Buying Property in Spain
Advice for Buying Property in Spain
Many of the British public still tend to be influenced by TV programmes which are often misleading. You may not notice that some of these shows were filmed over a year ago when the price of buying property in Spain was very different.
Often, you will see ads either paper based or on the internet that list cheap property prices, but when you make an enquiry you are informed that the property has been sold – probably last year! You may then be offered ‘similar’ properties but of course the price has increased.
We still have clients coming to us to buy property along the Costa Blanca looking for a three bedroom villa with private pool near the beach for a budget of around £50,000 pounds – be warned – you just wont find it!
The best way to get a realistic idea of the type of property you can get for your money, is to do your homework in the area local to where you are looking to buy, and spend some time looking around. More and more people are looking for long term rentals – 3 months or more – to get a taste of the ‘real Spain’, thereby giving themselves a true insight into property prices, maintenance costs and living expenses. If you are looking for a ‘buy to let’ property, take advice from letting agents who will know their market and advise you on the most rentable areas, furnishing, and rental income. As Citrus Iberia’s letting experience dates back to 2002, we are deal people to ask.
The cost of buying in our region is rising again following the recession – although we didn’t get hit as badly as the South – making a good return on investment for buyers. Spain offers a ‘feel good factor’ to many Brits who may have had their first ever holiday abroad on a Spanish ‘Costa’, and despite the fact that there are other places in Europe which can compete in price with Spain, they do not offer the same ‘familiarity’.
Estate Agents operating a business in Spain do not actually need any formal qualifications, and many agents are only in the business for the short-term gain and high commissions which can average at around 10%. Be sure to pick your agent carefully, and ensure that he is not going to just make his money and leave you high and dry. In 90% of cases, you will need at least the minimum of ‘after sales care’.
Many British buyers opt to buy land and build their own property rather than buy a resale, but are not usually familiar with building regulations and permissions with the belief that this responsibility falls to the builder. In most cases this assumption is incorrect, the builders are only concerned with building homes, it is the purchasers responsibility to ensure that the property is legal and that they have the correct paperwork.
You will often find many companies operating in the same area will have some of the same properties for sale. It is advisable to look at the prices in each agency as they will vary depending on the commissions added by each individual agent as commissions are not regulated by any governing authority.
Many people believe that when they are buying in Spain, they can avoid the agents commissions by going directly to the developers, however this is no longer true as prices are set. It is actually more sensible to buy through an agent as they will help you with all the legalities whereas the builders normally would not.
Below is an approximate list of charges which will apply to the purchase of your property in Spain. These are approx 10% of the property purchase price:-
The charges below are based on a property for 100,000€
IVA (similar to VAT) @ 7% = 7000€
STAMP DUTY (new builds) @ 1% = 1000€
LEGAL FEES = 600€
NOTARY FEES (approx 0.5%) = 500€
LAND/GESTORIA (approx 0.5%) = 500€
APPROX TOTAL = 9600€
It is common in Spain for the Escitura to list a price lower than the actual purchase price of the property, this is a well accepted tax dodge which reduces the tax (plus valia) that the vendors pay. The tax is based on the profits made on the property since the vendors originally purchased it. The difference between the purchase price and the Escitura price is often paid direct to the owners in cash.
Connection charges for water and electricity also apply to new build properties are approx 450€.
If you require more in depth advice on buying a property in Spain in the Costa Blanca north area, please do not hesitate to contact us
Category : Property News