local Spanish lawyer resulting in you receiving two sets of legal bills. We ensure that all communications from your Spanish lawyer will be in your own language. Your legal representative will discuss the optimum way to buy a property which best suits your circumstances. He will also make all the necessary investigations on the property to be purchased. Once he is satisfied that everything is in order, including finance, the private contract will be signed. Your solicitor will advise you when this is ready to take place.

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Do I need a Spanish bank account?

Opening a Spanish bank account is very straightforward and is a good idea to manage all your property purchase expenses. As the developers we will also require that stage payments be made from a Spanish bank account. We work with a bank that offers an English service together with Internet banking so you check your accounts whilst you are in the UK. You can either open an account in person during a visit here or your lawyer can open one on your behalf. You need to provide two forms of identification (passport or a driving licence with photograph will be sufficient)

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Can non-residents buy property in Spain?

Non-residents have been buying property in Spain for at least the last 20 years, Spain is part of the EEC and they actively encourage people to purchase property for holiday homes or to live there. As with the tourist industry, it brings a large amount of money and work into the country. Literally hundreds of non-Spanish people buy property in Spain every week. The low cost of living and the pleasant climate being the main reason, the relatively low cost of property pricing being another. Buying property in Spain is just as easy as in the UK once you adapt to the 'no-rush' way of doing things.

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What about paperwork?

No matter what you want to get done, be prepared for a large amount of bureaucracy (eg Empadronamiento, Residencia, working with Notaries, buying property etc.) and can sometimes be quite trying if you lack the language skills. Many people employ a gestor to oversee these matters such a paying their annual and local taxes.

*always bring more documents than you think you'll need (e.g. Passport photos and passport photocopies)

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What official documentation do I need?

The Número de Identificación de Extranjeros (NIE) number are legally required, usually after purchase. It is your non-resident fiscal ID number, which you will need in order to pay for the standard property taxes mentioned above. You must apply for a NIE in person at your local police station with 2 Passport photographs, 2 photocopies of your passport and a copy of your title deeds, it will be ready for collection in about 4 weeks. Alternatively, a Gestoria can do this on your behalf.

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Do I need an identity card if I move to Spain?

Apart from the UK all European countries operate an identity card scheme. You will need to apply at a national police station, which has a foreign department, for residency. It is advisable to carry your driver licence photo card ID with you at all times as many shops and supermarkets will ask for some form of ID before they will accept your credit card.

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How much deposit should I expect to pay?

Allow for 4000€, and then there will be no restrictions to reserving the property of your choice. The easiest way to do this is by cheque/cash/transfer into Gibbs holding account. Advise your bank before you come to Spain that you may be making a large transaction for a property reservation, and you should have no problem in making the first step towards buying your Spanish home.

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What about making payments to and from my Spanish bank account?

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. Payments can either be made via standing order or one of via a fax authorization from the UK.

*Always use an IBAN (International Banking Account Number) when making and receiving international transfers, it will save you time and money. Ask your UK and Spanish bank and they will generate your unique IBAN for your accounts.

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Do I have to be here for each stage of the legal process & to sign the title deeds on completion?

No. You can instruct your lawyer to act on your behalf, even for the final handover on completion. The notarial system in Spain means that completion is never the exact science so by arranging for Power of Attorney your lawyer can sign on your to complete the transaction behalf, however make sure that Power of Attorney is specified to last for a set period of time not your lifetime. Once the deeds are signed and the keys are effectively handed over, your lawyer can arrange for the utility contracts with water and electricity companies which usually takes a week or so.

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What if I change my mind before completion?

You are committed having signed a Private Purchase Contract with the initial investment but in many cases if you decide that you do not wish to go on to complete the final purchase of the property after 2 years, you may be allowed to sell it on before completion. Many people have realised excellent returns on their money invested by executing this option.

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Is it not best for me to wait for prices to slow down?

It is best to find a property now whilst you can still make it happen within your budget. There are no immediate signs at all that the demand for property here is going to drop off. Therefore prices are more than likely to continue rising as Northern European's focus shifts to an improved lifestyle and they continue investing aboard.

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How do I know what is a good investment?

The simple answer is that you will not know until you have realised a return on your investment. However the nature of our projects offer a uniqueness and quality not always available. This coupled with our relatively small number of developments means there will always be a market for a property developed by us - it may just take time to find the right buyer. It is important for us that you buy the right investment, not just any investment, as our reputation is at stake.

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What are community fees?

If you purchase in a community project you will be required to pay community fees. Community fees go to a centralised fund and are used to cover the costs of urbanisations that have the benefit of services such as a swimming pool, 24hr security, up-keep of gardens and general maintenance i.e. servicing of lifts and periodical repainting of external walls. Currently only 1 of our developments (CdH) will involve such a scheme. The final community fee has yet to be confirmed. All owners within such a community have the right to put themselves forward to be part of the committee should they wish.

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Do estate agents offer exactly the same property as you?

No. You deal directly with us - the developers. To keep costs to a minimum and maintain good relationships with our clients we do not use selling agents.

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How do we know that our money is safe?

