The development of a Real Estate

Becoming an owner in Spain is still the dream of many of our fellow citizens wanting to settle there permanently or to acquire their second home.

Indeed, the Costa Blanca has an incentive to make this choice: An ideal climate, a beautiful natural environment, a real estate and infrastructure of the highest order, an excellent transport network, a renowned gastronomy, culture, folklore and Of preserved traditions.

In short! The quality of a Mediterranean rhythm of life 2 hours flight from Paris, Brussels or Geneva ...

With the crisis helping, many are looking at the Costa Blanca in search of real estate opportunities, but not always knowing how to go about it, the questions arise. What are the benchmarks? What is the rule of the game? Who does what?

In this regard, it is worth recalling some useful principles for managing your acquisition. Here is a brief summary of the residential property purchase system in Spain that will allow you to better understand this universe.

We work in partnership with the various trusted real estate agencies in the sector, which allows us to select the best properties from all those who are on sale or if you prefer, to select for yourself the properties that correspond to you and We will organize and organize visits for you during your visit.

We will be able to advise you skillfully, not only for the choice of a property, but also on the choice of the sector according to your desideratas.

I know the history of the properties and therefore I will indicate the possibilities of negotiation on them, will forward your offer, will inform you of the legal situation of the property in view of the register of the property (Nota simple del registro de la propiedad) (Contracto de reserva), the promise to purchase (Contrato privado de compraventa), I will help you in your search for financing from the banks. I will also be able to advise you of a good French lawyer who will prepare the file for the notarial signature (Escritura) and will do all the legal checks necessary for the smooth progress of the purchase (because the process and the legal rules may vary with your country of origin). He will also take care of the NIE's request, the change of name with the various municipal bodies, water company, electricity, gas, telephone, town hall, tax services, community of owners ...

Know that the selling fees are the responsibility of the owner ...

Purchase Checks:

The Record of Ownership or "Nota Simple", making it possible to obtain from the Conservation of the Mortgages (Registro de la Propiedad) all the information on the current legal situation of the property (identity of the owner, origin of the property, Easements, mortgages or possible seizures).

The lawyer will also ask for a copy of proof of payment of the last property tax (IBI). This tax contains valuable information about the property you are going to acquire, such as the area, the reference to the land register, the nature of the property, the current mailing address of the property (names and street numbers may change !!) . Finally, this document also makes it possible to determine the minimum tax value of the property.

Purchase Offer:

In Spain, it is common practice to send an offer to the owner of the property to be sold. I will be the one who will take care of this process and I will guide you on the possibilities of negotiation according to the history of the property: price recently dropped or excessive in relation to the market, if this is the first offer, previous offers Which have been rejected, the need to sell urgent owners, if there is another interested buyer ... Keep in mind that I will do everything to make the case can be done, I will be your best ally and will try to " Be as clever as possible to negotiate your proposal.

Please note that if your offer is accepted, you will have to go ahead by proceeding to the reservation of the property under the conditions pactées.

Do not make multiple offers on multiple products, you will lose credibility, but do them successively if your previous proposal was rejected. A written offer is always preferable to that made verbally.

The mechanism of a classic real estate purchase takes place in 3 stages:

Booking: La Reserva

The Promise to Purchase: El Contrato Privado de Compraventa

The Authentic Act: La Escritura

The Reserva:

The payment of a deposit allows you to reserve the offer, pending the signing of the promise to purchase, this sum is in the range of 5,000 to 10,000 euros (depending on the sale price).

Even if you are passing through, you can perfectly sign the reservation before your return, as soon as the parties agree on the thing and the price. More often than not, it is the agent who signs the deed in place and on behalf of the seller, all under the terms of sale that binds them. Of course, if you do not have the possibility to travel, the signature of the reservation or the promise to purchase can be done by correspondence and payment of the deposit by bank transfer.

Tip: At this point you will need to open a bank account in Spain and ask for your NIE: the 2 points are mandatory.

In case of withdrawal from your part, you lose the amount paid.

El Contrato Privado de Compraventa:

This document is more important than the authentic instrument, for it will only be a transcription of what has been signed before. It is a private sub-document signed between the parties. Of course, the signature of this document preceded the signature of the public document before the Notary.

By this act, the buyer undertakes to sign a public document before a Notary within a specified period. Failing to honor his commitments, he will lose the deposit, as if it were a capital allowance. The deposit to be paid is 10% of the sale price, including the deposit already paid at the time of booking.

This document contains the identity, contact information and qualities of the parties, the description of the proposed transaction, their legal capacity to sell or purchase, a description of the object with its registration number The legal situation of the property (free of charge, of tenants), the agreed price, the installments paid, the deadline for the signature of the authentic deed (Escritura) before the Notary, the apportionment of the payment of the costs and charges due , The date of the transfer of ownership and / or possession of the dwelling, the consequences of the withdrawal of one of the parties.

