Buying property in Spain

Buying a property in Spain

What to do before buying in Spain

Many people have come to live in Spain from other countries over the past 30 years. Many of these are people who have retired and want to spend their time in a country with more sunshine and opportunities for living an outdoor life. Others might come to work here on a contract or have been freed by the power of the internet to work wherever they choose.

What is important is that you have prepared carefully and you know, as far as possible, what to expect. This article aims to help you draw up your plans and make the right decisions in the early stages of your move.

Living in Spain

Living in Spain

Have you ever wondered about what it’s like to live in Spain? If you’ve holidayed here or have relatives here already, it’s likely that it has crossed your mind at least once. You find yourself looking in the estate agent’s window reflecting on how your life might be different living in Spain, whether it’s a possibility or not.

It’s a big step to take and you must plan carefully. You will want to talk through your plans with family and friends and, most importantly, check your budget. Things have changed since the time when it was possible just to pack your bag and resettle. Now, you must have proof that you are self-sufficient and will have health care.

This requirement shouldn’t prevent you, if you have the means. The Spanish government do not expect you to be millionaire! In fact, the requirement to demonstrate that you have an income is a safeguard not only for the state but for you too.

One word of warning. If you do take the decision to come and live in Spain, then you would be wise to ensure that your month of moving is not August. Not only is this usually the hottest month when any kind of activity is tough going, but it’s also the month when most people abandon the office and take to the beach. If you are anticipating any form of work being done at this time you could find yourself disappointed.

Many people make the choice of living in Spain based, at least partly, upon the excellent weather there is here.

Weather in Spain

Weather in Spain

Blue, clear skies are the order of the day when it comes to the weather in Spain. Whether it is December or August, clouds make a rare appearance and there are few days when the sky is overcast. This makes living in Spain particularly enjoyable. You can book your tennis court being pretty sure that rain won’t stop play. Walking, hiking, cycling, playing bowls, a round of golf, to name but a few, are all much more enjoyable when they’re done under a blue sky. If you are considering living in Spain, however, there are a few things you should be aware of when it comes to the weather.

Rare it may be, but when it rains, it rains. Large quantities of rainfall in a short time span mean that flooding isn’t unusual and when selecting a property you should check out if there have been any problems locally with flood water.

Many town halls are now making an extra effort to deal with the issue but there are still some housing estates that suffer particularly badly from being situated on low ground where flood water tends to collect. Local roads are also worth checking for whether they are usually affected or not. Neighbours to any property you are considering are usually happy to share their flood stories.

Another issue you should be aware of is that winters may be bright and clear but they can also be cold. Some parts of Spain regularly drop below freezing in the winter and snow is not uncommon. If you choose to live on the coast then temperatures are milder here. However, it still gets nippy in December, January and February and you should check that property you look at has a means of you keeping warm.

There are many different types of ways of heating your home in Spain. Gas bottles are popular along with wood burners and electric radiators. Air conditioning units can also usually be used to heat property as well as to cool it down. You will need to consider what option is best for you, taking into account your monthly budget, the size of the property and your own susceptibility to cold.

Types of houses in Spain

Types of houses in Spain

Once you’ve taken the decision that living in Spain is for you, then you will need to fix on where you would like to live and what you would like to live in. There are many different types of houses in Spain and it is wise to note down your needs to begin with to help narrow the search.

Some of the questions you might want to focus on include:

  • How many bedrooms do you need?
  • Do you want to be detached?
  • Is it important to be on the ground floor?
  • Do you need a garden/ patio?
  • Do you want a swimming pool?
  • Is a garage important?
  • What access arrangements do you need?

Don’t neglect to think about storage. New houses in particular will maximise every available square metre. Consider where you will put those items you do not want to use all the time.

Also consider the age of the house you would like to buy and the state of repair it is in. Some people are very handy and will throw themselves into DIY with zeal. Others wouldn’t know one end of a screwdriver from another and are best moving into a new property or recently refurbished one. You know your own preference, just don’t be tempted to take on a huge refurbishment that will leave you short of money or tripping over loose floor boards for years to come.

When you are clear about what your needs are then you can start to look around the area that you have chosen to see which houses or flats might fit. There is usually a huge range available from large, detached villas to little one-bedroom bungalows and flats. Try and think ahead a little too. The apartment on the 25th floor might have splendid views and be ideal now but what about when your grand children visit in a few years time?

New build Spain

New build Spain

After you’ve considered carefully your preferences for property then new build might be the option you choose. New build in Spain will suit those who do not enjoy DIY and are very keen to have a pristine property to move into. There are two types of new build. Those that are still ‘off-plan’ and have not been built yet and those that have.

For some, buying off-plan, seems too much of a risky option. It’s true that there were problems at one time with unscrupulous developers and that this was magnified by the property boom and bust. Now, however, it is a much safer process. If you are considering this option you should only use established developers with building guarantees.

As with all conveyancing processes it is important that you use the services of a reputable and independent lawyer who is qualified and specialises in Spanish law. You should also choose a lawyer who you can communicate with clearly and easily. Crucial is that you don’t sign anything or pay anything before your lawyer has checked it first.

Don’t be rushed. Even if you are told this is the very last property and you will lose it if you delay one day more, don’t sign until your legal representative agrees. At the time it can seem like the end of the world if it falls through, but worse is to discover that you’ve lost your money or invested in a project that will have future complications.

In the meantime you can also be doing your own research on the developer. Check out their previous developments and see if the completed homes match up to the homes in the picture. You could even try and get some feedback from the people living there. What are their customer satisfaction levels? Did they keep to the projected build time? Has everything that was promised been honoured?

Resale properties in Spain

Resale properties in Spain

Much of the advice surrounding purchase of resale properties in Spain is similar to that of purchase of new build. Don’t sign anything until the contract has been checked and your lawyer has confirmed that there are no debts held against the property. Although building on illegal land is no longer as much of a problem as it was during the boom years, there are still ‘irregular’ properties around. You want to be sure that the one you have set your heart on isn’t one of them.

The advantage with resale is that you can see the property a few, or many, years on and any teething problems will have come and gone or at least should be clearly visible. If you are interested in home refurbishment, this can be a better choice for you. A slightly older property can provide a blank canvass on which you can begin to plan your perfect place in Spain.

Remember that if you do plan to make changes to your property you will need to have permission for most works. Either an ‘obra mayor’ for major work such as a swimming pool or extension or ‘obra menor’ for minor works. You will also need to have permission from your community of owners.

The community of owners (comunidad de proprietarios) is a feature of most urbanisations and housing developments in Spain. At annual general meetings the community makes decisions relating to the community and its upkeep. They also have a say in home improvements, particularly where these are visible to others within the community.

