Do I need a solicitor?
It is not mandatory to contract a legal adviser or solicitor, but it is highly recommendable. When you have found the right property for you, you need to make sure you engage the right help to check it out. Your choice of solicitor is an important step in the process of buying a house in Spain and they must look after your interests.
Your solicitor should:
- be able to communicate easily with you – make sure they speak your native language well
- be accessible – if you are still abroad during the purchasing process how will you communicate? ?
- have a good reputation – always try and make sure that you speak to someone who has used them before
- have been established for a while – you want to be assured that your solicitor has the experience and is trustworthy
What is the NIE Number?
The first requirement that starts the process of buying a property in Spain is to get your NIE number. Your Número de Identificación de Extranjeros is what you will need to be registered with the Spanish Tax Authorities.
What is a Power of Attorney?
A power of attorney or ‘Poder Notarial’ is a written authorisation that allows someone you trust to represent you in legal matters or transactions. It has many uses including obtaining an NIE and enabling transactions during the inheritance process. If you are considering buying a property in Spain then the power of attorney can make the whole process much easier, whatever your travel plans.
Who is the Notary Public?
The notary is a professional within the Spanish law system and his/ her main function is to certify Spanish documents ensuring that private agreements fulfil certain legal criteria. The Spanish notary is involved in legalising agreements and contracts and uses a stamp and signature to endorse them.
The main difference between a Lawyer and a Notary is that the Lawyer deals with private documents such as contracts and might represent a client, for example in a law-suit. A notary, on the other hand, brings a document into the public domain.
The notary has a strict code to abide by and the Law for Notaries defines his function and the extent of his or her authority. The notary is qualified to a very high level and must pass some very strict exams to achieve this status. They must study initially for five years at University to obtain their lawyers’ degree. They then pass an additional competitive examination which requires, on average, another three to five years of preparation.
The sale contract of a property can only be registered in the Property Register through the Public Deed signed and certified before Notary Public.
What taxes and costs are involved when purchasing a property in Spain?
To ensure that your purchase is problem free in the future, there are a number of legal and tax obligations that you must meet.
These can be divided into:
- External costs
- • Legal fees for the purchasing process
The largest external costs are for the Spanish Notary and the Spanish Land Registry
The scale of Notary charges is fixed by law and the actual amount to be paid will depend on the extent of the legal provisions of the Title Deed. As a guide we would say that charges normally start at 800 Euros.
The Spanish Land Registry (Registro de la Propiedad) is an official registry that protects the rights of the owners of a Spanish property. The title deed must be inscribed in the local land registry. The fee depends on the value of the property but normally starts at 400 Euros.
There are other additional expenses that apply in some cases depending upon individual circumstances. For example, if you have never had a fiscal interest in Spain before, you will need an NIE number before you can open a bank account or purchase your property.
You will also need a power of attorney if you are unable to be here in person and need to appoint an adviser you trust in Spain to act on your behalf.
In addition to the external expenses there are also taxes to take into consideration when estimating the cost of buying property in Spain. The taxes are dependent on whether the property is new or resale.
|PROPERTY TAX TABLE|
|Type of property||Tax payable|
|New build||IVA (VAT) 10% Stamp duty (AJD) 1.5%* Valencia Region|
|Resale||ITP (transfer tax) 10%* Valencia Region|
Legal fees for the purchasing process
Finally, you will need to build the legal fees into the cost of buying property in Spain. It is important that you ensure that your interests are represented throughout.
An independent lawyer will give you advice and the reassurance that legalities are checked on your behalf during the buying process. Make sure that whoever you entrust with this very important transaction places your needs first and does not have a conflict of interests with other parties.
Can I get a mortgage in Spain?
If you have savings and can afford approximately 40 % of the purchase price plus external costs and taxes, you have sufficient income, a stable job and a good credit record most Spanish banks wll be able to borrow up to 60 % in some cases for good clients even 70 %.