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A GUIDE TO BUYING A PROPERTY IN SPAIN

FAMILIARISATION TOUR

Accompanied tour of Torrevieja and outlying areas and/or other areas of particular interest to the client.  Half to one full day dependant on visit duration allocated by the client.

 PROPERTY TOUR

Accompanied tour of new and resale properties.  An accompanied property tour is the usual approach to viewing properties here in Spain. Unlike in the UK or Ireland, a property consultant will take you to see selected properties of interest and surrounding areas over a three or four day periode. All that we ask, is that you are in a position to buy usually suggests property viewings over a three or four day periode. This can be with a subsidised trip or at the buyer's expense. In both cases, all that we ask, is that you are in a position to buy should we find a suitable property for you.

THE SALE

1. If a NEW property is chosen, visit developers office to sign contract and pay €uros 3000 (or £2000) deposit. Subsequent payments vary from 30% to 50% of the purchase price usually to be paid within three months, subject to the builder.

2.If RESALE property is chosen, meet solicitor to sign contact, power-of-attorney, and pay minimum of €uros 3000 (£2000) holding fee and then within 10 days you pay the remainder amounting to 10% of the total price of the property. The remaining amount is then paid on the day you get your keys & the title deed.

3. Open bank account.

4.Obtain passport photographs for NIE No. application*

5. Visit Legal and Fiscal Representative for NIE No. application* and to discuss purchase of property.  The Fiscal Representative will handle all aspects of the purchase of new properties.

* NIE number is a Personal Identification no. for foreigners.  The cost of the

   application is usually included in the standard charge for purchasing property. As a

   rule the NIE takes 2-3 months to come through and can be collected from the Fiscal

   Representative during client’s next visit to the area.

The whole process can usually be accomplished within one day.  Throughout the process clients will be accompanied by one of our representatives.

Clients are required to bring the following:

• PASSPORT

• DRIVING LICENCE (if hiring a car)

• £2000 DEPOSIT (or €3000), or means of paying these sums in £ or €uros.  Means of paying include cash, credit card, bank draft, sterling cheque, or prior arrangement with UK bank to accept a faxed  instruction to transfer.  The preferred way is by credit card. DEBIT CARDS ARE NOT IDEAL as they often require a very lengthy procedure which cannot be performed in evenings or weekends.

View-To-Buy Trips are arranged individually.  SUNZONE book flights, hotels, hire cars if required, and arrange airport collection.  According to the package selected some or all tour expenses may be paid by SUNZONE

Clients who travel to Spain on a SUNZONE subsidised tour are contractually bound to spend the duration of their stay in the company of a SUNZONE representative.

 PAYMENT TERMS 

On New Properties payment is made direct to the developer.  A typical payment schedule is as under:

·         DEPOSIT usually €uros 3000 or £2000.  Paid on signature of contract.

·         1^st INSTALMENT typically 25% of the total price of the property. Usually paid 30 days after signature of contract.

·         2^nd INSTALMENT typically a further 25% of the total price of the property.  Usually paid 60-90 days after signature of contract.

·         3^rd INSTALMENT if required.  A small minority of developers require a 3^rd Instalment of up to a further 25%, payable up to 6 months before completion of the property

·         FINAL INSTALMENT of outstanding balance of price on completion of purchase

On Resale Properties the terms are usually as under:

·         DEPOSIT 10% of the price of the property, or €uros 8000, whichever is the greater.

·         FINAL PAYMENT on completion of purchase

A CAUTIONARY NOTE

NEVER give money to an individual, however respectable they may seem. Payments should only be made to the developer (if new property) or an established Estate Agent or legal representative (if a resale).

MORTGAGES  

Available up to 80% on all properties from Sunzone, subject to proof of income (normally requires the 3 last payslips, a P60, or if self-employed, account details going back 3 years).  Repayments may be over 5 years, 10 years, 15 years or up to 40 years. Interest rates (Currently at 4.00%) are usually about 1% lower than in the UK and reviewed annually. It is now possible to make interest-only payments for at least five years.

ADDITIONAL EXPENSES RELATING TO THE PURCHASE 

The usual guideline figure is 10% of the property sale price, on properties from £40,000 - £100,000, and about 9% for higher priced properties.