If you do have a resale property in mind then you should try and visit it at different times of the week and times of the day. Chat to neighbours if you can and find out what it is like to live there. Establish whether it is an area that is popular with residents or non-residents. If you are choosing your all-year round home then you might not want to settle somewhere where the majority of home owners are only there for a few weeks a year.

Holiday homes in Spain

So far, we have written mostly about buying a property to live in in Spain. However, many people buy holiday homes in Spain and so begins their love affair with the country and its lifestyle. Starting out as a holiday maker is often the route to making the choice to live here. Many people who buy during their middle years and bring the children out for holidays, see the potential of Spain as somewhere to enjoy their retirement.

Sometimes it can be difficult just to transform your holiday home into a permanent residence. Your priorities are different and the storage and space you might need to live in Spain is not always available. You will then need to make the decision whether to adapt your holiday home or whether to sell it and buy something which fits your new needs more easily.

If you choose to sell and buy again then make sure you have allowed plenty of money for both transactions. It can be a good option at the moment, particularly if you are choosing to upgrade your property. Small, budget properties are generally retaining their value more than large properties. There is greater demand for small holiday homes than larger permanent residencies. You should be able to benefit from this.

Having had a holiday home initially, means that when you do come to live in Spain then you should already be familiar with some important aspects of life here. This will help the transition and leave you feeling more confident in your decision.

Some people can find it difficult to make the adjustment from tourist to resident. You will have developed ‘I’m on holiday’ habits that can be difficult to drop and it’s not unusual to find that there is a transition period to negotiate. You cannot continue to be on holiday for years without paying the price of health and money. Most people will quickly try to establish a more toned down lifestyle that allows them to establish a normal routine rather than eating out every night.

Cost of buying a house in Spain

Another important factor in your search for the ideal property is, of course, how much it will cost. You must be very clear about what your budget is and not be tempted to go above it. Yes, you want to have the ideal property but you will not have opportunity to enjoy it if the cost of buying a house in Spain leaves you with so little in the pot that you struggle financially when you come to live here.

The good news is that property prices have fallen dramatically since the boom years of the early 2000s. There has been a small recovery over the past two to three years but house prices are still not as high as they were. As a buyer, you are in a strong negotiating position and there’s plenty to choose from.

It’s not just the cost of the property that you must budget for. There are expenses involved in buying property that you need to build into your calculations. These include four types:

  • Taxes
  • Legal fees for the purchasing process
  • Banking procedures and money exchange
  • Mortgage costs

Taxes will vary depending on whether it is a new build property you purchase or a resale. For new build you will pay IVA (VAT) which is currently at 10% and stamp duty. Stamp duty is usually around 1.5% and varies according to where the property is located. If the property is resale there will be transfer tax to pay (ITP) which is currently around 10%.

Your legal fees will include the cost of the solicitor as well as the Spanish Notary fee (starts at around €800) and Spanish Land Registry (starts at around €400). We advise people to set aside an additional 13-15% of the total property price when planning their house-buying budget.

Investment in Spain

Some people who already have a holiday home choose to rent it out and buy another property as a permanent residency. If you don’t have the full funds available to be able to do this you might be in a position to obtain a mortgage. Banks are now lending again and although you will clearly need to prove your capacity to payback the interest, it can be a good option if you want to extend your level of investment in Spain.

Buying property to rent out is popular and can generate useful income. However, be aware that you must pay income tax on rental income and that this is paid quarterly:

  • 1st quarter: January, February, March – tax payable before 20th April
  • 2nd quarter: April, May, June – tax payable before 20th July
  • 3rd quarter: July, August, September – tax payable before 20th October
  • 4th quarter: October, November, December – tax payable before 20th January

You are able to deduct some expenses from the income but you should be clear that whether you are a resident or a non-resident, Spain expects you to pay your rental taxes here.

At different times, purchasing land in Spain has been a popular method of investment. This has sometimes been particularly lucrative if the land is "suelo urbano" and can legally be built on. Although building stopped around 2008, there has been an increased interest in new houses in the last two to three years and plots of land have once more been in demand.

Some people who have invested in buying land have then gone on to build their own property here. You can estimate that the purchase of the building plot is approximately 45% of the total cost you might pay. You would then need around 40% for the building work, 8% for professional fees and 7% for taxes and licenses.

It’s not the usual way in which people begin their lives in Spain, but it is another alternative to consider. Spain is a wonderful country with a varied landscape and something for everyone. When it comes to choosing your location and type of property, you really are spoilt for choice.

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People involved in the property purchase

Once you’ve done your research and found your ideal property then you can begin on the process of purchasing it and move in. Of course, it’s not that simple, there are many transactions you must complete along the way and a number of people you will meet who can help you to make them.

It’s important that some of the people involved in the property purchase in Spain are representing your interests. We cannot emphasise the importance of this enough. Mistakes have been made in the past because people have rushed too quickly into signing and paying a deposit for a property without taking independent advice first.

Real Estate Agents in Spain

Real Estate Agents in Spain

The Spanish Real Estate Agent is likely to be the first contact you have with the ‘professionals’ when you begin the process of looking for and purchasing a property. You should be aware that real estate agents in Spain are not regulated by law.

If the estate agent that the property is advertised with is a small enterprise you should check that it is a member of a professional association such as the Agente de Propiedad Inmobiliaria (API) or Expertos Inmobiliarios. Be cautious if the estate agent recommends a solicitor to use. Is it one that will effectively represent your interests or could professionalism be compromised by them having other vested interests too?

Most importantly, do not allow the estate agent to press you into signing or paying anything until you have had it checked by a legal expert. They can be very persuasive but this is a very big purchase and you need to ensure that everything has been vetted on your behalf.

You might find that there is more than one estate agent involved in selling a property and that they might even be advertising it at different prices. It’s worth doing your research to make sure that you are negotiating from the lowest sale price.

Although house prices have picked up a little in Spain you can still put in a ‘cheeky’ if not an insulting offer. You might start by offering 10% to 12% less than the asking price but do be prepared to settle for a reduction of 5%. Do not put in a ridiculously low offer and be aware that bank repossessions are already offered at rock bottom prices.

Only put in an offer if you really want to buy. Estate agents and sellers in Spain become very frustrated when an offer is made below the asking price that is eventually accepted and then the purchasers withdraw. Of course, if there is a good reason for pulling out of the sale, that’s a different matter.

Lawyer in Spain

Lawyer in Spain

We’ve all heard the horror stories of people who bought in Spain only to find that there were problems with the land, construction or building irregularities that saw their dreams of a life in Spain dissolve before them. In many of these cases, having the correct legal advice from a lawyer in Spain would have prevented this from happening.

