Prior to completion non-Spanish buyers will need a Spanish NIE (tax identification number) and a Spanish bank account:
The first step when you find a property that you want to buy is formulating an offer and putting down a good faith deposit. This deposit is normally held by the lawyer and the amount varies depending on the property price as well as other factors. Your Sales Agent can advise you of the exact amount, based on the property of interest.
If your formal offer is accepted a property reservation contract will be sent to the vendor and to the buyer for signing and the property is taken off the market. This is a simple agreement between the Buyer and the Seller in which the Seller agrees to sell the property and the Buyer agrees to buy the property at the price agreed and it will contain all the relevant details such as a description of the property, the payment structure and the completion date. The reservation fee is non-refundable, however it is subject to legal searches, therefore if any property searches were to produce any anomalies (issues with the property or its paper work) a full refund would be available (as per the terms and conditions of the reservation contract).
Once you get to this point we would highly recommend to instruct a law firm to represent you in the purchase. If you do not have a lawyer for your property we will be happy to recommend one to you, as we have experience with many good law firms and can advise accordingly. It is not obligatory by law to seek legal assistance for a property purchase but it is strongly recommended to do so. The fees can vary due to the amount of work required by the solicitor.
Purchasing a property in Spain involves the payment of different taxes, whether the property is newly built, or the property has already been owned by another person, a resale.
From the moment you pay your reservation deposit our team will be holding your hand. We will explain the buying process to you step by step. Even before you travel home we will have helped you to open a suitable bank account, find a good reputable legal service and arranged for all of the necessary paperwork required to allow your purchase to proceed quickly and smoothly. Our team will then be in contact regularly, to keep you informed of the progress and work with you to plan your first visit to your new home following completion.
We will be here to welcome you into your new home and will help you make it your own. Sunny Fincas has a list of the best tradesmen in the area, all of whom are fully legal and Registered Companies with insurance and guarantees, where necessary. We have excellent relationships with builders, furniture stores, air conditioning companies and satellite television companies. We can also assist in arranging insurance and even alarm fitting for your new home. No task is too small or large, we are here to help. We will ensure your dream of a life in Spain is achieved.
Once you have signed the mortgage offer, the notary and the bank will contact you to set up the date of completion. This process usually takes 2-3 days. If further documentation is required, it can take up to a week or even more if the involved parties don’t provide the requested documents. In total the whole process normally takes between 2-3 weeks to finalize.
In order for the bank to approve you for a mortgage, they look primarily at two factors: loan to value and debt to income.
Loan To Value (LTV)
For Spanish residents, banks usually offer to lend 80% of the purchase price (excluding fees). There exists an option to get up to a 100% by purchasing a repossessed property through the bank. For Non residents, the maximum loan to value banks offer at the moment is 70% of the purchase price. The percentage can vary depending on the country in which you reside/declare your taxes and your mortgage preferences.
Debt To Income (DTI)
One of the most important elements when applying for a mortgage in Spain is INCOME and DEBT. The relation between these two is important as it gives the bank information on how much you are able to pay per month for a mortgage. The bank will only allow your total debt to represent a certain percentage of your gross income. The percentage will vary on a case to case basis but for residents the banks will usually accept a DTI of 30-35% (up to 40% in special cases). For non-residents the accepted DTI is set to 25-30%, depending on the LTV.
For the seller, we offer a free, no obligation valuation of their home and the most up-to-date and professional marketing approach. We reach out to both local and international sellers through our campaigns and our long established and trusted network. Our dedicated sales representatives are always there in person when showing and viewing our listed properties. We are continuously working hard to be in the top positions on Google search and are proud to be there. This helps immensely to sell your property effectively.
When selling a property in Spain you need to be aware of the payment of various taxes and fees.
Energy Certificate: this certificate (CEE) is issued by an architect or technical house engineer. It will vary depending on the square meters of your house but expect something between 100 and 500€.
In order to proceed with the sale of your property, both your lawyer and your estate agent will need to be given a series of documents:
Having your documentation in order will help things run faster and more smoothly.
It is not mandatory by Spanish law to seek legal assistance for a property sale but it is strongly recommended to do so. The fees vary due to the complexity and value of the sale and the amount of work required by the solicitor.
Regardless of whether the owner will be able to attend the signing of the deed at the notary’s office, it is highly recommendable to grant a power of attorney for sale and tax representation in the lawyer’s favour. This document will authorise the lawyer to carry out a large number of procedures on your behalf, such as cancelling and transferring utilities contracts, cancelling direct debits, cancelling insurance policies, notifying the Town Hall and the community of property owners of the conveyance, processing the cancellation of your mortgage at the Register, submitting your tax statements, and requesting any return for which you may be eligible.
Although it is the obligation of the new owner to change all utilities into their names, it is advisable to stop the direct debits from your bank in order to ensure that nothing is charged on your account that is not your responsibility.
You may want to cancel your insurance policy in relation to the property. You may be entitled to a refund, depending on the specific terms in your policy.
You may want to close your Spanish bank account – although, even if they are selling their only property in Spain, some people keep the account open and use it when visiting Spain.