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Mortgages in Spain:
When purchasing a property in Spain an obvious consideration is a Spanish mortgage. This is very common, in fact more so than mortgaging through a bank in the country of domicile. Spanish mortgages can be facilitated quite easily and quickly while in Spain but a number of documents must be furnished to the Spanish bank in order to accommodate a smooth transaction. Please note that originals of everything will need to be shown and copies will be taken at the bank.
These documents include the following: - Passports.
- Driving licenses.
- If Employed: last three months payslips and your latest P-60’s.
- If Self Employed: last three years audited accounts, tax returns and accountants reference.
Mortgages may be taken out for up to 70 % of the property value and in special circumstances this could be higher The normal term of loans in Spain is anything up to 20 years. Charges for the basic legal work involved in the purchase of a property, which has already been constructed, are typically 1.0% of the price of the property subject to a minimum charge of €750.00.
For most property purchases, you should allow approximately 10 % of the price of the property to cover purchase taxes, legal fees and disbursements. Breakdown of these expenses could typically be as follows: - IVA (VAT) Transfer Tax (Stamp Duty) 7.00 %.
- Legal Fees (approximate) 1.00 %.
- Land Registry Fees 0.75 %.
- Notary Fees 1.00 %.
Initial steps to purchase:
When you have found the property you wish to purchase, it will be necessary to make a deposit with the developer (new builds) or your lawyer (resale) to hold the property. You have heard this amounts to 10 % of the purchase price. However, a deposit of €3000 will normally suffice at this time.
Deposits can vary according to conditions of the contract. If you carry a sterling chequebook a cheque can easily be signed over to the lawyer / developer at this time.You will also be signing an initial contract showing receipt of the deposit, the details of the property you are buying, payment schedule and the anticipated completion date.
Since further transactions will be necessary a Power of Attorney may be granted to your attorney so these transactions can be completed in your absence.There is no gazumping in Spain,the deposit and the initial contract creates a binding agreement between buyer and seller. | |
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