10
Tips For Searching For Property In Spain
By Patrick
Collins
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January 2007
| Spain
is a uniquely attractive place to buy a vacation home, or even to move
to permanently. Economic factors are favorable, climactic conditions
couldn’t be better and the quality of life is excellent. Foreign
homebuyers are attracted to this fresh, stimulating country by the promise
of sunny coasts and a warm, fun-loving culture. It's always a good
idea, however, to exercise patience and discernment when looking for property
in a foreign country. Here are a few simple tips to make sure your
search for a dream home doesn't take on any nightmarish characteristics.
1. Identify
the area you want to buy property in.
Before even
leaving your native country, you should identify what region of Spain you
want to buy a house in, since property prices vary greatly in each province.
Take into account factors such as the kind of budget you're working with,
lending possibilities that are open to you and whether or not property
values in the area you're interested in are expected to rise. If
you're planning on living in Spain full-time try finding out what conditions
are like throughout the year, since living somewhere in the winter can
be a completely different experience than vacationing there in spring or
summer. Also keep in mind such factors as accessible shopping, good
schools for your children and nearby employment opportunities.
2. Talk
to people from your country that own property in Spain.
Ask someone
you know about their experience buying property in Spain. Your friend,
a friend of a friend, your cousin's friend's sister … surely you'll be
able to find someone if you ask around enough, especially if you live in
the UK or Germany. Listening to actual experiences will give you
a good idea of what the property market in Spain is like for someone with
your cultural perspective and prepare you for the unavoidable difficulties
you'll come across as you search for your Spanish home.
3. Find
a trustworthy estate agent.
Estate agents
(called inmobiliarias in Spain) can provide you with helpful information
and offer the convenience of a pre-selected portfolio of properties they'll
take you to. It's very important, however, to be careful when selecting
one because strict requirements to becoming an estate agent don't exist
in Spain and there are thousands of them to be found. A single individual
can set up an agency and provide a low level of service or even scam buyers
by taking their money and never selling a single property. Having
said this, there are plenty of dependable agencies that can make your buying
experience infinitely easier – you just have to exercise good judgment
when choosing one.
4. Don't
rush in.
When first
visiting an attractive property it's easy to get carried away with excitement,
but try being as objective, analytical and realistic as possible.
Take notes of what you want beforehand and compare them to what you observe
on your visit. Afterwards, sit down and see how the property measures
up to your list, jotting down any questions that may arise. Don't
be too quick to discount what may seem like minor inconveniences at the
time just because you really love a property – try to project a few years
in advance and weigh long-term pros and cons. To avoid succumbing
to pushy sales tactics and making hasty decisions, it's best to make at
least two visits and consider as many factors as possible before making
an offer. For example, if you're searching for an adorable villa
in some remote location, keep in mind that you'll have problems selling
or renting down the road if the need ever arises.
5. Get professional
legal advice.
If you've
set your heart on a given property, it can be seriously disheartening to
come across major problems at the last minute. Illegally obtained
building permissions, sellers who don't actually own the property, structural
flaws or unpaid property debts are just a few things that could go wrong
and cause you serious problems. It's well worth the effort of hiring
a lawyer to make sure everything's in order before getting too committed
to a particular property – perhaps even before making a visit if you're
buying from abroad. A bit of legal advice in advance will help make
sure things go smoothly as you get closer to making the purchase.
6. Research
off-plan properties.
Buying off-plan
(properties that haven't been built yet) can be advantageous in many ways.
By paying 10% of the future property's price before the building process
begins, you'll be able to get the house you want on the plot of land you
want, often at a cheaper price. But approached the wrong way, buying
off-plan can be a risky endeavor. Hire a lawyer that specializes
in property law to make sure everything about the off-plan development
is legitimate before getting committed. Definitely avoid the mistake
of deciding to invest in an off-plan project without physically visiting
the construction site; a pretty brochure will never provide you with all
the information you need to make an informed decision. One simple
visit will help avoid surprises such as overcrowded plots, nearby railway
tracks or lack of access to shopping and other conveniences.
