Cavendish Brooke covers most areas of Spain but we specialise in sourcing luxury properties on the Costa del Sol. We have many years of experience in this region and have chosen to specialise here as it is the area of Spain that we know best and those that our clients most frequently ask us for.
As property finders we are not tax or legal specialists, but below is a brief outline of the buying process in Spain and things to budget for when thinking about purchasing your property there:
Some interesting facts about Spain
- 3rd largest country in Europe
- Capital = Madrid
- Over 90% Roman Catholic
- Several languages spoken, Castilian being the official language and Catalan, Galacian and Vasco being others
- Currency = Euro (EUR)
- Cueta and Melilla, cities in North Africa, are also part of Spain
- Spain is the second highest country in Europe, after Switzerland
- Time = GMT + 1
Climate and Healthcare
The weather in Spain is quite diverse. Along the coast the climate is typically Mediterranean but inland can be quite different, especially in winter where cold weather and snow is common. Most of the country enjoys hot and sunny summers with average temperatures around 22-25 degrees.
Healthcare in Spain is generally of a very high standard, as good or in some cases better than any other European country. The national health service, private sector and hospitals are all excellent. UK citizens can claim reduced cost and sometimes free healthcare in Spain upon presentation of a European Health Insurance Card (EHIC) which replaced the E111 form from 1 January 2006. The EHIC is valid for 3-5 years and can be applied for online at http://www.dh.gov.uk or via the post.
Visas and Documentation
As an EU citizen, you will require only a passport or Identification Card to enter Spain. Citizens of other countries are advised to check with the relevant authorities before travelling.
In order to drive in Spain you must be at least 18 years old and hold a valid EU driving licence. To hire a car you must be at least 21.
If you are travelling with your dog or cat, the pet must be vaccinated against rabies and identified with a microchip or tattoo. Pets under 3 months old may be refused entry. If your pet is an endangered species, you may not take them into Spain. Please note that in some areas of Spain muzzles are mandatory. It is also wise to carry the number of a local veterinarian in case of emergency.
The Buying Process
The buying process in Spain can vary from region to region, but the sequence below will help you gain an insight as to how the process usually works:
1 - Appoint a solicitor to conduct the necessary searches and ensure that all the legal requirements are met. Unless you speak fluent Spanish, you are best advised to use a solicitor who speaks English and can translate and explain the legal documents. We can recommend several UK based law firms who can assist you.
2 - Obtain your 'Numero de Identificacion de Extranjeros' or N.I.E - literally this means 'Foreigner's Identification Number'. This is a legal requirement and it is essential that you have your NIE before entering into any transaction that could incur tax implications, i.e. buying a property. It's easily obtained by visiting the Foreigner's department of most police stations in Spain but it can be arranged via the granting of a power of attorney if you cannot be present yourself.
3 - Arrange your mortgage, or alternative finance, if you haven't already. We can help you with this. If you require a mortgage, there is a range of UK and Spanish lenders who would offer terms and as in the UK, a lender will require a survey and will insist on instructing the valuation from their own approved panel of surveyors/valuers. We would always recommend that you obtain an independent survey, even if you are not using a mortgage to purchase the property.
4 - Pay a deposit to secure the property and for it to be taken off the market - although this is not mandatory for every sale. Once paid, the deposit is usually non-refundable if you change your mind. The deposit will usually be 10% of the purchase price.
5 - Check and sign the preliminary sale contract. Your solicitor will guide you through this. It is usually at this stage that the deposit becomes payable and both sides are committed to the transaction. If you wish, you can include a withdrawal clause in the contract allowing either you or the vendor to pull out of the sale. If you withdraw, you lose your 10% deposit; if the vendor withdraws, he has to pay you double the amount of the deposit as a penalty.
6 - Calculate all the costs involved including estate agents fees, taxes, valuation, notary, administration and legal fees.
7 - Wait for your solicitor to complete legal investigations such as checking that the owner has the authority to sell, whether there's any outstanding debt on the property and if it has the full and correct title deeds.
8 - Arrange a date for completion and signing in front of the notary. The notary will read the property deed (Escritura) aloud and ensure that it is understood by all parties concerned. It is important to note that the notary is a public official who is there simply to verify that the sale/purchase has been signed in his presence. The notary does not represent you or in any way negate the need for a solicitor.
9 - Pay for the property and applicable taxes. It is a safe guide to assume an additional 10% in fees to cover purchase costs, stamp duty, etc.
10 - Title will be registered at the Land Registry and your solicitor will advise you when you can expect to receive the full title deeds.
Tax and Legal
We at Cavendish Brooke International are not tax experts, however, we will be happy to introduce you to professionals who will be delighted to assist you and answer any questions you may have on this subject. The information below is offered merely as a helpful note and we strongly recommend you employ the services of professional tax advisers before completing on your purchase.
- As a non-resident you will be liable to Spanish Wealth Tax on all property in Spain without any deductions given. Non-residents will be liable each year.
- You are also liable to Spanish Capital Gains Tax on the sale of your property.
- There are local taxes equivalent to UK Council Tax. Overall, including Wealth Tax, the taxes are reasonable, so do not be put off.
- Any rental income arising from your Spanish property is liable to Spanish Income Tax.
- Purchase through a Limited Company can sometimes be beneficial, but we recommend you seek specialist advice prior to arranging.
The Spanish legal system is very different to the English system. However, provided that you make the necessary enquiries and checks, you should have no concerns about buying in Spain. To avoid complications and pitfalls, we strongly recommend that you employ Independent legal advice. We will be very happy to put you in contact with a panel of lawyers who are totally independent of any developers or estate agents.
The usual cost for legal fees is approximately 1% of the total purchase price.
There are a wide range of specialist FX providers in the market who will arrange the transfer of your funds to Spain without charging fees and at more competitive rates than your bank could offer. We have negotiated advantageous terms with several providers on behalf of our clients and would be delighted to introduce you.
The rules governing inheritance in Spain are not the same as in the UK and it is not automatic that a jointly owned property would pass to the joint owner in the event of the death of the other. It is therefore essential that you include your property within your Will with strict instructions as to who the beneficiaries would be. We would recommend that you write a Spanish Will to cover your assets there as this is easier and arguably a more comprehensive solution.
Following the introduction of the Pet Travel Scheme (PETS) in February 2000 which removed the need for pet dogs, cats or ferrets to be quarantined on their return to the UK, many people take their dogs or cats with them to Spain. In order to qualify for the exemption, your pet must be microchipped, vaccinated against rabies, treated for ticks and tapeworm and blood tested. They will then be issued with an EU Pet Passport. This is a simple explanation and more research should be undertaken before you plan to travel with your pet. Please refer to the DEFRA website for further detail: http://www.defra.gov.uk/animalh/quarantine/pets/index.htm.