This page attempts to list and respond to questions that many clients ask us.
Over the last three years interviewing and consulting with many clients, naturally the same questions, concerns and considerations appear in the course of our conversations. In an attempt to give clientele a better background to, and a more rounded experience of, the purchasing and selling cycle Olvera Properties provides this page. Please note that the Spanish Government issue decrees on a regular basis - any one of which may alter the answer to one or more question in the future - we do our best to keep up with and modifications to the law as they occur.
The answers we give here come from our experiences so is not considered as legal advice. Olvera Properties recommends such legal advice be sought, in any event, from a solicitor with local knowledge. The responses here, are, to the best of our knowledge, correct at the time of publishing. Of course, ultimately, this is a client driven page and if your question is a typical one and it isn't here today - it will be tomorrow.
There are a number of things that have to be put in place prior to the exchange of contracts. To facilitate the process it is a good idea to understand what is required of all parties and what to expect.
Is there anything I can do before I arrive in Spain?
Email us your wish-list, budget and any properties on our web site that interest you.
Open a local bank account, which is a very simple process here. This is covered in the section entitled Do I need to have a Spanish bank account?
Let us know early on if you require a mortgage or other financial advice. If you need a mortgage please read the section below entitled Can I get a Spanish mortgage?
Organise your accommodation. There is available here in Olvera and in Pruna a selection of hotels, guest houses and self-catering accommodation.
What documents do I need?
To purchase a property in Andalucia you will need:
An NIE: This "Numero Identificacion Estrañero" has to be solicited through the National Police in charge of Foreign Affairs. You will need an NIE to conduct a number of transactions ranging from purchasing a car to acquiring a place in school for a child. This is an easy process that we can organise while you are visiting Olvera.
If you plan not to be present while the exchange occurs at the notary you will need to grant a Power of Attorney (PoA) to either a lawyer or someone that you trust. This document can be made specifically for this one transaction.
You will have to open a bank account in Spain, if you do not already have one, which requires a passport or NIE.
Do I need a lawyer?
In short - "Yes": You do not legally have to have a lawyer but we always strongly advise our clients to use a local lawyer.
On your behalf your lawyer will check the paper work and ensure that there are no debts on the property.
Property transactions here in Andalucia are notably different from those performed in the UK and in our experience UK based lawyers often expect documentation that is nonexistent here.
By the same token, coastal based lawyers from Malaga and Marbella for instance, have different expectations to the reality of dealing in a small inland pueblo. On the Costa del Sol, where property sales with foreigners have been established over the last 40 years and the house is often recently built, it is usual for the house to possesses a full linage of ownership documents. By contrast, in small inland pueblo blanco houses have often been in a family for generations and all the transactions have previously been through private contract.
Do I need a surveyor?
In Spain it is not a legal requirement to employ a structural surveyor, however we advise everyone to use one. This is always useful, in as much as you will have a checklist of items requiring attention and you won't have some unexpected surprise six months after you buy the property.
If you require a mortgage on your home in Spain, the bank can provide a copy of their values' survey of the house, therefore saving you the cost of employing a separate surveyor yourself.
We have a list of professionals who can help.
Do I need to have a Spanish bank account?
A local bank account is necessary. You will need to pay utility bills in Olvera once you have a property, which you can arrange to be handled by direct debit. It is simple to set up internet banking allowing you to check on your accounts when overseas.
If you want a Spanish based mortgage, a local bank is often a must.
Olvera Properties has a list of local banks and can help you obtain a bank account.
Can I get a Spanish mortgage?
Mortgages are available for non-Spanish residents.
The banks here are, like banks around the world, all trying to establish new rules for mortgages - in effect this means that more paperwork is required now and overall, mortgages tend to be smaller. For a mortgage in Olvera the banks here will require:
•a letter from your bank including your account details in the UK
•bank account movement for the last 6 months
•a letter from your work including your start of employment date
•your work contract
•your pay slips for up to the last 6 months
•proof, with dates, of any pensions paid over the last 6 months
•any rent or mortgage payments covering the last 6 months
•any proof of residence in the UK - a letter from the town hall
•proof of non Spanish residency - document from Policia Nacional
•your P60
•a bank account with the bank that is supplying the mortgage.
•your NIE
Nowadays you can only expect 60% to 70% of the purchase price, whereas residents can expect between 80% to 100%. If you are buying a house that already has a mortgage you can get it transfered into your name but the bank will require all the normal paperwork (above) prior to going to the notary.
You can either obtain a mortgage locally or by using a mortgage broker. Olvera Properties will of course assist you throughout the process of obtaining a mortgage. See the section "Are there any hidden costs" for more details.
Of course you can find mortgages in the UK for your home here but there are some considerations that you need to think over including the interest rate, the exchange rate and the possibility of needing to transfer the mortgage if you wish to sell the property at some future date.
How long does it take to buy a house in Olvera?
Of course this depends: while our fastest sale in Olvera Properties was accomplished within one week, the average time is more like a month. Often what this depends upon is ensuring that the money is in Spain and available for the purchase and having your NIE ready.
Cash sales are quickest generally while mortgages can take up to 6 weeks from start to finish and is dependant on having all the paperwork sent early on.
What kind of a deposit do I have to put down to secure the house I wish to purchase?
It is a good idea to secure the property you wish to buy, with a deposit, which in Spain the seller receives.
In some cases, if you are unable to complete within 4-6 weeks we advise that up to 10% is deposited otherwise around a thousand euros is sufficient.
The deposit is non-refundable, and should the vendor refuse to sell the property, for any reason, a return of double the deposit is regarded as law.
This is normal procedure in Andalucia.
Is this a good investment?
