jueves, 24 de julio de 2014

Section IV - Purchaser Guide - I am The Owner, What next?

Each year apart from the electricity and water, you will be required to pay a local tax called IBI as well as the community fees relevant to the community of owners where the property is situated.

From the second year, you will be required to pay as well a tax to the Spanish government ("Renta y Patrimonio").

We suggest you take out an insurance policy to cover any possible damage, and as well a maintenance agency to look after the property and deal with the tax department on your behalf when you are abroad. You can obtain a good income renting out your property through a specialised agency.

Of course, enjoy your new property in Spain.

Section III -Purchaser Guide- The Spanish mortgage

In my point of view, one of the most important things to consider when we go to a bank to apply for a Spanish Mortgage  is the documentation that we have to present.

A mortgage file with a complete and current documentation, it can give us advantages to obtaining a mortgage loan:

  1. It's a signal to the bank that we are a diligent, informed and serious people.
  2. Helping the office staff to mount the risks file because it will facilitate your work and avoid wasting time.
For this reason, we have very clear documentation to submit, that is complete and current. Since many financial institutions asking for specific roles, first of all ask the bank what data you need.

General documentations to get a Spanish mortgage
  1. NIF or NIE The effect (documents of the person).
  2. Working life to date. You can order one by phone or online to Social Security.
  3. The three Declarations latest income tax.
  4. Banking Extract recent months. Not all banks ask for it
  5. Earnest money contract (if available) or the deed of sale and the mortgage (if we are to seek subrogation or debt consolidation).
  6. Receipt IBI (contribution).
  7. Scriptures or simple notes updated all properties that are available.
  8. Latter paid receipts of loans it.
  9. Rental and contract receipts past if we are currently living in a rented house.
  10. Proof of other income or costs.
The same documentation that is required for mortgage n the case of the guarantors. A guarantor is liable with all its present and future assets.

In addition to this general documentation.  There are several documents and informations that we request in any case, whatever our type of contract or employment or professional activity.

If You are employee,  since we have an employment relationship is that yields income each month, we asked:

      1. The employment contract in force. If we are not hired as permanent are they going to put a lot more problems than if we fixed.
      2.  3  latest payroll. We may ask for more payroll, at the discretion of each financial institution

If you are self-employed (freelancers)

If self-employed and will apply for a mortgage, you have to present a lot of documentation to prove the ability to generate revenue.  Among them include:
  1. Annual Summary VAT last year.
  2. Quarterly tax payments this year.
  3. Installments income tax year.
  4. Later receipts of payment of Social Security.
  5. It is advisable to have a dossier with information on our business, experience, best customers and the qualitative information that allows us to prove that we are experts in our business.
Documentation for Business companies

It is very unlikely to grant us a mortgage on behalf of the company without the owners or managers sign as guarantors.
  1. Among the documents submitted is:
  2. Corporation tax, if it is required to file.
  3. Balance annuals.
  4. Memorandum and other writings of the company.
Information about major customers, suppliers you have, its market´s position and other quantitative and qualitative data demonstrating the reliability and professionalism of the business.
Once we collected the information is something difficult to negotiate the terms of the mortgage.

(To be continued in section IV - I AM THE OWNER, WHAT NEXT?) 

Section II - PURCHASER Guide- Costs

As well as the price of the property, there are some professional expenses and taxes that you will have to pay. They are:
  • Notary fees: 
These don't have a fixed percentage but vary according to a property price scale. They are also affected by the number of pages of the document, but are usually between 0.3% and 0.6% of the value of the property.
  • Taxes:
When the property is new, you will be required to pay 8% V.A.T. and 0.5% of 'Actos juridicos documentados'. When it is a resale, the tax will be 6%.
  • Registry fees: 
These are also calculated according to a property price scale and the number of pages (not calculated by percentage), and are usually lower than the notary's fees.
  • Plusvalía :
This is a local tax calculated on the re-value of the land where the property is located, the base being the value of the land, the year when the vendor bought the property and the year of sale. The law states that the vendor has to pay this tax, but as a common practice, the purchaser pays it together with the other purchase expenses.
  • Advisor fees: 
Fees corresponding to the professional who will present and collect the 'Escritura' from the Land Registry Office, and who pays the plusvalía, ...
(To be continued Section III - The Spanish mortgage) 


Several informations about important points in buy a properties in Spain - Section I


The Spanish Property System is one of the quickest and most secure in Europe. In fact other governments are studying the Spanish System to learn from the benefits and guarantees that it offers. Like any property system, it is vital to follow each and every step with great care. It is highly recommended to employ the services to guide you through the various steps of your sale/purchase.


In Spain the project manager, real estate agents and Lopez develop have a prestigious reputation throughout Spain, having undergone rigorous tests to practice their profession, and are therefore well competent in looking after your interests as the vendor or purchaser of a real estate property. These groups also have their own lawyers, technical teams, informative literature, professional insurance, …
Look for us as a guarantee of quality and professionalism.


To reserve a property that you wish to buy, it is necessary to pay a deposit of the total price (between 10% to 20%). The vendor will then consider the property sold and will take it off the market with the obligation to respect the agreed price. If the deposit is not paid from the beginning, there is the risk of loosing the property because the vendor may sell it to a third party. It is usual, when the deposit is paid, to sign at this time a private purchase contract or to order the purchase to our representative (Real Estate advisor ) with a document called "Contrato de mandato de compra". Both documents define the price, the conditions of payment, dates and other specifications of the purchase.


These letters stand for 'Numero de Identificación para Extranjeros' (Foreigner Identity Number). You will obtain this document from the Ministerio del Interior via the Policía Nacional. You will have to fill in a form and present it together with your passport. This will take between three and four weeks to be issued. It is vital to apply for this document from the beginning because it will be required for all dealings with official entities, banks, etc.


At the time of the last payment of the private contract, you will be asked to sign, in front of a Public Notary, the document that recognises you as owner of the property you have bought. This document is called the "Escritura Publica de Compraventa" (Public Title deed), which states full details of the vendor and purchaser, exact description of the property, its 'linderos' (property boundaries), community fees related to the urbanisation where the property is located. It also states that the property is sold 'free of charges' and without any tenants, as well as other relevant details.


Any changes regarding the property are registered on this document including inheritance, donation, mortgage, debts, etc. For this reason this document is an up-to-date record regarding the current status of the property that you are buying. Even though in Spain it is not obligatory to register with the 'Registro de la Propiedad' (Land Registry Office) it is highly recommended.


Your Project manager, Real Estate Agency or Lopez Develop  will apply for a 'current status declaration' of the property that you want to buy from the "Registro de la Propiedad" (Land Registry Office) to check to see if there are any debts on the property ('Nota simple' or 'Informe Registral'). He/she will check the electricity bills, local taxes, and any relevant community details. On the day of the signing in the presence of the Notary, a certificate stating that the property is 'free of charges' will be supplied. On his/her part, the Notary will apply to the Registro de la Propiedad (Land Registry Office) for the information relative to the property. This is to double-check and guarantee the rights of the purchaser.


If the vendor is a foreigner (i.e.a non-resident), and bought the property before December 1986, the equivalent of 3% of the value of the purchase price will be retained and given to the Hacienda Publica Española to guarantee the payment of any possible pending taxes from the vendor. It will be necessary to present a form called "211" If the vendor is a foreigner but has got a residence card, this retention will not be practised.

TO BE CONTINUE...  (section II - Costs)