There should be no short cuts when it comes to obtaining advice from a lawyer. It is vital that you have someone who represents your interests through the buying process. If someone is recommended to you, you should feel confident that there will be no conflict of interests for them. Your legal representative should check irregularities and ensure that a property is given a clean bill of health.

It is in your best interests to engage an independent lawyer who is registered at a Solicitors Bar. If you do not speak Spanish it is also important that your lawyer can communicate effectively with you in your native language. Mistakes can be made where instructions get lost in translation. Your lawyer should also be a specialist in Spanish property law and be able to talk you through the different steps of the conveyancing process.

The name for a lawyer or solicitor in Spain is ‘abogado’ and they have a different role to the gestor who you might have come across in other paperwork transactions. An abogado can act on your behalf in relation to property and urban law, inheritance, disputes and litigation, divorces and custody and, of course, the legal aspects of conveyancing.

The gestor, on the other hand, is a professional who deals with state-related paper work and can help you obtain documents such as transfer of vehicle ownership, driving licences and other paperwork matters.

When choosing your abogado you should check that they are accredited and are part of a professional body such as being registered with the college of lawyers.

Why you need legal representation in Spain

As mentioned above, having a good lawyer is essential to ensure that the conveyancing process goes smoothly and that your interests are protected. You may have heard of cases where property was built where it should not have been or perhaps the town hall agreed but provincial government did not. Perhaps extension work has been carried out and no permission has been given or there are debts held against the property that you might be required to settle. These are the kinds of reasons why you need legal representation in Spain.

Your lawyer, or solicitor, will check through any draft contract before allowing you to sign and will make a thorough search of the Spanish land registry to make sure that everything is in order. This includes that all works or modifications to the house are legal and that there are no debts held against it.

Your lawyer should also check that the estate agent is properly authorised to act on behalf of the client and that the contract protects your rights and your money.

They will prepare for the signing of the Title Deed, represent you at the Notaries and register the property with the Spanish Land Registry. These are all tasks that require the expertise of someone who really knows what they are doing and is looking out for you.

There are many similarities between the way in which property is bought and sold in Spain and other countries in Europe. However, there are also many differences that the majority of people are not aware of and require a specialist in the field to be familiar with.

Engaging a lawyer does cost money but it will be well worth it to ensure that your purchase is legal and to prevent complications once the property is yours.

English speaking lawyer in Spain

An ability to communicate easily is essential when you are considering who you might employ to help you. You can employ a Spanish lawyer who does not speak English but, if you do, you must be sure that there are always good translators on hand, if you don’t speak Spanish that is. You should be able to find an English speaking lawyer in Spain relatively easily.

In coastal areas where there are already a number of foreigners it is likely that you will have a choice of law firms with at least one English speaking lawyer amongst their staff. In some areas you will find that a whole abogados or asesores (advisors) is dedicated to meeting the needs of foreigners.

If you approach one of these you can expect that all the staff you meet will be able to speak English and that other languages are likely to be offered too. English speakers are by no means the only nationalities buying property in Spain. Over the past few years there has been an influx of Russian speakers and people from Scandinavia. Some lawyers’ offices have been established to deal specifically with their needs.

Searching on the internet is, of course, one way in which you can find an English speaking lawyer in Spain. However, do remember the importance of recommendation. You might try and establish whether other people of your nationality have found a lawyers’ office to be particularly good and would be prepared to vouch for them. Try and obtain at least two positive testimonials for the same lawyer. Ideally, these should be from people who have actually used the lawyer to help them buy property themselves.

You might want to ask:

  • How good was the communication between you?
  • Did they keep you informed during the process of your purchase?
  • Were you aware of what documents and information to bring with you each time?
  • Did they keep to deadlines and maintain the flow of the purchase?
  • Were appointments established to your satisfaction and were times kept to?
  • Did they explain adequately the process to you and did you feel informed?
  • How easy was it to get hold of them when you had a question?
  • Would you use them again if you purchased another property?

If you feel reasonably satisfied on all these points then you might want to contact the firm yourself and take your research to the next stage.

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Costs of buying in Spain

From 2000 to 2008 we saw a significant increase in the cost of buying a property in Spain. Around 2004, property purchase here was perhaps at its highest with many people choosing Spain as the location for their holiday home or as a country in which to live.

By 2008, the financial bubble burst and suddenly the price of houses here began to fall. People were not buying in the same numbers and developers found their lucrative market had all but dried up. Consequently some of them went out of business and the cranes, which had previously peppered the skyline, began to vanish once more.

Since then, until perhaps 2014, there was very little movement in terms of people buying and selling in Spain. This meant that there was a significant reduction in the prices of many properties. The cost of buying in Spain has increased a little since then. Over the past few years we have seen the number of purchasers grow and a few of the cranes have returned.

Property price in Spain

If you are interested in buying in Spain then you are spoilt for choice when it comes to the variety of property available and the range of prices you can purchase at. Although property price in Spain has recovered a little it is still not at the levels it was around 2004. Developers have had to work hard at ensuring their new build properties represent good value for money for increasingly discerning buyers.

When it comes to resale then owners have also had to be on their toes to attract a shrinking number of purchasers. Again, the market has recovered a little over the past three years but it’s no longer one where a seller can afford to pitch the price too high or not consider the competition.

House prices do vary enormously depending on where you want to buy in Spain. On the coast properties are the most expensive, whereas it is possible to buy a property inland significantly cheaper. Of course, there are reasons for this. Having a sea view is still a big plus as is close proximity to beaches. Available building land in these areas is limited and carefully controlled, so you will pay a premium price for a new build or off plan plot.

The property that has perhaps held its value most is that at the lower end of the market. Entry level properties of one or two bedrooms have attracted those wanting a holiday home at good value. These have been sold relatively quickly and close to the asking price. This even includes older properties that perhaps need complete refurbishment.

Those properties that have been more difficult to sell are those higher up the property ladder but not into the luxury villa category. This means that for between €150,000 - €200,000 you can get a two to three bedroom detached property with a pool. A price that would get you very little in many other European countries.

Tax in Spain

Tax in Spain

It is very important that you calculate your budget carefully before making any decisions about what you would like to buy in Spain. Do not push yourself to the limit and be prepared to stay under the threshold you have set, no matter how attractive the property. It’s not just a case of what the property costs itself. You need to allow another 13% – 15% on top of the price of the property for costs such as lawyers, the notary and, of course, tax in Spain.