Typical costs on a property priced at £100,000

·         7% IVA (Spanish transfer tax)                                £7000

·         Water and Electricity connection                            £250

·         Legal fees                                                            £900

·         Notary fee for registration of title deeds                   £400

          Land Registration Fee                                           £250

·         Miscellaneous                                                      £200

TOTAL EXPENSES                                                        £9000

These expenses are payable on completion of purchase

ANNUAL RUNNING COSTS

Running costs of a property in Spain are well below those in the UK.  Typical annual costs for a town house would be as under:

·         ELECTRICITY                                                 £350

·         WATER (metered)                                           £150

·         COUNCIL TAX (Rates)                                     £150

·         COMMUNITY CHARGES                                 £200

·         BUILDING AND CONTENTS INSURANCE         £150

TOTAL RUNNING COSTS                                        £1000

FINANCIAL  TRANSACTIONS 

It is required for all property owners to engage a local Fiscal Representative to handle their financial and tax affairs, especially if they are non-resident in Spain.  As part of the service SUNZONE will introduce the client to a reliable, English-speaking Fiscal Representative, who will also arrange to draw up a Will.

On purchases of new properties the Fiscal Representative handles all aspects of the purchase process up to signing of the title deed.

NIE No.

This is a social security code, which property owners in Spain need in order to carry out major financial transactions.  The Fiscal Representative will process clients’ applications as part of the property purchase at no extra charge.

BANK ACCOUNT                                                

Property owners in Spain are required to have a bank account, principally in order to pay utility and other bills by direct debit.

A bank account can be opened in about 30 minutes on production of a valid passport and an NIE number. It is not necessary to deposit funds at that time although if a property needs a valuation for a mortgage, the bank will require a small deposit of a few hundred euros.

TAX REGULATIONS   

Any revenue from property lettings and capital gains are subject to tax in Spain. The Fiscal Representative will advise on how to minimise the amounts payable.

NEW vs. RESALE -  THE PROS AND THE  CONS

SUNZONE sells both New and Resale properties.  Our policy is to explain to clients the merits and demerits of both without bias, so as to enable you to make an informed decision.

At the time of writing, on the south Costa Blanca and Costa Calida, new properties outsell resale properties by a ratio of 2 to 1.  However, this balance will shift gradually in favour of resale as land becomes scarcer and more expensive. 

REASONS TO BUY NEW    

• Usually costs less than identical or equivalent resale property, and therefore represents better value for money

• Covered by 10-year builders guarantee, legally enforceable

• Subject to current stringent building regulations

• Everything will be in full working order.  No upgrading or repair work required

• All new properties have low-maintenance finish

• Low deposit of £2000 secures property and fixes price

REASONS TO BUY RESALE  

• No waiting time

• Immediate vicinity usually fully-developed

• Usually sold furnished and with all fittings in place

• Any faults may reasonably be expected to have been rectified under the original warranty

IF OLDER PROPERTY -

• Will usually have larger rooms and plot

REASONS NOT  TO BUY NEW   

• Waiting time up to 2 years, average 12 months

• Building work may continue in the immediate vicinity for some time after occupation of property

• On some developments telephone lines may not be operational and delays of up to 18 months can be experienced (as an alternative, TELEFONICA are prepared to install satellite lines as a temporary expedient)

 REASONS NOT  TO BUY RESALE   

• Sometimes overpriced

• Minimum deposit at time of contract – 10%.  Balance usually payable within 6 weeks.

• Some wear and tear to be expected

• Care must be exercised to ensure that there are no charges or debts against the property, especially if buying direct from the owner (i.e. without an agent)

• Short payment timescale.  Minimum deposit 10% of price payable immediately.   Balance to be paid on handover of property, generally about 6-8 weeks from date of contract.

IF OVER 10 YEARS OLD -

• No longer covered by builder’s warranty

IF OVER 20 YEARS OLD -

• May not have been built to current building standards.

CONCLUSIONS                                                  

Because all clients have their own individual priorities and criteria we make no recommendations either way.

You pays your money and you takes your choice!

NOTE:   published property prices usually do not include 7% IVA (same as VAT) which is payable on all properties, new and resales.  A further 3% should be allowed for, to cover the transfer costs and legal charges.

