Buying Property In Spain For Foreigners
Are you dreaming of settling in a beautiful traditional villa on the Costa Blanca or a luxurious apartment in one of Spain's many exciting cities? This guide on buying a property in Spain explains how to make your dream a reality, with advice on legal requirements and the pitfalls to avoid.
Buying Property in Javea
The Spanish property market is not without quirks, and it pays to appoint an agent who will take care of the entire process on your behalf. Knowing what to expect when buying a property in Spain can help bypass pitfalls when setting up your new life abroad.
There's a very well established network of estate agents based in Javea who cater in particular for overseas buyers. As a highly desirable, historical, and consequently very in-demand area, it makes a substantial difference to the buying process if you work with an experienced agency, such as ValuVillas. We have worked in the Javea real estate sector for more than three decades.
Helping You Find The Ideal Property
Following your decision to buying a property in Javea, we will designate a staff member to work with your account, who will assist you in your search. Our staff have excellent language skills and are thoroughly experienced and knowledgeable of Javea and the surrounding towns.
Having a designated agent assisting you in this search will allow us to understand precisely what kind of property you are searching for. The agent will pinpoint a number of suitable properties from our books, and also from those that may be currently handled by collaborating agents.
Once A Dream Home Has Been Found
Having decided on a home and how much you want to offer, your agent will handle the formalities of making a proposal to the vendor. Once a price is agreed, it's time to make a reservation down payment of €3000. This payment is necessary to remove the property from the market. Pre-sale contracts are drawn up at the time of the down payment, and legal searches and inventories are underway.
Following the successful completion of these stages, a pre-contract is usually signed within about one month. A formal 10% deposit is paid (less the €3000 reservation fee). These monies are transferred to the vendor, and an appointment is made to complete at the Notary, where the remainder of the agreed total sum is handed over.
It's not unusual for buyers to visit the property before the completion of the contractual process to get a feel for the home and the surrounding area and ensure that everything is in order. This can be done with or without the vendor's presence, subject to agreement.
Upon the day of completion, your agent will accompany you to the Notary to ensure the written agreement is arranged, and the contract is fully complete. Once the contract is signed – the keys are yours!
As part of our service, we arrange to transfer all utilities and services such as water, electricity, internet, telephone, and local rates and refuse collection over to your name. If your agent does not offer this gesture, you will have to manage this task yourself or hire a gestor to do it on your behalf.
Buying Property in Spain Costs
There have recently been some changes in the costs involved when buying property and land in Spain, and all of these fees and tax costs should be calculated in when searching for a property.
As a rough rule of thumb, adding in the region of 10-12% on top of the property price ought to ensure that these costs are covered, but that does vary at times depending on the value of the sale. These expenses can be used as a factor when negotiating fees. Still, naturally, every property and sale has its own differentials.
Here we're going to take a look at the variety of extra costs that will need to be accounted for when buying a property in Javea and the surrounding areas. These costs range from standard fees such as land registry, stamp duty, and Notary fees down to local levies.
Standard Costs When Buying In Javea – A Quick Checklist
- Stamp duty: This is charged either at a flat 10% of the sale value – Or 10% of the rateable value multiplied by 3.7 – the higher number is the total stamp duty due.
- Notary fees
- Land registry fees
- Administrative costs for deeds etc.
NOTE: Buying land or garage spaces from a private builder/promoter may be subject to VAT instead of stamp duty. This can make a substantial difference in overall cost, and it's imperative to ascertain if you'll be charged VAT (typically 21%) or stamp duty. If you aren't a cash buyer and will be using a mortgage to fund the purchase, you can expect to be subject to the following costs:
- Stamp duty set at the price outlined above
- Notary Fees
- Land Registry Fees
- Administrative costs
- Bank survey costs
- Mortgage set-up and transaction fees
All buyers should also be aware of the following possible requirements which will further add to costs:
- NIE numbers and processing fees
- Property survey
- Solicitor fees
- Life & house insurance
- Bank commissions/currency exchange
- Utility set-up fees
When you need a mortgage for a property in Spain
Securing a mortgage for a property in Spain is generally straightforward and quite a similar process to that of the United Kingdom. As yet, we do not know if requirements will change once the Brexit transitionary period ends on Dec 31st, 2020, but we do not expect significant disruptions. The Spanish government has a policy to encourage foreign buyers rather than making things difficult for them.
When request a mortgage, domiciliary status, income, assets, and employment will all affect the amount offered by Spanish banks, and this can vary significantly.
As a general guideline, if you are already a Spanish resident and meet their credit criteria, the banks are likely to be willing to offer in the range of 70-80% of the value of the property. The percentage is taken from the lowest estimation of the property value set by the bank or the agreed sale price. Non-residents will struggle to get much more than 40-50% mortgages, although again this does depend very much upon individual status.
The best position to be in is to have a Spanish residency and mortgage already, as then the process is comparatively straightforward. Likewise, residents making a first time purchase are very much in a similar situation to any other first-time Spanish buyer. Buyers who are not yet residents will have to provide plenty of documentation – really, the more that can be provided, the better – especially in the event you are self-employed.
Documents Required For A Mortgage
For Spanish Residents, 1st Time Buyers
- NIE & Passport
- Six months of payslips (if applicable)
- Details & proof of other assets & savings
- Last two years of tax declarations
For Current Residents – With a Mortgage
- Six months of mortgage payment documents
- Proof of outstanding balance & monthly payments due
- All of the above plus:
- A letter of recommendation from a bank
- If self-employed, detailed proof of income
While this may sound a complicated journey, as professional agents it is a straightforward process that we have completed hundreds of times. So let us manage each stage of the sale on your behalf, while you relax knowing your Spanish property purchase is in safe hands. We offer not just a complete service throughout the buying process, but also take the aftercare of our clients very seriously. If there is anything we can do to help you after the sale completes, we are always more than willing to oblige. We pride ourselves on offering a genuine life-long service.
For over 30 years, ValuVillas has been a leader in the Javea property market sector. Every year we make it simple for buyers and sellers to enjoy a smooth property transaction. Based in the heart of Javea on the Costa Blanca, we offer solutions to guide you through the buying process and make your dreams of owning a Spanish property come true. With a vast choice of properties on our books, we can find you an apartment, villa, townhouse, or building plot to match your needs. For more details, download our free Spanish property buying guide.