Financial Advisors in Spain

A smooth purchase

We are well places to help with all aspects of a purchase.

For most people, the purchase of a home in Spain, whether for permanent residence or for holidays and investment, the attraction of the country is very obvious.

Climate, affordability, access from Northern Europe and of course the warmth of our Spanish hosts.

The house buying process in Spain is relatively easy. For first time buyers in Spain or abroad, the key to a smooth purchase is the advice from experienced companies or individuals.

The initial steps;

Once you have found the property you have set your heart on and you are ready to commit to purchase, you will be expected to pay a holding deposit of €3000 to €4000.

This will remove property from the market and fix the agreed price.

It is essential that the holding reservation is refundable should there be any encumbrances found on the property.

The best course of action is to have a lawyer appointed before the most suitable property is located, then you will be ready to go and not miss out on the house you really want.

Without a reservation being paid, the seller has no obligations to sell to you at any given price and so leave a deposit when you are sure you want to proceed.

If the sale is “off plan” as a new built site, then stage payments will likely be required. Ensure you have enough available capital as a mortgage is very difficult to find for land or incomplete buildings.

Signing of the Deed (Escritura)

As distinct from property purchase in the UK, all property transactions are conducted before a Notary

The Notary checks and witnesses the signatures of the relevant parties.
The Notary will also check the legal papers and seek to ensure a non-Spanish speaker understands what they are signing. For this purpose it is essential someone acts for a non-Spanish speaker in this capacity, usually, the lawyer or associate.

At this stage, checks are made to ensure the relevant taxes and community charges are paid and up to date.

After signing, the title deeds are sent to the Land Registry where they are registered.

The costs of buying in Spain should be estimated at around 10% to 12%% given the arrangement of land registry, Notary, mortgage fee if applicable, and of course purchase tax.

Each buyer needs to ensure they have a fiscal number (NIE number).
This is the identification by which the Spanish state allocates wealth and assets to individuals.

For example, we need an NIE number to purchase a house, or a car. This can be a lengthy, though inexpensive process if done individually.
In our experience, it is best left to experts and Spanish speakers to arrange on your behalf and should cost no more than €100 per person. This number stays with you for life.

Taxation;

Covered in more detail in the “taxation” information pages, may be summarised as follows:
Sadly, taxation is as certain as night follows day, we are able to effectively reduce the amount we pay by careful planning.

When a Spanish property is bought, it is unsurprising that a contribution is required to local schools, police, and community in a form of council tax commonly referred to as “SUMA”.
The local taxes are considerably less than those of the UK.

Additionally capital gains tax is imposed on disposal for a gain…..of course, Inheritance Tax on death.

It is therefore sensible to employ a local fiscal representative to handle your affairs, and essential if a resident. 

Ask us for information about fiscal representation.

Spanish Wills;

It is essential to make a Spanish Will to dispose effectively of assets in Spain.
Spanish Inheritance Tax rules are complicated and having a Will eases the process for beneficiaries on death.

A Will relating to Spanish assets only should not cost more than €170 each person unless financial affairs are complex.

Mortgages;

We are able to arrange mortgages up to 80% for residents and non-residents alike.
Rather than UK equity release, this creates a debt on the Spanish property which may be valuable in the event of untimely death as it reduces the value of a deceased’s Spanish estate for Inheritance Tax purposes.

A mortgage may therefore be used to reduce taxation.

Resident status;

Legally, any foreigner should be able to stay in Spain for up to 90 days as a tourist. There is a debate as to the validity of this Spanish legislation as the EU permits free movement of it’s people between states.

However, should you intend to stay longer, a “Residencia” permit should be obtained via your gestor or lawyer.

Important note;

We have tried to give important but basic guidance in these notes.
No action should be taken or these notes relied upon as a substitute for personal financial or legal advice.

We take no responsibility for the guidance and information given herein as the preceding notes are for information purpose only, and not intended as a substitute for professional advice.