There are three types of taxes you need to consider when making the decision of what kind of property to buy:

  1. tax costs that you incur when you actually buy the property
  2. the possibility of complementary tax if you have bought a very cheap property
  3. the property taxes you must pay annually (discussed later)

The type of tax you pay when you buy the property depends upon what type of property it is. If your property is new build then you will need to pay IVA (VAT) at 10% and stamp duty (AJD) at around 1.5% depending on where your property is located. If your property is a resale property then you have ITP (transfer tax) of 10% to pay. Again the amount of transfer tax depends on where your property is.

You should be aware that on occasions people are also charged what’s called complementary tax after they have completed on the purchase of their property. This tax is applied where the Tax Authority do not consider that the price you paid is in line with their own calculation of the property’s value. They can then charge you the difference between the Spanish transfer tax you have paid and what they calculate you should have paid.

If you do receive a bill for complementary tax then you may able to appeal against it if you register your complaint early enough. There is only a small window in which you can do this but many people have appealed successfully and not had to pay this additional tax in the end.

Legal fees for buying property in Spain

There is a strong argument for ensuring that you have legal representation. Some people may try to convince you that you do not have to pay legal fees for buying property in Spain and that short cuts can be taken. Be aware that this has proved to be a big mistake for some people who have rushed ahead without having their contracts checked.

Investing in a good solicitor is worthwhile. Buying a house is likely to be the biggest financial decision that you make. It is worth spending a little more to ensure that everything is legal and that you are not storing up difficulties for yourself.

Once you have identified a solicitor or lawyer you would like to use, then you should ask them for a personalised quote. There are two types of legal fees:

  • those that are external, including notary fees
  • those from your solicitor

The notary witnesses the signing of some essential documents and is the professional who legalises agreements and contracts. The notary will witness the signing of the Title Deed. The amount that notaries charge is prescribed by law and starts at around €800. The Title Deed is inscribed at the Spanish Land Registry and the fee for this usually starts at around €400.

On top of this you will have your own solicitor to pay. Prices vary, as you would expect, depending upon the level of service you receive. Some solicitors will provide the minimum but if you want a service with fully translated documents and explanations throughout the process in English then you should expect to pay a little more.

A lot will depend upon the price of the property you are buying. However, you can factor in a cost of between €1,200 and €1,500 for your solicitor. Once the purchasing process is complete then you should receive an itemised list of exactly how much everything has cost.

Mortgage in Spain

Mortgage in Spain

Before 2008 it was easy to get a mortgage in Spain. After this the banks tightened up significantly and it became very difficult to obtain one at all. Now, we seem to have found some middle ground. Yes, you can get a mortgage but, as you would expect in your home country, you will have satisfy the lender that you will be in a position to pay it back over the coming years.

You will need to have an acceptable deposit and show that you have the regular income to make the monthly payments. Both residents and non-residents can apply for a mortgage in Spain and mortgages can be for as long as 30 years but must be repaid by retirement age.

If you do decide to apply for a mortgage you should:

  • compare quotes from different mortgage providers
  • make sure you are familiar with all the terms and conditions of the mortgage provider you’ve chosen
  • ask for a firm offer that comes with all the details and the complete contract.

Once you have accepted the firm offer the mortgage provider will send the documentation to the notary’s in order to prepare the Mortgage Deed. The signing of the Mortgage Deed takes place at the same time at the signing of the Title Deed when the property officially becomes yours. After the signing, the Notary will send an electronic version of the Title Deed and the Mortgage Deed to the Land Registry in Spain.

You will need to pay an administrative cost to the mortgage lender and you need to be sure at an early stage of how much this will be. In some cases it has been as much as 2% of the mortgage itself but banks vary as to how they apply it.

When your mortgage is paid off then you will need to inform the Spanish Land Registry too. If they are not informed then it will remain on the Deed that you owe money on your home. In order to make sure that the records are in order, a representative from you mortgage holding bank needs to sign the Mortgage Cancellation Deed at the Notary Office. This can then be sent to the Land Registry.

Send money to Spain

Send money to Spain

What people often miss out of their calculations when it comes to their house purchasing budget is the actually cost they will incur when they send money to Spain. It is not just the exchange rate that we are talking about here, but also the cost of the transfer itself.

When you transfer money from one country to another there is a charge. If you transfer money through the normal process using a bank it can mean that you pay up to 4% of the amount transferred. They will also choose their own time to make the transfer and this might not be the best time as far as exchange rates are concerned.

The amount the transfer will cost you can be reduced by using a company who deal specifically in transferring money between countries. Many people choose to use a currency exchange company that don’t physically transfer your money from one country to another. They have funds in both and you pay into one account in one country and they pay into your account from their bank in the receiving country. They will also transfer money at a time that suits you, which means that you usually get a better exchange rate.

Before you get to the point of needing to make the transfer you should check out the different currency exchange companies and decide on one which you would like to use. Your account can be set up over the telephone and procedures put in place so that when the money is needed it can be transferred quickly.

If you have regular payments to make from your home country to Spain in the future then you might also want to use the same company to do this too. The exchange rate they offer you will be slightly lower than the official rate, this is how they make their money. However, overall you will still save money and the process is much more straightforward too.

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Property checks and certificates

Property checks and certificates

Property checks by the agent

Property checks by the agent are not routinely carried out on the property they are selling. It is important to keep this in mind when you read the property description. The estate agent will take the information given by the owner and repeat it at face value.

If the owner tells the estate agent that he has building permits for improvement work completed then the estate agent will repeat this to you. Therefore, you cannot be sure that this paperwork exists until your legal representative begins the searches.

What the estate agent will do very carefully is to check the potential selling price of the property. They will look at similar properties in the area and how much they are selling for. They will consider the market carefully and advise the owner on how much they might set the asking price at.

If the property is off plan then the estate agent can play a key role in keeping an eye on the progress of the building. This will be particularly important if you are purchasing whilst a non-resident and are limited in the number of visits you can make to Spain.

If it is a resale property you can also expect that the estate agent might assist with collecting some of the documents that your solicitor will need. They are the important link between you and the seller and you will need their help to ensure that your legal representative has the information required to make essential checks themselves.

Property checks by the lawyer

This is a vital stage of your property purchase. Once you have selected your legal representative then it is vital that the necessary property checks by the lawyer are in place before you sign any contract or pay a deposit.

Estate agents can be very persuasive when it comes to ensuring a sale. However, in the current market it is still the purchaser who is king and you should resist the temptation to sign and pay, however persuasive the estate agent might be.

There are two main types of checks that you should have on your Spanish property before making the decision to buy:

  • Legal status of the property, including home improvements
  • Utilities and taxes check

Your solicitor should make a thorough search of the Spanish Land Registry which will include a scrutiny of the nota simple providing details of any mortgage and debts held against the property. They will also check the Catastral Registry and compare the details on the two registries with the Title Deed in Spain to make sure they are consistent.

