by Charlotte Amanda, a member of our team has put together the information below to explain the differences between UK & Spanish property purchases.
As property experts we are fortunate to meet an amazing array of clients. As part of our early stages of communication with our clients, we would discuss the topic of the buying process here in Spain.
We thought that it would be useful to share this here with you now. If you are in the process of considering a Spanish purchase, it is important that you gather all the relevant information to allow you to make a valid decision for you and your family.
Well that day has come when a life situation hits you like a thunderbolt. The demands at work may have caused you to reflect on what life is all about; you take valuable time to sit down with your loved ones and think about how the future COULD LOOK.
Maybe you’ve had this featuring privately on your personal annual dream board at work. Or you have all wanted this additional home for the family within personal goals and aspirations.
We understand the desire and wish to have an escape to the sun periodically as it could benefit the work life balance that you are now questioning.
So, sitting down with this extra time we have all been afforded recently, the questions start to become more prominent.
Is it the time now to sacrifice and maybe stretch yourselves to afford a place abroad once this is all over?
Would you get enough use from a second home, could you get out there often enough to warrant the huge investment and do you or would you REALLY need it?
Could it be self by renting it out?
The considerations are important: Let’s face it, considering “A PLACE ABROAD encompasses many options! Where on earth could be feasible?
Maybe start with airports, where is the nearest one to your home and what are the most frequent locations and choices available to find a good destination that appeals?
Now at what point within your life journey are? Perhaps with a new family starting, or you are in the middle of achieving great things to be able to afford a luxury, or are you beginning to decide about the future and think about retirement, now or in the years to come?
Where do you start, what do you need to do, how easy could it be? So many questions and the trigger to kick starting these questions often comes along by accident, as it has for so many of our buyers.
A pal tells you how excited they are because “they’ve just gone and done it’, we’ve bought a pad abroad, we chose Spain because it’s so very easy to get to, loads of flight choices for all our family and it represented a fantastic deal, got a superb real estate agent who guided us through the lot.
A colleague at work questions you, “have you thought about escaping the rat race and attempting to get off the treadmill, we’ve found a place abroad which allows us to work and play, it has the latest fibre optic, go play a round of golf before the day starts, I can then work from here all day, but have a beer on the terrace overlooking the Med whilst I carry out my role, SIMPLES”;
Then the other regular reason we hear is that the family have started to talk about investing for the children’s future, have something to hand down to the grandchildren and have a place to escape to all year round rather than just that 3 week August break. Children and Grandchildren can’t afford annual holidays so let´s buy a place for the family to enjoy some time away. Life is too important and precious especially after this experience; we want to live more, to enjoy and have fun together now and escape whenever we can.
So, surely it cannot be that difficult, let´s face it, millions of people own, work remotely or live in Europe abroad nowadays.
So what are the similarities?
The estate agents here as in the UK, help you to find you your dream home and the lawyers will do their legal searches as in the UK, then that’s where the differences begin.
Finding a bi lingual lawyer is very simple nowadays. They do everything for you from protecting your initial investment at the reservation stage by taking a non refundable deposit, all the way through to producing your copy of the title deeds.
Most of our clients are pleasantly surprised to learn they even get help from lawyer to set up all the associated Direct Debit Mandates for the service providers (water electricity, IBI, annual community fees, telecoms if applicable), so there are no worries about the running costs afterwards, it’s all taken care of. However please be aware that these will be in addition to the 1% plus VAT (IVA) that the lawyers will charge.
Once you have signed and paid your reservation deposit, the lawyers will set about with their legal searches and once satisfied will arrange for a private purchase contract to be drawn up. This will include amongst other things a completion date at notary and the inventory of the property. At the point of signing this, a further deposit will be requested that is 10%, less your initial reservation deposit.
The Lawyer will send you in detail the full amount including taxes, that is required for you to complete your purchase.
Then of course you just have to buy the champagne to celebrate. We are very happy to oblige as we all love the bubbles in our office, we definitely don’t need any excuses to assist you!!!
What are the key differences?
Property surveys are optional though not common at all. Most purchases here are apartments and therefore no survey is required. With townhouses they are as equally rare and generally only villas are surveyed. A survey will be carried out if you buy with a mortgage but again with apartments and townhouses this will only be a valuation survey, not a building survey.
We have relationships with professionals here if this was a specific requirement.
Videos and floor plans have not evolved as standard practice compared to the UK, but we as Real Estate Specialists at Castles Estate Agents recognise that this would be useful and have been developing this concept to help our clients, so you will see more and more appearing.
There are three steps to buying
1) Securing a reservation with a reservation contract and €6,000 reservation deposit. This takes the property off the market. This reservation deposit is only refundable should there be a legal issue that can´t be resolved.
2) The exchange of Private Purchase Contract with 10% in total deposit.
3) The completion at notary, which requires all costs to be paid to carry out the sale. (10.2% fees for non-mortgage, from 14% with a mortgage to complete the sale). As an aside a Spanish will is strongly advised to protect the inheritance and wealth related taxes for you and your family.
What to look out for:
Complimentary tax is payable in some circumstances, however we can advise you before you make your decision whether it is likely for that to be an issue.
Essentials:
Having either a mortgage in place or cash to purchase the property and to pay the taxes.
To be able to provide evidence of where the funds will come from for money laundering regualtions.
Working with a very reputable team of Financial Advisors, we are delighted to be able to help our clients be considered for a mortgage and agree a “Mortgage in Principle” stage even before you set foot on terra firma. Just as in the UK except we work remotely. Fluent Finance Abroad our trusted partners are based in Spain, near to our offices but work independently. Our collaboration has enabled many happy clients to know what they can “actually’ afford alongside their deposits well before they invest time coming over to view and tour with us. It has helped us optimise the time the client spends with us so it’s just about the dream home, as all the background work has been completed beforehand.
That all important wish list:
This we have found to really be of huge benefit, if you know what you want and what’s essential or desirable, it makes our life so much easier.
Having said that keeping an open mind also helps, the sea views or golf course view are from our experience, the top of most of our clients list, along with having amenities within a 15 minute walk. So again in your planning, scheming and plotting, it would be great to hear your needs at the early stages when you make your enquiry to us. We will always contact you once you have made an initial request and our experts will do all they can to explain all the small elements to reasure you. You equally may have been linked to us for a while but not been in a position until now to progress; our philosophy is all about helping our clients at their right timing, to build a solid relationship and be a trusted part of this huge emotional and financial investment.
No question is too small or big. Our sister company Asesoria Castles can answer all tax and business related questions. Our Castles Estate Agency team are experts in your property purchase and anything you may need following that. Both as a team and as individuals, we have many years of experience between us. Lock changes, builders, insurances, schools, TV, the list goes on. Our family has been here for many, many years, so there’s not much we cannot find out with our contacts and trusted relationships nearby.
What’s next?
On a positive note this reflection time we have ALL recently embarked on gives us cause to decide on several points; timings to re-book those fights and come out again, or the holidays we had planned and when might happen…( as soon as the flights are functioning again), and we are able to travel and take time off work in order to get back to some kind of normality. We also need to manage our own expectations. Let’s face it, normal MAY not be the same clearly with all the recent events we have faced. There will be lots of adjustments some small, some more significant – be that to perhaps review what we now do with our free time, how we choose to spend our hard earned money, through to what we want our life to look like going forward. For us, that is now making sure that the important people in our world are more carefully considered.
The team at Castles Estate Agency are here to help you. From the seed of the idea through to realizing the dream, we would like to be on that journey with you and welcome you to the Castles family.