Olvera Properties cannot answer that question for you: What we can say is that to date we have watched the house prices rise in Olvera faster than almost anywhere else in Spain. While the coastal regions have reached a "maturity" plateau, inland prices have continued to realise a good return in investment.
During the current downturn in property prices, it has to be said that the costal prices have fallen (by up to 20% in some cases) and due to the overbuilding there, there is a vast surplus of housing within Spain. Olvera has suffered this downturn less than other towns in the Cadiz province because its beauty has only recently been discovered. House prices here are still well below the average for Cadiz, Malaga and Sevilla regions.
How does buying rural property differ from buying town houses?
There are some distinct differences. Firstly there is rural land and then there is park land. If there is no house on either classification of land then it is not possible to build one without a license to do so, which in our experience is almost impossible to obtain, unless the land is over 25 hectares. An "almucen" or store may be legal, but do not think that once the store has been built that it can be made into a home, because a "license of habitation" is required for the building. This license ("permiso de habitacion") can only be granted with full documentation of the building process. Even if such a building was to be inhabited, it may prove impossible to re-sell .due to the lack of paperwork.
Park land is even more restrictive as any work licence requires the authorization of not only the town hall, but also of the park authority as well as the provincial architect's signature. Even restoration work on a building with good paperwork is problematic and the outcome is not predictable. Selling land within the park requires that the sale is first offered to the park, which is a three month wait while the authority concerned gets its act together to turn down the offer.
You may find an attitude in inland Andalucia that is "devil-may-care", but be warned - the devil is having the last laugh in southern Spain as property developers, banks, politicians and lawyers are finding out.
Do not become a casualty of this cleaning up process.
How do I transfer money?
As you may be transferring a large amount of money and the rates that most high street banks charge for this service can be very large, we can recommend the services of Curriencies Direct, which do the same service for less commission and often faster and more professionally than a bank.
Please do not even consider traveling with large quantities of cash which can be confiscated by some random customs check.
What is expected of me at the notary's?
Once at the notary's office: you will be taken through the contract which will be read in Spanish, so it is advisable to have a translator present. Your lawyer will also be there to make sure that you have your interests looked after. By this time all the required paperwork has been lodged at the notary's in order to repair the sale deed (escritura). The notary is a government official witness to the exchange of the contract.
Is there an equivalent of "rates"?
IBI: "Impuestos Bienes Inmuebles" or "contribución" is about 1% of the value that the government place on the property per year. Thus, as a rough guide, a house with a value of 100,000 euros is taxed annually at under 100 euros a year.
Recently the town hall has been re-evaluating the worth of property and as a consequence, sometimes, they will give a once-off "adjustment" to the initial evaluation.
How much are the yearly outgoings?
Much less than in the UK generally: The main expenses are the rubbish ("basura"), electricity, water and IBI. Thus the utility bills for a 100,000 euro house with a family of four can expect to pay:
•rubbish -65 euros a year
•electric - 30 euros a month
•water - 15 euros a month
•IBI (council tax) - 1% of the value of the property
•phone - depending on your provider
We suggest "Voip" or some other company than Telefonica for your telephone needs. British Telephone (BT) has a vast share in Telephonica and the company runs along similar lines to those that BT did in the late 70´s, which could be considered extortionate.
Is the property free of debts?
Yes: The lawyer and notary will not let you purchase a property without all the debts being fully paid off. For instance the vendors have to bring fully paid utility bills to the notary on the day of purchase.
It is your lawyers responsibility to ensure that all bills against the property have been paid prior to reaching the notary's office. If the property has a mortgage on it then at the point of sale a bank representative will either transfer it to your name or the balance owed by the vendor will be paid in full to the bank in front of the notary.
Are there any hidden costs?
Olvera Properties works very hard to ensure that there are no surprises for our clients. The price you see on the web site listings is the price you pay. Of course there are commissions - these are built into the price of the property unless otherwise agreed, which is agreed by the vendor and amount to about 5% of the total price for properties over 100,000€.
Some estate agents "take" 3% from the vendor and 3% from the purchaser, which is fairly standard practice in Andalucia and southern Spain generally.
Other costs include:
•Lawyers fee for property transaction: about 1,000€
•Notary fee for property transaction: about 1,000€
•Bank mortgage transaction fees: 1% of the mortgage
•Olvera Properties mortgage fees: 1% of the mortgage*
Changeover of services (water, electricity) is about 100€ but this cost depends upon who you get to do the job.
* Should you wish to use our services to negotiate mortgage in Olvera
How do I get the water and electricity in my name?
We can assist you in the transfer of utilities into your name. We have a list of people who will act as translators and home care who can help facilitate the process.
When do I get my deeds?
You receive a copy of the deeds when you leave the Notary's office: The full registered title deeds will arrive at your lawyer's office, or in some cases at your bank, within three to four months and they will inform you.
What architects, builder's, home care can you recommend?
We have a list of merchants and professionals, which is as impartial as possible. We recommend that you get more than one estimate before you embark on any project.
Olvera Properties does not do any home care or project management (because we focus only on providing the best service we can, doing what we do), however, we can give you some general guidelines as to how to proceed with the next step you want to take.
Should I become a resident of Spain?
Becoming a resident has some implications:
•You have the ability to get an 80% mortgage for instance
•You will need to make a local will
•You will need to negotiate the local IRS (hacienda)
•Social security also becomes a local issue
•You will need to register with the health services
If you intend to spend more than half of any year living here then by law you have to declare yourself a resident for the period of time that you are domicile here. At this point it is probably a good idea to hire an accountant as well as talking your intentions over with a lawyer.
Do I need to insure my property?
Again, the short answer is "Yes". There are a number of local companies who are knowledgeable about the kinds of insurance you need.
Your local bank will be happy to act as an insurance broker and will charge around 250 euros per year for a house of about 100m2.
|