The solicitor will check that there is a first occupancy or habitation certificate in place and if planning permission has been given for any home improvements. They will want to see that the details recorded on the Title Deed are accurate and include any alterations that have been made.

Any outstanding debts held on the property must be cleared before the sale is completed. If there are outstanding payments on utilities then you will not be able to have the services reconnected or transferred into your name. Council tax, community fees and refuse collection must also all be up to date or you could find yourself liable for paying these too.

Legal status of the property

Although it is the responsibility of your lawyer to make these checks, it is useful if you are aware of the purpose of the documentation and registries that you might hear them mention. Below are some key documents that can raise questions about the legal status of the property.

Land Registry Spain

The Land Registry Spain (registro de la propiedad) lists the measurements, boundaries and physical characteristics of the property you are buying. The nota simple is an extract from the Land Registry that gives details of any mortgages and debts held against the property.

It includes a description of the property, if it is part of a community of owners, the construction and history of the property, if there are any outstanding taxes or debts held against the property and whether it conflicts with local planning laws.

Catastral Registry

The catastral registry or Catastro includes the official valuation of the property or the valor catastral. The valor catastral is used to calculate the IBI council tax bill. The property’s catastral reference is displayed on the IBI receipt and using this reference the catastral certificate can be obtained. This certificate includes the property’s boundaries, layout and exact position.

Habitation certificate

A habitation certificate (Cédula de Habitabilidad) is the certificate issued to the new owner of an existing property. It is necessary in order to complete on a mortgage or take out a new water or electricity contract.

Planning and permissions

Even relatively minor home improvements need evidence of planning and permissions. The town hall must have been asked and have given permission for changes to the property to take place. If the property is part of a community they should have given their consent too.

If permission has not been given, this could cause problems as they will not be recorded on the Title Deed and may hold up a sale or inheritance transfer.

Energy certificate in Spain

Property that is put on the market must have an energy certificate in Spain. The CEE (Certificado de Eficiencia Energética) provides information about how energy efficient a property is. It covers the efficiency of heating, lighting and water and how much money the energy bills can expect to be each year. It also includes recommendations as to how to reduce energy bills and carbon emissions. Ratings are given between A – G.

The financial status of the property

The financial status of the property

It’s not only the legality of the property that must be carefully checked by your solicitor. The financial status of the property is an important consideration when purchasing in Spain. Property such as cars and houses can have a charge placed against them if the person owning them has debts.

Debts and charges on the property

When buying in Spain many people are unaware that there might be debts and charges on the property they’ve fallen in love with. As the new owner you can be held responsible for outstanding debts and it is important that your lawyer checks for this. Those most frequently held against the property are unpaid taxes and there can also be fines and interest that’s accrued.

Debts and charges on utilities

If the previous owner has allowed electricity or water bills to fall into arrears then there might be debts and charges on utilities. Again, these can mean that any new owners must settle the previous owner’s bill before the contract can be changed to the new name.

Debts and charges on community fees

Many properties in Spain are part of a community of owners or comunidad de proprietarios. Each owner is assigned a percentage (cuota) of the annual expenses and this percentage is shown on the Title Deeds of the Spanish property. The fees might be collected by standing order monthly, quarterly or at longer intervals. If the fees remain unpaid then debts and charges on community fees might be recorded. There are methods of recovering debts but they are not easy to put into motion and some properties on communities lapse until the property is sold.

A good solicitor will ensure that the community certificate of debt is checked at the Notary’s office.

Inspections by an architect

Inspections by an architect

It is normal practice in most countries to have a survey completed on your property before you buy. However, it is surprising how infrequently inspections by an architect are carried out in Spain, particularly by foreign purchasers.

It is wise to employ a professional architect to give the property you are interested in a thorough inspection before you sign a contract. They will check the property against 200 agreed standards and make sure that everything is in order. For example, Tinsa is the leading property valuer in Spain and to find out more information about them you can visit their website www.tinsa.es.

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The private contract

The private contract

It is usual in Spain to sign a private contract before signing the official Title Deed. Although this contract isn’t logged on any official register the private contract is considered to be legally binding in law. For this reason it is extremely important that buyers have the contract checked before they sign. Failure to do this can lead to you being tied into conditions that at a later stage cause difficulties for you.

Equally important is that you don’t part with any money until the draft contract has been scrutinised and checked to ensure that it protects your rights and your money. This is a job for the solicitor you have appointed. It is important that the price declared for the purchase is what is recorded on the documents you sign as declaring a lower price is against the law. This practice was sometimes carried out in the past to avoid paying taxes.

When signing the private contract a deposit must be paid. If it makes reference in the contract to Article 1454 then there will be repercussions if either the buyer or seller changes their mind at this stage. If the purchaser pulls out then they will lose their deposit. If it is the vendor who breaks the terms of the contract then they must pay twice the amount of deposit as compensation unless it is written differently in the contract.

The private contract also includes information about who is responsible for paying the expenses surrounding the sale. In practice it is the purchaser who is responsible for paying everything except the plusvalía which the seller has to pay according to the law. In the case of a property being sold by a property developer, it is illegal for the buyer to pay an expense that is legally the seller’s responsibility.

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Documentation needed to buy in Spain

If you wish to buy a property in Spain then there are some specific documents that you must have acquired before hand. Some of these can be obtained whilst you are still in your home country if it is inconvenient for you to travel out to Spain at the time. The documentation needed to buy in Spain will also be needed for other transactions and activities once you have purchased your property. Of particular importance is the NIE.

NIE number

NIE Number

The NIE (Número de Identificación de Extranjeros) is an identification number for foreigners and must be obtained from the relevant police station in your local area. It is needed for any significant financial transaction that you make, including buying a car. You will also be asked for this during some other activities including receiving mail from the post office.

What you are required to take with you to obtain your NIE varies between towns let alone different autonomous communities and so it is vital that you check with yours first to establish what the requirements are for obtaining an NIE number in your area. In all cases you will need to produce your passport and one or two copies of this. You will also have to make a payment at the bank and bring proof of that payment back to the office.

Having an NIE means that you are registered with the Spanish Tax Authority. It is important that you look after your certificate and have duplicates available too. Sometimes you will require the original but often, if you can recite the number, that will be sufficient. If you are applying to be a resident in Spain then you are usually able to apply for your NIE and residencia at the same time. However, this does vary between town halls with some requiring you to be entered on the town hall census before acquiring residencia.