Warning: the signature of this act does not deprive the seller of selling to a better buyer, provided that it pays to the ousted buyer, double of the deposit paid.

The Escritura:

The authentic deed of sale (La Escritura Pública de Compraventa) is a public document signed before a notary. In this deed, the parties will bring before the notary, their will to sell and buy and the conditions stipulated, and the notary, under his oath, will validate these declarations and will ensure the "legal security" of the sale through Of various checks (Legitimacy of the seller, payment of taxes, seizures, debts, servitudes ... etc). The parties may, at the time of such deed, be represented. This will be the time of delivery of the key to the buyer against payment of the balance due by certified bank check.

Tip: The commission that Spanish banks take to establish a certified check is high. It is advisable to negotiate this point during your request to open the account to avoid bad surprises .. !!

Who pays what?

Should there be no agreement on this subject, (rare cases), the Law distributes the costs in the following terms:

- The seller will pay: the charges for cancellation of outstanding charges; The public act; The urban contribution (IBI = municipal tax) and the tax on the increase in the value of the land (municipal "surplus value").

It is commonly agreed that the owner of the property on January 1 will pay the IBI for the current year. It is also permitted to apportion it among the parties in proportion to the months elapsed between 1 January and the date of signature of the act.

Recently, the seller must present an energy efficiency certificate of the property sold, at the time of signature of the authentic deed.

- The Buyer will pay the first copy of the deed; The transfer tax (ITP 10%) or T.V.A (10%) and AJD and registration on the Land Register. In total, approximately 12% for old and 13% for new, notary, registry and management fees, including attorney's fees.

It is customary for the buyer to pay the costs of the notarial public document!

- The fees of assessor, lawyer, etc., will be paid by the person who provides their services (1% of the selling price in general)

The right to choose the notary corresponds to the person who assumes the costs of the act or the greater part of them.

Some points about the buyer's administrative and tax obligations:

A person who is not resident in Spain for tax purposes and who owns a building situated in the country will be subject to non-resident income tax as well as to property tax (IBI) which is a local tax required by your local council (equivalent to the property tax).

When an immovable is the property of a couple or of several persons, each of them is an independent passive subject, to make separate declarations.

On the other hand, a foreign identification number (NIE) issued by the General Directorate of Police is required to make the purchase, as well as the Tax Identification Number (TIN), which is to solicit from the administration tax.

It is not compulsory to appoint a representative before the Tax Administration (with the exception of residents of countries or territories with which there is no effective exchange of tax information). However, if you wish, you can voluntarily designate a representative and communicate it to the delegation or administration of the corresponding tax agency at the place where the building is located.

Procedures subsequent to the execution of the act:

Once the authentic instrument has been signed, certain steps and obligations have to be carried out. Some will be taken care of by the notary through his study, such as payment of taxes and registration in the Land Register. You will have to pay an amount on account of the expenses for which you will have to give you the corresponding receipt. Once the act in your power, (about 2 months after signing) check the payment of taxes and registration and require a detail of the accounts. Do not accept global receipts, claim invoices originating from the Notary, Management Office, Land Registry, as well as the receipt of payment of taxes.

Other steps may be taken by your lawyer: Registration with the community of owners - changes of name and banking domiciliation for the distribution and supply that affect the housing (gas, electricity, telephone, etc.). Change of name with SUMA, town hall, etc ...

It is advisable to retain all original documents, vouchers, warranties and invoices in connection with your purchase.

Mortgage: Principles

You can perfectly finance your acquisition in Spain or possibly subrogate yourself to the seller's mortgage if the conditions suit you. This will save you some of the set-up costs, which represent about 3% of the amount borrowed.

As a non-resident, you can obtain financing generally ranging from 60 to 70% of the estimated value of the property realized by the bank through a "Tasación" (bank's expertise). The balance to be paid cash, as well as notary fees, taxes and registry.

Depending on the age of the buyer, you can get a repayment term staggered up to 30 years, the maximum ceiling age taken into account being 70 years.

In most cases, the interest rate is variable and defined on the basis of the so-called "EURIBOR" (Interbank Interest Rate) plus the percentage of the bank (0.75% to 3 %). But there are also fixed-rate loans, it's up to you to see with the banks what suits you best.

The commission to open the mortgage file collected by the bank generally represents 1% of the amount to be financed. This commission can be negotiated.

You may also borrow money in your country of origin, in which case your bank will ask you to take as security for one or more real estate that you have in the same country, of a value equivalent to that of the object concerned in Spain The bank in your country can not take security on a property located in Spain).

Charlotte Detourmignies and Nicolas Iglesias