AFTER- SALES SERVICE                                  

If you don’t think the after sales service is important, just ask the many clients who have been dumped by their agency once they have signed the contract.  The quality of the after sales service you receive is at least as important as buying the right property.  Most of our clients are resident in the UK, and when they return home after making their purchase it is comforting to know that someone over here is still looking after their interests, and is available at the end of a telephone line from 7.00am to midnight, seven days a week (which means you can phone in the evening or at weekends, at cheap rate).  And after sales service doesn’t just mean dealing with matters connected to the property itself.

SUNZONE is proud of its After-Sales Service.  We believe it to be second-to-none.  This is why we call it our “AFTER SALES GUARANTEE.”  And because it is a guarantee it is legally binding on us.

THE SUNZONE 25-POINT AFTER-SALES GUARANTEE

FOR ALL BUYERS AFTER COMPLETION OF PURCHASE

·         HELPLINE open 7.00am to Midnight for general assistance

plus

·         Introduction to a Legal and Fiscal Representative (see note 1)

·         Introduction to a Bank (see note 2)

ADVICE and INFORMATION on the following –

·         Medical services, including private health insurance

·         House and contents insurance

·         Obtaining and operating a Mobile Phone

·         Land Line installation

·         Cut-price overseas telephone services

·         UK Television conversion

·         Television installation including Sky TV and Digital

·         Shopping

·         Buying a car

·         Road tax and motor insurance

·         Schools

·         Organizing removal from UK to Spain

·         Storage in Spain

·         Temporary accommodation in Spain

·         Application for Residence Permit

·         Social life

·         English Clubs and Associations, including Golf Clubs

·         Interpreter Services

·         Home security systems

·         Property maintenance services

·         Property management services 

TROUBLESHOOTING 

Our AFTER-SALES GUARANTEE includes our acting as your troubleshooter in the unlikely event of problems or misunderstandings with the developer or owner of the property you have purchased.

In the ordinary way, once the contract has been signed, you will communicate directly with the developer or, in the case of a resale, your legal representative.  However, if you cannot get a satisfactory answer we will intervene on your behalf.  Being ‘on the spot’ enables us to succeed where a telephone call or letter might fail. Just like in the UK, your legal and fiscal people are the ones responsible for taking care of the completion of your purchase – but of course, if you are having problems we will use our best endeavors to assist.

COMPLETION OF PURCHASE

When your property is finished, you will be contacted by ourselves or by the builder or developer. At that stage you will need to speak with your fiscal representative to establish your completion funds, notary date – at which you and the builder or developer will sign contracts; from this date, the property is yours – you will receive the keys on the day you complete.

This is how your completion visit should go.

• You are advised of the building completion

• You speak to your fiscal advisor to establish final payment amount, mortgage requirement, if any etc – also to mutually agree a notary date convenient to all parties (yourselves, the builder or developer and your representative)

• Arrival at airport; you will need to advise us prior to this whether your require assistance in accommodation booking, car hire, airport pick-up etc

• Meeting with Sunzone representative to visit building site to undertake thorough snagging list

• Completion day at the notary; your fiscal representative will advise you of the notary to be used, together with the address and directions as to how to get there.

• Now you have the keys to your new Spanish home – you can go ahead with installing furniture, white goods etc – and the serious business of celebrating!

TESTIMONIALS   

If you would like to speak to any of our former and current clients we will be happy to provide an up-to-date list from which you can make your own selection which one/s to contact.

NOTES

1.       The Fiscal Representative is a tax and legal adviser who also acts as intermediary between client and lawyers, notaries, and others in the house purchase process.

2.       We work closely with 4 major banks with English-speaking personnel.  All these banks offer mortgages to British clients at competitive rates.

© Ventura Real Estate SL 2007

SUNZONE SPANISH PROPERTIES: UK 0870 803 4763

Tel Spain- (0034) 966 705 653 or 965 703 247

email: info@sunzoneproperties.com

Plaza de la Constitucion, Nº5 Bajo

03181, Torrevieja, Alicante. (Costa Blanca)

Registered Estate Agent. C.I.F: B-54170485

€320,000 or £240,000

2-3 bed 2 bath quality Villa 300 metres from the soft white sand of 12 mile long Guardamar beach. Fully furnished, air-conditionning

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