My hopes and dreams of the future consist of two things, financial security and living in Spain! Well at least one dream is possible! These days' people opt to retire abroad or buy a property overseas; preferably in a country with lots of sun, sand and sea. However, these people also have a backup plan and if they can afford it, they tend to keep a property in their homeland too to have a stable place to come back to every now and then. One of the most popular ventures for most British people is buying a Spanish property.
The decision to uproot abroad is not an easy decision to make. There are many points to consider before deciding to move, such as your financial situation - will you be transferring from one job to another, do you have a stable pension plan, are you able to afford not to work and are you able to afford living in the country you have chosen? Spain is a country that is most popular for its relaxed environment, beautiful beaches, comfortable weather and wonderful exotic food. The Spanish property prices are affordable even for people in their early twenties to buy.
In the past few years the Spanish property prices have seen a rise to record level both in real terms in terms of average income. This in turn had sparked fears of a price crash; however, this can only be possible if the oil price was to rise rapidly making it impossible for people to buy a property and causing devastating affects on the country's economy. The demand for a property in Spain is high due to their low interest rates and good investment opportunity for people abroad.
Though there have been speculation over a price crash, the general record has been proven that properties in Spain are fairly priced. However, due to the rising demands, more properties are being built but prices will likely to continue rising which in the short-term make it more difficult to buy. Spain is still the top choice for property investment, with its appealing culture and lifestyle it is no wonder more people are opting towards this part of Europe.
The Spanish culture is best known for its flamenco dancing, bullfights and beaches. For thousands of years Spain has been one of the cultural centres of Europe, rich in colourful trendy fashion, historical monuments and extraordinary artistic heritage. Many British people have been attracted to the friendly relaxed nature of the Spanish citizens. With all of the above in mind, renting out your property to tourist would be an unlikely issue. Buying a property in Spain would be a clever choice to make, regardless of the fear of price crashes it is still a good investment to make in the end.
Investment Property In Spain
Buying a holiday property in Spain, like buying a property in England, is most likely to be one of the biggest purchases we make in our life. Therefore, it is never advisable to be in too much of a hurry and rush into a deal without full consideration. It is well worth taking the time to look around your chosen area and make sure you have a clear picture of the relative prices and types of property available.
The Costa del Sol is a very popular region of Spain and life can be very different depending on which town you choose to live in. It is also well worth considering spending some time visiting the town of choice to see what amenities, nightlife and places of interest are available. Out of season, holiday resorts can appear very different with few people in the streets, deserted beaches, cold nights and occasional rain. Visiting at this time of year will help you to decide whether this is your ideal holiday destination. With Torrox and Nerja being voted as having the best climate in Europe, the weather is probably the one thing not to put you off living in Spain.
OFF-PLAN & RESALE PROPERTIES
Off-plan involves buying a property yet to be build either from an Estate Agent, or directly from a developer and is typically cheaper than purchasing a resale property. Another advantage of off-plan is that you usually have a say in some of the specifications, fittings, and possibly even the furnishings of the completed property. It is advisable to get a good Spanish lawyer to draw up a cast-iron contract and ensure the developer has obtained all the required licences, owns the land and there are no outstanding mortgages or loans on the property. This is especially important as all loans are taken out on the property itself rather than the owner of the property.
PROPERTY PURCHASE COSTS
The costs associated with a property purchase in Spain are around 10% of the property purchase price. If property values increase at an average of 3% per year, then it will take 3 years to recover the costs associated with buying. There are many fashionable areas in Spain whose properties have greatly benefited from the huge increase in foreign investors over the past 5 years pushing up prices considerably, but there are still bargains to be found.
SPANISH MORTGAGES
Typical loans that are available are 60% for non-residents and 80% for residents of the declared property value. Original documents must be shown when obtaining a mortgage that usually includes passport, driving licence, last 3 months pay slips and P60 for British people buying abroad.
INMOBILIARIAS (ESTATE AGENTS)
There are many Inmobiliarias in Spain that typically have many different types of property to view including apartments, villas, townhouses, fincas and rural properties. Commissions vary considerably and a typical value of 6% is not uncommon. It is a good idea to ensure that the Estate Agent you choose to buy a property from has a good reputation, is officially registered and holds a licence.
SPANISH LAW
When buying a property in Spain, it is important to check with the local Ayuntamiento (Town Hall) for debts, charges, mortgages and court orders as these are registered against the property and not the owner. If you purchase a property with outstanding debt, then this will be transferred to yourself. Within two months of signing the Escritura (Property Deeds), ownership must be registered with the local Town Hall within 2 months.
TAXES
Wealth Tax is charged annually at 0.2% for residents and 0.7% for non-residents of the value of the property. Residents also have the added benefit of the first 108,000 euros being exempt. Capital Gains Tax is charged on any profit you have made when you decide to sell your property. Residents are charged at the lower price of 20% as compared to 35% for non-residents. A further concession for residents is total exemption from Capital Gains Tax if aged over 65 and have lived in the property for at least 3 years.
FINAL CONSIDERATIONS
Above all, when purchasing a property in Spain ensure you get yourself a good Spanish Lawyer who is fluent in your language, and who knows the complexities of the Spanish buying process. The nearest UK Consular Office will supply a list of local Lawyers. Legal fees are typically 1-1.5% of the purchase price, but do agree on a price beforehand. The Lawyer should be able to warn of any potential problems, draw up an initial pre-sale contract, handle the customary 10% deposit and accompany you to see the Notary for final exchange of contracts.
A good Lawyer will ensure you end up with a property that is legally yours and free from financial debt. There are pitfalls with buying a property in any country, but by taking your time and doing a little local research, you should end up with your ideal place in the sun.
Both Anna Stenning & Steve Greenwood are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Anna Stenning has sinced written about articles on various topics from computers and the internet, Management and Wedding Gifts. Anna Stenning plans to buy a and is still researching the market in Spain. For more information click on. Anna Stenning's top article generates over 4090000 views. to your Favourites.
Steve Greenwood has sinced written about articles on various topics from Vacation, Vacation and Vacation. Steve Greenwood has lived on the Costa del Sol in Spain for 3 years. You are invited to visit for property rentals, tourist attraction. Steve Greenwood's top article generates over 135000 views. to your Favourites.
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