A bank guarantee is in place for safeguarding your payments. In the case of default you will receive all your money back plus interest.

*Note A new law is now in place, which means all developers now are unable to take any monies against the purchase of an apartment/spanish property unless a building licence has been approved. We create a file on each development open to all clients, which contains copies of all mandatory documentation including building licences, bank guarantees as well as information on past projects. When signing private purchase contracts, all developers must by law produce evidence that we have a bank guarantee and/or an insurance policy.

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What happens if Gibbs SL disappears or goes bankrupt before completion?

Spanish and EU laws have tightened up the process and have been in place for many years to safeguard the interest of the purchaser. If the developer runs into difficulties, such as bankruptcy, as stated above your money is bank guaranteed, this safety mechanism is designed to ensure return of all monies paid to date, plus interest in the event that the property does not get finished.

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Is there a building guarantee with new property?

New Spanish properties also have a 10-year building guarantee very similar to the NHBC guarantee in the UK, which is now compulsory in Spain.

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Is the property freehold?

Yes.

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Who will get my Spanish Property if I die?

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. Your Lawyer will advise the best way of doing this and it can be included in the overall costs in connection with your purchase. He will also advise of any potential tax liability for the inheritor of your assets. If you are UK-domiciled your heirs will have to pay IHT in both Spain and Britain on a Spanish property. You will typically pay between 15% and 50% of the value of the property. Spouses and children pay a lower rate than other people.

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If I sell, what will the levels of Capital Gains Tax be?

In accordance with Spanish law, non-resident sellers must pay 35% capital gains tax Plus Valia (Incremento de Valor de Bienes de Naturaleza Urbana) on the sale of a property in Spain. Purchasers are always obliged to withhold 5% of the SALE / PURCHASE price at source and at the sale moment in the name of sellers who are considered non-fiscal residents by the Spanish Inland Revenue. In excess of 5% should be paid by the sellers within 4 months from the sale date. In the event that the seller has owned the sold property for longer than 10 years back counted from the 31st December 1994, they should be able to claim most of the 5% retained tax paid by the buyers. We recommend you to get legally assistance by Spanish tax professionals, who can advice and analyze your situation and calculate the final transaction cost.

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How easy is it to obtain a mortgage on my Spanish property?

Euro mortgages are readily available on Spanish property, interest rates in Spain are generally lower than most European Countries. Some of our clients choose to release equity from existing UK property to fund the initial payments and then take a Spanish Euro mortgage upon completion. Spanish banks will usually lend up to 70% of valuation to non-residents. The mortgage market is not as sophisticated as the UK (in terms of product choice) but the application process tends to be very simple. Most mortgage products are repaid on an interest and capital basis, with a maximum length of 20 years. The advantage of a euro mortgage is that buyers are protected from any currency exchange volatility. Spanish mortgages are again paid directly from your Spanish bank account.

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How can I apply for a Mortgage in Spain?

When applying for a mortgage, the bank will normally ask to see proof of income (for an employed person) - last P60, last 3 months salary slips and last 3 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. Generally the upper age limit is 75 years of age and repayment periods are usually between 5-20 years.

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Will I be able to inspect my property before I complete?

Absolutely! With a new property, before you instruct your lawyer to complete the purchase, we will inspect the property with you and detail anything that might need putting right. Once rectified to your satisfaction, the title deeds can be signed.

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We would like to let the property out when we are not using it. Can you help with this?

Of course, as part of our complete aftersales service we can help you with all aspects of property management. Finding someone to rent out your property for you is not a difficult task. However finding someone to do it in a professional and reliable manner is not as easy. We work with reputable companies who can assist you with this service, be it holiday rentals or long term renting, which have active marketing departments constantly looking for new tenants via Travel Agents or Golfing Organisations. The average rental charge is 20% of gross rental income received. Allowing for mortgage payments and letting costs, you can enjoy a healthy rental income from your new property however, a 12-month letting period is unrealistic and any agency that promises such figures must be able to back such claims up with evidence.

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What happens about utilities like water and electricity?

Your legal representative can ensure that all your services are connected. All utility bills can then be paid directly from your local Spanish bank account.

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Can I take my car to Spain?

You can take your car to Spain if you have owned it for more than 6 months. The DVLA should be contacted in the UK where you need to apply for a certificate of permanent export. On doing this you will surrender the original registration document. This only applies to non-residents. If you become a resident and wish to use the car then you will need to re-register the car on Spanish plates. If your move is permanent you should apply for a Spanish Driving Licence to replace your old one.

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Can I have my state pension and other pensions paid to me in Spain?

The DHSS will provide you with the relevant information on how to do this. There are now reciprocal agreements in place between all E.E.C. countries and normally your rights are transferable. You can be paid directly to your Spanish bank account. With private pensions you need to contact your supplier and advise them of your wish for it to be paid directly into your Spanish bank account. Remember to check if there are any conversion charges and to discuss changing sterling into Euros.

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Can you organize accomodation for us while we are looking for some property?

Yes, we are able to organize accomodation at a number of local places. Please feel free to talk to us about your requirements.

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