If you do lose your NIE or require a duplicate for some reason then you must apply at the same National Police station where it was originally issued. You have to go through the same procedure as when you first applied. You can also apply over the internet for a printed sticker version with a bar code. This is the format used for your tax returns and is accepted in most situations, including at the Notary’s office.

Power of attorney

Power of attorney

If you are unable to come to Spain to sign all the documentation that goes with a sale or you do not want to spend too much of your time here doing just that, then obtaining a power of attorney can be a good option. A power of attorney or ‘Poder Notarial’ is a written authorisation which allows someone to represent you in specific legal matters or transactions. It might be used for the purchase or sale of a property, for inheritance matters or to obtain an NIE.

It is important that if you do decide to use a power of attorney for conveyancing purposes that you can communicate well with your representative and, most importantly, that you trust them. It is advisable to choose a solicitor with a good reputation who speaks your native language to represent you. They should ensure that you are kept informed of the next steps even if you are not there to carry them out yourself.

A Spanish power of attorney can be as limited or as comprehensive as you wish. The extent of the power is specified and you can restrict it to the conveyancing process only. You can also revoke or cancel a power of attorney if you are not happy with your representative or proxy, although you will be required to pay for this process.

You can make a power of attorney in Spain by going to a public Spanish Notary who will authorise the document. Alternatively you can also make one in your own country. A Spanish solicitor will draft the document in a bilingual version so that the Notary in your own country can witness you signing the document and knows what it says. If you live within commuting distance of the Spanish Embassy in your home country then the power of attorney can be made by the Notary service there.

Passport

It is required in Spain that citizens carry with them some form of official identification that includes a photograph. For a Spanish citizen they are able to carry their identity card or DNI. For British people this can be more difficult as they are not issued with an identity card that is separate to their passport.

For this reason, officially British people in Spain should have their passport on them at all times. You might be asked to show your passport when using a credit card, at the post office or in the bank. It’s true that with the increased use of credit cards and enhanced security, many shops have dropped the practice of routinely asking for photo ID.

Carrying your passport round with you can cause practical difficulties and some people are very anxious about doing so. Alternatively, if you are a resident in Spain and have a Spanish driving licence many establishments will accept this as proof of identity, but not all. Some people have also chosen the route of having a copy of their passport certified by a Notary and have made it into their own identity card. Again, this will satisfy some authorities but not others.

Whereas in your home country you might only take out your passport ready for an annual trip abroad, if you live in Spain then you are likely to need it much more regularly. Therefore, it is particularly important that you keep a check on expiry dates for yourself and your family if you are not to come unstuck just when you need it.

An online service means that it is now much easier to renew your passport even whilst living abroad. Allow plenty of time, particularly around the holiday season and make sure that your photograph fulfils the requirements. It is time consuming and frustrating if your application is queried or returned.

Income report

It sometimes comes as a surprise when people purchasing a property in Spain are asked to provide details of their income. Of course, if you are applying for a mortgage you will expect to provide this kind of income report as a matter of course. However, even if you are not, you are likely to be asked about your profession and income.

This is not the Notary or solicitor being nosy. It is designed to help prevent money laundering. Money laundering is a problem in Spain and solicitors and other legal entities are required to make checks to help prevent it. One of these is asking clients who are making financial transactions about their income. They do not require detail but do need to feel satisfied that the means by which you are buying the property are legitimate ones.

These kinds of checks are not confined to those buying property. Both non-residents and residents are sometimes asked for additional information by their banks. They are usually asked for their NIE, passport details and some proof of income. This is part of the campaign that banks should ‘know their customer’.

Banks are on the look out for sudden and substantial increases in funds and large withdrawals. The purchase of a very expensive property by someone who would appear to have little income would also put the bank on the alert. Banks, solicitors and notaries are required to be vigilant and although people can feel targeted by these questions you should not feel singled out. This is an attempt to reduce the crimes linked to money laundering and not a campaign against you.

An income report is also needed if you choose to become a resident of Spain. This is a new procedure and those who have lived here for a number of years will not have been required to show proof of income. Bank statements, pay slips, pension details can all be used as evidence if this is requested.

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Sign Title Deeds

And now we are getting towards the end of the conveyancing process. When you sign Title Deeds the property becomes yours and so begins your adventure in Spain. As with most legal formalities here, this is done in front of the notary. During the process the notary will check the identity of the seller and buyer, highlight any debts that there might be and confirm that community fees have been paid.

The notary will inform those signing of their legal and fiscal obligations following the sale and explain the sharing out of expenses between the two parties. You should not sign anything that you don’t understand or aren’t completely sure about. This is a formal and final document and from here on there is no turning back.

You do not have to go the Notary office yourself to sign the Title Deed. This transaction can be carried out using a power of attorney if you prefer.

Signing with a power of attorney

You might have taken out a power of attorney at the beginning of the conveyancing process or it might be the case that you haven’t needed one until now. Either way, the process of purchasing your own home need not be held up if you have difficulty coming to Spain for the final signing.

As mentioned before, you can limit the extent of the power of attorney (POA) and confine it to this process only if you prefer. The POA can be obtained either in Spain or in your own country. It is a relatively simply process to acquire and makes it much easier for yourself and your representatives to progress the purchase. Some people choose to obtain one even if they are able to be in Spain as it cuts down on the official engagements they have to make whilst they are there.

If you do obtain a POA in your home country then you will need to have an Apostille of the Hague. This is a stamp that is attached to the original document in order to confirm that the signature, stamp or seal on the document is the genuine article. The Apostille is obtained from the Foreign Office.

The Apostille came to be because of the need to have a standardised legalisation procedure between the countries who are part of ‘The Hague Convention of 1961’. It demonstrates the legality of a document issued in a different country. It is normally issued by the Foreign Office or the Ministry of Foreign Affairs.

There is another agreement called the ‘Agreement number 17 of the CIEC’ which has been signed by several European countries but these don’t include the UK, Ireland or Sweden. You might also be asked to have other documents checked for authenticity using an Apostille. Marriage certificates, birth certificates and court documents might also need to be verified in this way.

The translator

The translator

The POA needs to be translated into Spanish by the translator. This is not just anyone who can speak Spanish. They have to be specially qualified and registered for this purpose. They sign and stamp the translation to confirm its authenticity and that the official translation is an accurate and legal translation of a document.

In Spain, official translators are fully qualified by the Spanish Ministry of Foreign Affairs and they must have a proper licence issued by the ministry to have the authority to translate a document in the official format. An official translator is a qualified and licensed professional and you might need to engage one for a number of reasons.

For example, marriage, birth, divorce and death certificates might need to be translated. You may need to have a translation of school and university certificates or a medical certificate issued by a doctor. It is important that if you do require one that you get a recommendation as the service does vary in quality between translators.

