Financial

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We offer you the most valuable guidance in order to make buying your house easy and simple.  It may be that some of the steps involved in buying property are different in Spain than in your country. That is why we have produced this practical guide for foreign buyers. Here you will find a point by point description of all you need to know when choosing a house or a mortgage in Spain. If your dream is to own a house in Spain, we can help you to achieve it. Everything you need to know before buying your house! Before purchasing a house, it is very important that you check the following legal points: Is it free of all debts and charges? You should ensure that for the house you wish to buy: · there are no outstanding tax or other fee payments pending; · all other financial obligations such as mortgages, leasehold payments, court orders, etc. have been paid. You can obtain this information from the local Land Registry (Registro de la Propiedad), or if you wish, Your bank will obtain it for you. For used properties it is also a good idea to check with the representative of the Owners' Association that payments to the Association are up to date. Is it affected by the Local Plan?

Town Planning regulations affect the development of specific areas. It is important to familiarise yourself with them, especially if you are thinking of buying a detached property outside the urban centre. If you wish, your bank can help you to find out the situation of the property that you wish to buy within the local plan, through a firm of professional valuers.

Step by step
What are the steps involved in finalising your house purchase

The following two stages often precede the final house purchase: The pledge (Las arras) The pledge is a sum of money which is considered a deposit or downpayment on the property. It is a small percentage of the total price, which the buyer hands over to the vendor and it normally acts as a guarantee that the sale of the property will be completed within a given period of time. If after this period has expired you decide not to buy, you will lose the sum you have laid down (guarantee subject to penalty). If, however, the vendor sells the property to a third party before the end of the period, they are obliged to pay you twice the amount that you laid down.

The Public Title Deed (Escritura de compraventa) This is the most important document. You and the vendor sign this contract before a notary. The notary witnesses the signing of the title deed and makes the document public. Once inscribed in the local Land Registry, the buyer appears as the new legal owner. Look carefully at all the clauses in the contract, paying special attention to those which specify who is responsible for paying the costs and taxes resulting from the purchase, and note the rights and obligations of both parties. If before you sign, you feel that you have not received sufficient information about the pitfalls and benefits, or how the Law protects you, seek advice from a solicitor, personal property advisor or the notary.

How to buy a house with no catches
When you obtain a mortgage loan and buy a house, Spanish Law establishes a series of compulsory costs to ensure there are no problems when on completion of the sale.

Don't be caught out - find out about them beforehand! Costs incurred before you apply for a mortgage: · Valuation fees: before you apply for a mortgage loan, you will need to check the real value of the property in order to decide the maximum amount you can apply for. This calculation is carried out by professional valuers registered with the Bank of Spain. ·Fee for establishing the situation of the property in the local Land Registry: this costs approximately 25 euros. Cost of mortgage loan and purchase of the property: · Notary fees: for the granting of the mortgage loan and title deeds of the property. · Land Registry Fees: for the inscription of the mortgage loan and title deeds of the property in the local Land Registry. · Taxes: on signing the public deed for the establishment of the mortgage loan agreement you will be required to pay the Stamp Duty (Impuesto sobre Actos Jurídicos Documentados IAJD), the amount of which is determined by each autonomous government. Where no specific regulation applies, 0.5% will be levied on the value of the mortgage. Property taxes vary according to whether the property is new or used: · New property: 7% VAT is applicable and IAJD is generally 0.5%. · Used property: The Transfer Tax (Impuesto de Transmisiones Patrimoniales) is payable at the rate determined by each autonomous region, and where there is no specified rate, this is charged at 6%. · Agency fees: for the administration of taxes payable to the Ministry of Finance and for inscription of the loan and purchase agreements in the local Land Registry.  · Property damage insurance: this is an insurance policy required by law to cover any damage which may occur to the structure of the property. You may wish to contract this insurance policy through your branch of your bank. Costs of setting up the loan with the mortgage provider:

In addition to the concepts described above, when you sign a mortgage loan agreement with any financial entity in Spain, you need to be aware of the following costs: · Opening commission: this is a percentage of the total capital provided by the mortgage loan. · Study commission: this is a percentage of the capital which is only applicable to loans of more than 150,253 euros.

A tailor-made mortgage loan
With a mortgage loan you can buy your home more easily, since not only does it help to finance the purchase, but also the property itself acts as the guarantee. You will find a whole range of mortgage loan options allowing you to choose the one that best suits your needs. We can offer a mortgage that is tailor-made for you with minimum paperwork and a rapid response.