Property for sale in Spain

Do I need to speak Spanish?

Life is easier if you can speak some Spanish! Many learn a few words prior to moving and then continue lessons in Spain. Locals will always be more helpful and appreciative if you make the effort to attempt some Spanish. Happily, Spanish is considered a relatively easy language to learn and you'll be surprised how quickly you pick it up and how many words are similar!

How much Tax do I have to pay, if I sell my house?

From 1st january 2007 the capital gains tax for property sales by non-residents in Spain pay a tax of 18%, not 35% as earlier up until 31-12-2006 the percentage to apply to the capital gain was 35%, but with the new law the percentage as from 01 January 2007 has been considerably reduced and is now 18%. This change was expected, because for people who are residents this is also the percentage (18%), and it was considered discriminatory that non-resident persons should have such a high percentage.

This change has been made in compliance with European non-discrimination regulations, and the result is equal conditions for residents and non-residents in the matter of capital gains tax. Making a capital gain as a result of selling a property constitutes taxable income. Generally, the capital gain will be determined by the difference between the selling price and the price originally paid for the property.

Can we take our pets with us?

Yes, and under the UK's new pet passport scheme, they can return to the UK without going into quarantine. To qualify for a passport, your pet will need to be 'identichipped' and have certain innoculations. You should speak to your vet for more advice.

Can we get English TV in Spain?

English programmes are available via satellite services such as Sky. English newspapers are printed daily on the Spanish mainland and available from local stores in the mornings. For sports fans most events, including English football, are available

Can I use my UK driving licence in Spain?

Yes, although if you are a going to become a Spanish resident you will have to apply for a Spanish driving licence.

Do I need to take out Spanish car insurance?

UK car insurance tends to be more comprehensive and can cover you in Spain, however check this directly with your own insurance company.

Do I need a Spanish bank account?

You will need a Euro account for utility companies to collect payments for water, electricity, etc. This works very much like the UK's direct debit arrangement.

How does Spain's transport compare to the UK?

Very well indeed! The Spanish government have invested vast sums of money in both the road network and public transport infrastructure. Buses and trains generally run on time and are a clean, economic and convenient method of getting about.

How cold does the climate get in winter on the Costa Blanca?

The typical Spanish winter day is comparable to a gentle Spring or Autumn day in the UK - very pleasant for anyone who has had enough of British winters!

Do we need medical vacinations to live in Spain?

No. Remember...Spain is about as healthy an environment as it is possible to find.

Are the public holidays the same as the UK?

Spain has more public holidays than the UK. Some occur at similar times, like Easter and Christmas, but it is worth making a note of them - especially if you are planning to do business in Spain.

What are the shop opening hours?

Generally speaking, shops are open between 10am and 2pm and again between 5pm and 8pm - Monday to Friday. Supermarkets tend to be open all day. On Saturdays most of the smaller shops are closed in the afternoon.

Does the Spanish Social Security system extend to foreigners resident in Spain?

Yes, anyone can receive medical care, although to receive Social Security benefits (pension, disability benefit etc) it will be necessary to pay Social Security contributions.

Do I need a Spanish Will?

Making a Will may not be at the top of your list of priorities. You may see it as unnecessary, morbid and something that can be put off. However, if you want any control over the way in which your assets are distributed when you die, it is crucial that you make a Will today. Two out of every three people die without leaving a will, and the rules laid down by the government (the intestacy rules) dictate how your assets will be distributed when you die.

You may be surprised at how inexpensive, quick and easy making a Will can be. Instructing us to make a Will on your behalf can provide peace of mind and security, not only for the person making the Will, but also for the whole family. On the other hand, if no Will has been made by the time someone dies, it is often distressing and confusing for the people who are left behind. Relatives or friends who may be expecting to benefit from your Will may not be entitled to a share; the family home may need to be sold and, if you were in an unmarried relationship, y

our partner will not be entitled to anything under the rules laid down by the State. We can advise you in relation to tax, probate and the formalities which need to be taken into account when preparing or administering a Will.

What Community Charges will I have to pay?

This varies with the communal services and facilities provided on site, this figure can be between 30-120 euros p.m. Basura, (waste collection) around 150-200 euros per year.

Am I liable for Wealth Tax (Patrimonio)

A sliding scale according to your total holdings in Spain. For most properties in this area, between 0.3-0.5% of the declared value.

What is Catastral Value?

Similar to the old Rateable Value in the UK, set by the Town Hall, around 18 months after completion. Usually set at 40-50% of the purchase price. It is the basis for taxation, not tax itself.

Income Tax?

The Town Hall assumes that non-residents will earn 2% of the Catastral Value* from renting their property out and charge 25% tax on this amount. Different rates apply for residents.

Completion – how does this work?

This takes place in the notary, property deeds are signed, final payments are made to the vendor, the possession of the property now becomes of the buyer and the keys are handed over.

What is an N.I.E.?

To apply for and obtain a fiscal number is a straight forward process that both, the real estate office or the lawyers will assist you in. If you have not already acquired a fiscal number you will need to, as it is a mandatory procedure for both purchasing almost everything in Spain as well as to obtaining mortgages.

Exchange of Contacts – when does this take place?

Once the lawyer has completed all the relevant checks and investigations regarding outstanding debts, planning permission, bank guarantees and building licenses the next step is to exchange private purchase contract or sign an option to purchase. The private purchase contract will include the stated sale price, the details of payments to be made by which dates and to state the date of completion. At this stage of the purchase you will be required to pay the deposits normally less the reservation deposit but terms may vary from property to property.

When do I make a Formal Offer?

Now that the purchase terms have been negotiated it is normal to formalise the offer in writing, this is given at the same time as the reservation deposits. All deposits are made through your lawyer and the monies to be held in an escrow account, a trusted account to protect your interests until the exchange of contracts or the completion of the property.

What do I need to do prior to viewing?

Before planning your visit or viewing trip to Spain it’s important to analysis your financial situation, making sure you have enough funds at your disposal for the reservation deposits. Normally required is the sum of 3000 euros, but this figure can vary up to 6000 euros for certain developments. Deposits made to your lawyer, normally within 21 days of the reservation deposit can vary between 10% on resale properties, to 15%-50% for off-plan developments depending on the terms of the constructor.

Reservation deposits to be normally paid by either credit card or cash, the deposits depending on how you choose to fund the project. Without this planning prior to your viewings, could result in you losing the perfect property to someone more prepared.

What is Equity Release?

Equity release, an ever more popular way in releasing funds for deposits, should be a decision made very carefully. It is a way of releasing money from your existing properties hence spreading your investments to increase your portfolio, seek professional advice first as having equity in property does not always mean that it will be available to use. Other means, savings/investments, friends/ family or simply downsizing could be more suitable for your financial situation.

What are the Purchase Terms?

Once you have found your prefect property, its time to negotiate the terms and conditions of purchase. Some of the issues to be discussed are: payment terms, handover dates or even, sale subject to mortgage. It is advisable to seek legal representation in these maters so both parties are clear in the proceedings, to protect all parties in these negotiations and for a smooth transfer in the time of completion.

Should I have Legal Representation?

We recommend that you use a local lawyer, as you would not dream of using a Spanish lawyer for purchasing a property in the UK. The lawyers work independently and are there to protect your interests. Debts are transferred with property and not with individuals in Spain, payments of property taxes, community charges, embargos charges are some of the many searches that the lawyers will perform for you, before the property is transferred into your name.