If you are interested in buying a property in Spain or investing in a house it will be very important for you to be able to know the differences between purchasing in one country from another.
In first place, what are the similarities- The estate agents in Spain as in the United Kingdom, will help you find your new home, and the lawyers will do their legal searches as in the UK, then that’s where the differences begin.
The differences
Purchasing in Spain will require employing a bilingual lawyer, that, on the costa del sol is not very complicated to find. They will do everything for you, from protection your initial investment at the reservation stage by taking a deposit, all the way through to producing your copy of the title deeds. The legal fees in Spain tend to be 1% of the purchase price plus VAT. On the other hand, the solicitor’s fees in the UK are normally a set fee, independently to the cost of purchase that is normally between 500 and 1.500 pounds depending on the law firm.
Then we must analyze the tax costs, from one country to the other. In UK, you must pay stamp duty on properties costing more than 250.000 pounds, unless you are a first-time buyer, then you don’t pay stamp duty tax up until 425.000 pounds. On the other hand, in Spain, if you are buying a secondhand property on the Costa del sol independently to the cost of the property, you will have to pay 7% transfer tax of the purchase price, and 10% if you are purchasing a new build.
In England, it is custom to employ the services of a surveyor, to inspect the property in all its physical aspects, in Spain the services of a surveyor are normally only used when the property you are purchasing is a villa or a chalet, and very rarely when the property is an apartment or a semidetached house.
The valuation of a property in Spain is only done when the buyer needs a mortgage, whereas in UK, this is normally done consecutively with all property purchases.
When using the services of an estate agents to help you find the property , this will be a cost that in both countries is paid by the vending party, and the percentage charged differs tremendously from one country to the other as in the UK , the average amount is 1.18% of the price (and can be much more if in London), and in Spain can oscillate between 3-5% of the sale price.
Additional requirements when purchasing in Spain and there for adding costs to the purchases process are the following
N.I.E number
It is mandatory to obtain what’s called an N.I.E number (identification number for foreigners). This identification document is totally necessary to carry out any legal business in Spain and will be a valid and a unique number for the whole life of the person.
To obtain the N.I.E number it can be obtained either in person or through a power of attorney
And a Spanish Bank account
The opening of an account is not an indispensable requirement for the purchase of the property in Spain however it is very useful and practical to link the taxes and annual expenses along with the supply bills of the new house in a bank account in Spain.
If you are interested in purchasing a property on the Costa del Sol, do not hesitate to contact us. Our firm specializes in the real estate field, and we will guide you through the whole purchasing process ensuring that the property chosen is free of any charges and urban infringements.
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