If you are not fluent in Spanish it is important that you have a representative who speaks your language fluently. A good solicitor should meet your need for providing you with clear translations of anything you are signing. You might pay a little more for this service but it is well worth the cost if it means that there are no misunderstood clauses or hidden requirements.

Of course, this person will not be an official translator as such, but should be able to answer your questions and help you through the conveyancing process without anything being lost in translation.

Register at the Land Registry

Once the Title Deed has been signed then the next job is to register at the Land Registry that there is a change of ownership. If you have purchased your property without a mortgage you will receive the Title Deed when you do this. If you have a mortgage then the Title Deed and the Mortgage Deed will be kept with the bank.

The Land Registry (registro de la propiedad) includes the details of the registered owner of the property as well as any debts that are held against it. From the Spanish Land Registry you can get an up-to-date ‘Nota Simple’ which can be used to confirm ownership of the property.

This register is different to that of the Catastro mentioned earlier. The Catastro includes the official valuation of the property or the valor catastral which is used to calculate your IBI. For this reason, it is important to ensure that your solicitor checks both registers to check that the details on the two registers match.

You should also be aware that once you stop paying a mortgage on your property then the Land Registry should be informed so that this information can be removed from the Title Deed.

You should also inform the Land Registry of any extensions to the property and you will need to sign a new Title Deed. This is particularly important if the purchaser needs a mortgage to buy the property as the bank will not lend on a property that is not correctly registered.

In order to change the Title Deed you will need to be able to show a building licence and a certificate from the community of owners consenting to the building work that has taken place. If you do not have these you should apply retrospectively but cannot guarantee that permission will be given. Once you have these documents then the Title Deed and the details in the registry can be changed.

Water and electricity contracts

Water and electricity contracts

One further action that should be taken as soon as possible once you have purchased your property is changing the details on the water and electricity contracts. This can seem to be a minor issue but if you do not then you will have problems in the future if you ever wish to make amendments to your contract.

This could particularly be the case in relation to your electricity contract as there are different options that you can choose to get the best value. There are different tariffs that can help you save money depending on your pattern of use. For example, there is a night tariff when you can pay half the amount during the night. You can also choose your hours or select from summer, winter and weekend tariffs if you prefer.

Some properties are contracted to receive only a very low tariff and you might want to change this if you find that your power supply keeps tripping when you turn on a heating appliance. If you do want to increase your voltage then you will need to approach Iberdrola, the electricity supplier, directly and they will need to come out to your home and look at the viability of doing so.

Your water contract is less flexible as you pay according to what your meter says you have used. In some areas your water contract also includes the service for waste disposal. In others you are sent a separate bill for this.

Some solicitors will approach utilities and change the contract details on your behalf. In other cases you may have to do this yourself. If you do, you should take with you proof of the change of ownership, your passport and NIE.

Community of owners

The community of owners will need to be informed of the change of ownership. The community of owners (Comunidad de Proprietarios) can be found throughout Spain and organise and maintain services and areas that are common to the community. These include swimming pools, stair wells, garden areas and other community facilities.

They can be a very beneficial organisation who help to maintain high standards of appearance and care when it comes to your property. They have an annual general meeting when decisions are made and these are led by the community president in conjunction with the administrator.

However, it comes at a price. If you belong to a community of owners then there will be community fees to pay. Each owner is assigned a percentage (cuota) of the annual expenses and this is shown on the Title Deed of the property. The fees might be paid monthly, quarterly or at longer intervals and are used to pay for community expenses.

It is important to make sure that you pay your community fees as any unpaid debts will be held against the property and this will come to light when you wish to sell or during the inheritance process. A good solicitor will ensure that the community certificate of debt is checked at the Notary’s office.

You should receive notification of the Annual General Meeting and be invited to attend. It is usual to inform participants of the order of business and you will have the right to express your opinion and vote at the meeting.

The president and administrator will be elected at the AGM and the budget for the past and coming year approved. The Statutes of the Community are also approved at this time. If other business arises during the year it is possible that an Extraordinary General Meeting will be called.

Insurance

Insurance

If you have a mortgage on the property then the mortgage lender will have required you to take out some form of building insurance to make sure that their interests are covered. This may not include contents insurance unless you have specifically requested this and you will need to check that you are covered to protect your interests too.

Insurance in Spain works similarly to other European countries in that you pay a premium and claim if a problem arises. It is usually paid in one block as opposed to being spread throughout the year, although you can ask for other payment options.

It is beneficial to take photos of valuable items and to keep receipts if you can too. This will help if you do find you are in the unfortunate position of needing to make a claim.

Sometimes there is an option of taking out insurance with the water company against leakage. This is worth considering as water leaks in Spain are not unusual and, if they are past the meter and on your property you will be liable for any water that is lost. This can sometimes add up to thousands of euros.

If you are planning to live in Spain you might also want to take this opportunity to think about other insurances such as life or dental insurance. You will need to take out full private health insurance if you are not of statutory pension age, are not contracted to work here and are not self-employed. Of course, private health insurance comes at a price that can be very high if you have pre-existing conditions.

When you want to cancel your insurance you must inform the insurance company around two months before the renewal date and should put your intention to change in writing. It is unlikely that you will be able to change it if you leave it to a few days before the payment is due.

Taxes

As the final arrangements are made, your solicitor will ensure that taxes are paid for the property you are purchasing. These vary depending on whether you have bought a new property or whether it is resale. If you buy a new property then you must pay IVA (VAT) at 10% as well as stamp duty (AJD) at 1.5%. If you buy a resale property then you will have transfer tax to pay (ITP) at 10%.

Both new and second hand properties are also subject to Plusvalía. This tax is paid on the increase in the value of the land; the percentage decided by the local tax authority. This will vary according to location, the time that has passed since the last transfer of title and the size of the land.

The Plusvalía is legally the responsibility of the vendor. This particular tax has recently been in the headlines. Those selling property have argued that the economic climate has meant that rather than making a profit on the land sold, they are making a loss.

A possible tax that buyers should be aware of is that of complementary tax. This is a tax that is sometimes charged following a sale when the price declared on the Title Deed is below that considered to be the real value by the Spanish Tax Authority. It often takes purchasers by surprise as it can be issued anything up to four years after the purchase.

If you do receive a demand it is possible to appeal within a specified window and you should get in touch with a lawyer as quickly as possible. It is wise to set some money aside to cover the possibility of this tax and your solicitor should inform you of what it might be if you are sent a demand.