7. Preplan
financial matters.
If you plan
on getting a mortgage to cover a high percentage of your future home's
cost, it's a good idea to talk to a bank before finding a property.
Get pre-approved to have the peace of mind that you won't be left high
and dry by your bank later on. You can get mortgages from banks in
your home country or from Spanish banks, but be sure to spend some time
and effort shopping around for the best deals. There's a lot of money
to be saved at this stage of the process and it's not worth simply going
with the first place your estate agent recommends. The same goes
for exchanging currency. Rather than using the first bank you run
across, go to the extra effort of finding a company that specializes in
currency exchange and offers good rates. |
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Previous
articles on Spain:
|
Coming
to Spain: Part 2 - As
a U.S. citizen living in Spain, I can tell you that people here are just
too social and friendly to let a chance at positive interaction pass by
because of something as unimportant as someone's nationality. This
might not (actually I'm pretty sure it doesn't) hold true in all other
European countries, but then again, you really can't compare Spain to any
other country in the E.U.
Coming
to Spain?
The first
part in a series of short practical articles (very general in scope) for
people who plan on visiting or living in Spain, written with the intention
of pointing out aspects of Spanish life that may be challenging to foreigners.
Spanish
Property Prices
For many years
now, Spain has been one of the most popular places for those wanting to
start a new life in a foreign country. By far one of the most popular reasons
was that house owners could sell their existing property in their home
country and purchase a property in Spain at a very good price - thus leaving
a large amount of capital that could either be invested or help serve as
income through the forthcoming years. |
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8. Factor in
taxes and other added costs.
The IVA (Spain's
VAT) is a cost you should definitely take into account when shopping around
for a home. For new homes the VAT is around 7% and there's a 6% stamp
duty for second-hand homes. If you're buying a new home and plan
on installing a swimming pool it's advisable to include it in the original
plans and have it built at the same time as the house. This way you'll
only have to pay a 7% VAT, whereas if you wait until after the house is
built, the pool will be considered a luxury item and you'll have to pay
a 16% charge. Other expenses you should factor in are legal fees, property
registration costs and – unless you speak good Spanish – translation costs.
9. Be prepared for sellers to
ask for black money as part of the sale price.
In second-hand home sales, it's
quite common for black money to change hands between the buyer and seller.
An undeclared cash payment means that the total price on the sales contract
reflects a lesser amount than the actual price of the property. Buyers
pay less tax on the purchase of the home and owners save on capital gains
tax. Keep in mind that although this type of practice is widespread,
it's also illegal, and it could end up backfiring if you ever have to sell
and your buyer wants to declare the full price of the home. In this
case, you'll make a larger capital gains tax payment that'll reflect any
rise in your property's value plus the amount that went undeclared in your
original purchase.
10. Apply for necessary documents
in advance.
By law, all foreigners who plan
on buying or selling in Spain need an NIE (Foreigner's Identification Number).
In Spain, you'll have to go to an office of the Policia Nacional and fill
out an application in the Oficina de Extranjeros(Foreigner's Office).
If you live in the UK, you can apply for this document at one of the Spanish
consulates. Be sure to bring a passport-sized photo of yourself,
your passport and a photocopy of your passport in either case. Also
consider opening a Spanish bank account, which will make money transfers
and related activities easier and faster. You might also want to
find out beforehand what you'll have to do to change your fiscal address
and save yourself a considerable amount of money in tax payments, although
this will depend on how long you plan on staying in Spain. Finally, if
you or anyone else involved in the future purchase won't be present in
Spain, file for a power of attorney so that the process can move along
smoothly once you find a property you like.
| Patrick Collins works for www.oppspain.com,
a property consulting company specializing in new developments and off-plan
properties in Spain |
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Costa
Rican Spanish - Christopher Howard, the foremost expert in living and
retiring in Costa Rica and author of the No.1 bestselling "New Golden Door
to Retirement and Living in Costa Rica", has written a one-of-a-kind language
book for people wanting to live in or just visit Costa Rica. It is the
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and make this book more enjoyable. Thus, people of all ages can benefit
from it. |
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