Benal Estate Agents

Legal and Finance.

Buying or selling a property in Spain can seem a daunting task as the Spanish system is a little different to the UK. However, the same basic rules apply:

• Use a Professional Estate Agent who can advise, liase and communicate between all parties.
• Use a Bi-lingual Solicitor (abodago). We are delighted to be able to recommend the services of Anna-Maria Borrell who is English but has been in Spain for over 25 years and is a qualified Spanish lawyer.

The system in Spain differs slightly from the UK in that when an offer is made for a property and accepted, a holding deposit of 6,000 euros is paid to the vendor via the selling agent. This deposit acts as a confirmation of the agreement and removes the property from the market, whilst the usual checks and searches are carried out on the property. Once the legal checks are completed along with any mortgage surveys, then a 10% deposit is paid (similar to UK exchange of contracts) and a completion date is mutually agreed.

Your solicitor will handle all the paperwork and will also arrange for the various utilities (water, electric, telephone etc…) to be put into your name.

Things in Spain can often take a little time to happen!! But, they invariably do, and a good Agent/Solicitor combination is essential to smooth along the whole process.

Basic Cost Guide

• The actual selling price
• The declared value registered on the Escritura (Title Deed)

The reason for this is because it is on the Escritura value that your annual property tax is based and therefore this valuation is usually much lower than the market selling price. When buying a property, in addition to the price, there are a few additional costs:

• Transfer Tax - IVA (like VAT)
  All Property- 7% of the Escritura value
   
• Notary Fees - to transfer the title deeds to the new owner.  These fees depend on the market value of the house on a sliding scale.
  Property registration - the fee charged by the property registration office to register the new title.
   
• Legal fees - these fees are payable to the lawyer you appoint to deal with the transaction.

Finance

Many people these days choose to have a mortgage on their Spanish property. This makes good sense for several reasons even if you have the cash available.

• Having a mortgage is one of the simplest ways to reduce any inheritance duty that may become payable should the worst happen.

• The Euro rate is currently lower than the UK base rate, hence it can make sense to keep your cash in a higher paying interest account and borrow at a cheaper Spanish rate.

We choose to stick to what we know best……..PROPERTY! But we do know several mortgage and finance specialists who have access to many special offers and deals through Spanish Banks. They can advise in great detail on all kinds of financial strategies. We will be pleased to put you in touch with these trusted contacts for free advice.