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Buying Investment Property Spain
Spain properties are sold to foreign investors each year. The choice of Spain to invest in property can be associated with various reasons. Primarily the place has an appealing climate. Reaching Spain is cheap and quick.
You have a wide selection of investment property in Spain. Consider the following factors while searching for property to invest in Spain. Check the size of the property, the number of rooms required. Always check the nearest health and social facilities available.
Developers in Spain are always looking for cash flow and hence offer property at sale prices. The plan is that you will need to deposit some initial amount and the rest can be arranged in stage payments. You can use this plan to your profit. Say the price of property rise before the completion of a project, you have a property worth more than you have paid for. You can also have your choice and say in the development of the exterior and interior of your house. The only concern is that you need to wait for a period of time before you get the property and you only get to know what you are got after the completion.
The cheapest property available is likely to be an apartment located in small communities and will probably be available in an unfinished state. These of course do not allow much privacy.
A detached villa should be your choice if you are seeking seclusion, but will come at more prices. If you are looking for Spanish experience you should be looking at town or village properties.
A Finca is a rural property, especially a large farm or ranch. Many fincas have a good deal of land and this may have fruit orchards or olive groves.
Once you have made a decision on the location and type of property to invest, you should now talk to the estate agent. Check whether the person concerned is registered and has a license. Please verify all claims made by the agents independently.
Any offers you make to invest in property should be made in writing and should contain the price, the payment plan and the currency. The completion date should be mentioned, taxation issues and details of what is included within the price you pay and what is not. It is done best if you do it with the help of a solicitor. Do not sign any documents in the absence of your solicitor.
When the offer is accepted, the solicitor generally checks the land registry and then goes on to make a contract deal including both parties. The public deeds (Escritura de Compraventa) are then signed before a Spanish notary. On completion the solicitor informs the local land register about the deed and the identity of the new owner is registered and ensure that the property cannot be sold a second time.
There are charges, which are required to be paid such as community fees, electricity, real estate tax, rubbish collection charges and water. The estate agent should be able to provide this information.
A mortgage application in Spain is relatively straightforward. The following original documents need to be shown, passport, if employed, the last three months payslips and if self employed, accounts of the last 3 years, an accountant's reference, and tax returns.
A further 10% of the agreed price will have to be found to cover additional fees that include: Legal fees of approximately 1%, Notary and Land Registry Fees of approximately 1%, Title Deed Tax of 0.5%. A Valia tax, payable on any increase in land value may be payable. On a new construction IVA tax is levied at 7%. It is charged at the full rate of 16% for purchases of land. Purchases of used property are subject to a transfer tax and this like the IVA comes in at 7%.
So these are the brief details, which you should be aware of before buying investment property in Spain.
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