A GUIDE TO PROPERTY PURCHASE

There are many myths and horror stories about buying property in Spain. We do understand that for most people, it is a daunting experience to purchase overseas.

There is a lot of information published about the subject, which can be very confusing. Some we have seen is actually incorrect. The laws in Spain are very different from those in the UK. However, the truth is that it is a very straightforward procedure and if followed properly by experienced professionals, there will not be a problem.

Firstly, do NOT listen to ANY advice given in bars. Secondly, do NOT listen to ANY advice given by anyone who is not a professional. And thirdly, deal only with an estate agent who is fully experienced.

Our advice, quite simply, is to choose an agent who is genuinely experienced, fully legal and attending to all the complex legalities, personally.

Our Role As Your Estate Agent Is To Ensure Your Security

Our job does not end when you have chosen your property. In fact that is when the important work begins. It is our responsibility to ensure that you have clear title to the property, that there are no debts, such as mortgages or embargoes and that all payments (Community Fees, Rates, electricity and water, etc.) are up-to-date on completion - because in Spain, you would inherit these debts. Ours is a free service to you, the purchaser because the vendor pays our fees.

The Land Registry

All the information about the property is available from the land registry. The complete history is shown, from the original purchase of the land by the builder, the registration of the building and all the changes of ownership. It also shows registration of all mortgages or embargoes with full details of the amounts, when they were taken, by whom and when they were cancelled.

The Notary

Tenerife Property World will make the search at the Land Registry and obtain a “Nota Simple” which will show all the required information. We will also gather all the other necessary documentation and present it to the Notary. This not only includes the originals of all relevant receipts but also a letter from the Administrator of the Community of Owners, confirming that all payments are made. The Notary now has the legal obligation to check these details. Years ago they did not and that was when there were true stories of owners inheriting awful financial problems with ownership of their property. When the Notary is satisfied that the sale may proceed, arrangements will be made for the completion. At that point we can also confirm the exact amount you will pay for Notary’s fees, Land registry fees and taxes (expect to pay around 7%-8% on average).

Completion

On completion the buyer and seller (or a representative with Power of Attorney) appear before the notary and all parties sign the Deed (Escritura). At that point bank drafts and the keys are handed over and the property is yours. Before you actually sign you will receive a translation by the official translator at the Notary’s office (who is also named in the deed) to explain exactly what it contains regarding buyer, seller and the property itself and clearly stating that the property is sold without charges, debts and tenants.

Power of Attorney

If you give a Power of Attorney to someone to sign the deed and buy your property it is quite safe to do so and is quite common. Sometimes it is difficult for both buyer and seller to attend the Notary office on the same day. The Power of Attorney is precise and states clearly that your appointed representative only has the power to sign on your behalf in transferring that particular property into your name – nothing else. The Notary needs the details (Name address, Passport) of the person you appoint. You receive a translation before you sign the document, which also includes your details and the address of the property. The Notary fee for this is about £35. If you purchase a property in joint names, you should consider that subsequently you also make a General Power of Attorney, in favour of each other, so either of you may act for the other, if necessary, in the future.

Spanish Bank Accounts

We will help you open an account. It’s free and simple. You can have a non-resident account in pesetas and/or sterling. You only need to produce your passports and give specimen signatures. No bank references are required. You will be given the full 20-digit code number immediately and you can transfer funds into the account(s) at a later date.

The Community of Owners and other Costs

Upon signing deeds you then become responsible for running costs of the property. If there is a Community of Owners (detached villas are not usually part of a Community) you may pay from your Spanish bank account by direct debit. You may also pay for electricity and water in the same way, if they are metered individually. You also have to pay annual rates, which are much less than the equivalent costs in the UK. We arrange all this for you as part of our free service. The Community is a democratic, non-profit making committee of owners, which is mandatory under Spanish law to administer all apartment complexes. They determine an annual budget for maintaining gardens, pools, receptions, etc. which is shared proportionally (per m2) between all the owners. The Community fee includes insurance of the buildings, so you only need to insure your contents. We can arrange this from around £50 p.a. (Lloyds of London) if you wish. You will be invited to attend the A.G.M. to vote on the proposed budgets and other business such as amendments to rules and regulations. You may put yourself forward as a committee member, or even president, if you wish.

Accountancy

Non-residents pay a small annual wealth tax on Spanish assets. If you wish to use the services of our in-house professionals we will give you all the relevant information.

The N.I.E

This is simply an identification number required by non-residents. If you subsequently become a resident this will also be the number of your “Residencia”. It takes only minutes, if we arrive early, before a queue forms. You must produce your passport and a photocopy for them to keep, together with two passport size photographs. The application form is filled in (with our assistance) and signed and the N.I.E. number is usually available for collection within a few weeks. This number will be required by the Notary and will also be required by your bank. In the future it will be requested in other situations, such as ordering a telephone, or to purchase a car, etc. and your accountant will need it for your returns.

A Spanish Will

This is quick and inexpensive to arrange and highly recommended. It details only your Spanish assets.

Other Services

We also offer comprehensive in-house immigration and legal services together with a financial service, including onshore and offshore pensions, investments, mortgages and insurances. Should your property require any maintenance, building, renovation, electrical work, plumbing or decorating, we have skilled professional tradesmen available.