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Costs after the purchase

Of course, the purchase price of your house in Spain is not the only outlay. You must pay taxes on the property you have purchased and you will have a number of other costs after the purchase. The Title Deed is signed at the Notary and you will be required to pay Notary fees. The amount that notaries charge is prescribed by law and starts at around €800.

There are other legal costs to your purchase too. The Notary witnesses the signing of the Title Deed. This must then be inscribed at the Spanish Land Registry and the fee for this depends on the value of the property and usually starts at around €400.

You will also have your own solicitor to pay. They should have given you a cost estimate at the beginning of the process of how much their services will be.The solicitor’s fee might be worked out according to a percentage of the value of the property. However, there will be a minimum amount to be paid irrespective of the value of the house you are buying. The sale process is more or less the same whatever the size and value of your property and solicitors must take this into account when providing you with a quote.

There may also be other invoices to pay. For example, if your solicitor has had to obtain an NIE on your behalf or perhaps you needed a power of attorney as you could not be there in person.

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Taxes after buying

Congratulations! The property is now yours and you have settled the main costs incurred in buying a property in Spain. Some of this will have been the payment of taxes depending upon the type of property you have purchased. However, this is not the end when it comes to paying taxes in Spain. There are a number of taxes after buying that you will be subject to and need to be aware of.

IBI Council Tax (SUMA)

IBI Council Tax (SUMA)

All countries have different types of tax that you are required to pay to local and national government for the running of services, infrastructures and town hall administration. One that most people are aware of and expect to pay is that of local council tax. This is a tax that is paid directly to the local council for the maintenance of local services and is called IBI council tax (SUMA).

SUMA is the tax collection agency who are responsible for collecting this tax in the Alicante province. Depending on where your property is located in Spain, other organisations may be responsible or you are most likely to pay it directly to the town council. If your property is in a SUMA jurisdiction then you can organise to pay you IBI and some other taxes (such as road tax) online.

IBI (Impuesto Sobre Bienes Inmuebles) is a council tax that must be paid by every home owner and is collected at different times of the year according to the area your property is located in. How much you will pay is determined by the rateable value of your property or its valor catastral. It will also depend upon the tax rate charged by your town hall. This can vary enormously and is usually between 0.4% and 1.17%.

The valor catastral normally increases annually in line with inflation. Occasionally it is reviewed on an area-wide basis and this should take place approximately every ten years. Your valor catastral will change if at some time you do extension work to you property or enhance it in some way e.g. by building a swimming pool. Of course, where this increases so will the amount of IBI you have to pay.

Non-resident tax

Non-resident tax

In addition to IBI, non-residents must pay imputed income tax, if they don’t rent out their property and so do not pay rental income tax. This is based on the premise that as this property is a second home, you could rent it out if you wished. This tax is paid directly to the Spanish Tax Authority as part of your non-resident tax declaration.

The 31st December is the deadline every year by which time non-residents must have made their annual non-resident tax declaration. This applies to the previous year and is a relatively straight forward process for non-residents. It can be completed online or you can choose to pay a fiscal representative to do it on your behalf.

If you rent out your property throughout the year then you will not need to pay imputed income tax. Instead you pay rental income tax quarterly. The dates this is due are:

  • 20th April – first quarter (January, February, March)
  • 20th July – second quarter (April, May, June)
  • 20th October – third quarter (July, August, September)
  • 20th January – fourth quarter (October, November, December)

If you only rent out your property for part of the year then you will pay a combination of imputed income tax and rental income tax. The days when you pay tax on rental income are deducted from your overall imputed income tax fee. You must only pay this tax on the number of days when the property was unoccupied by tenants.

The amount you pay as a non-resident is dependent on the country in which you are currently a fiscal resident and not on your nationality. For example if you have a French passport but move to live in a country outside the EEC then your Spanish property will be taxed more heavily as a result. This also has implications for British passport holders when they leave the EU.

Income tax

Income tax

If you live in Spain then you will have to pay income tax on your world-wide income. You must make a resident tax declaration before the end of June each year. Payment of taxes in Spain is retrospective so when you make your declaration before the end of June 2018 it will cover the period from January 2017 to December 2017.

In some circumstances you do not have to make a resident tax declaration. If you only have one small pension, for example, you might not be required to complete it at all. However, it is still advisable to make a resident tax declaration as it records formally that you are a fiscal resident in Spain.

On your declaration you need to include all your world-wide income including any rental income, interest from savings, income from the sale of a house or any other asset. If you work in Spain you must also declare this income. However, if you are on a contract then there will be a retention on your salary and tax will be deducted monthly.

If you are self-employed (autonomo) you will pay your tax every quarter. When you make your annual tax declaration then it is determined whether you have paid too much or too little tax over the course of the year. This will then be adjusted and either you must make up the money or you may even get some tax returned to you.

If you have a civil service pension then tax will be deducted at source in your home country. However, you must still declare it in Spain. You will not have to pay tax twice on it but it is taken into account when determining your threshold payment.

Tax isn’t paid on all your income. Everyone has a basic personal allowance and this is increased in certain circumstances. For example, if you are over the age of 65, when you are 75 and if you have dependents. You are placed in a tax band and the percentage of tax you must pay will depend upon which band you come into.

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What now?

What now? Things to do in Spain

Buying a property is a huge responsibility whichever country it’s located in. However, it also has the potential to enhance your life significantly. Whether you have bought your property to live in permanently or as a holiday home, it should continue to prove its value every year that it’s yours.

Property in Spain is good value. You have such a huge choice to make between rural, town and coast; houses, villas and flats. The main problem can be narrowing it down to exactly what best suits your needs and fits into your price bracket.

There have been issues in the past with property that has been illegally built or where licences have not been correctly applied. These have, in a few cases, led to demolitions. However, Spain has made a great effort to put its house in order and these kinds of difficulties are much less common now.

Having said that, we still strongly recommend that those buying or selling a property in Spain get trustworthy advice from an experienced and respected legal firm. Always have any contract checked before you sign and make sure that someone is on your side to protect your interests.

So. What now? Your next steps will depend upon whether you are intending to live in Spain or visit. If you are living in Spain then you will need to secure your residency here through applying for your residencia, registering on the padron, applying for a SIP (health card) and changing your driving licence.

If you are only using your property as a holiday home then you must ensure that you have the correct insurances on your property and may wish to take out travel insurance to cover you for the unexpected. Other than just a little more paperwork, your main job is to familiarise yourself with your new home and its surroundings.

Spain is a vibrant country with a rich culture, a wealth of amazing architecture and, of course, some of the finest weather in Europe. Along with your property you have bought into a new lifestyle opportunity. Take time to do your research, explore as much as you can and, of course, enjoy your new home.

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