How to Buy New Developments in Spain This 2019
Understanding what to expect when making your deals can help you avoid the pitfalls of setting up your life in this country. The only things you need to have in mind when purchasing new developments in the Spanish real estate market include high capital gains tax, property scams and the fluctuations in the current market.
The Spanish Real Estate Market
Spain was affected by the financial crisis that resulted in the property market crash with the house prices dropping by 30 per cent. But since then, there have been many developments in the country’s real estate market, and there are still signs that the recovery is underway with the indices indicating year-on-year price increases in the major cities and resorts.
Also, the transaction numbers, as well as homeownership levels, are increasing in Spain with around 80 per cent of residents owning their homes and most of them doing so without a mortgage.
How to Purchase New Developments in Spain
Purchasing new build houses for sale Marbella or any other part of Spain can prove to be a straightforward affair. However, things can easily go wrong for you if you blunder into a deal without any knowledge of the current real estate market in Spain.
It means that you need to do thorough research before making your decisions. Buying a new development in Spain will be easy for you if you work with the right experts and take one step at a time. Here are the steps to purchasing new developments in Spain.
Do a Good Research
You are out in Spain, you see a perfect house, and you feel like putting in an offer before going back to your home. You should stop since this is where most individuals make mistakes. In some cases, impulse purchases can work well for you, especially when it comes to odd items such as gifts and clothing.
But when talking about an investment like a house, it is not an excellent idea at all. You should take your time to check the entire area, putting into consideration all your needs and requirements not only now but for the many years to come. Rushing into property purchases is probably among the main mistakes that most individuals make when looking for new build houses for sale Marbella.
If you are planning to purchase a property in Spain, you should also consider whether you want to buy new developments, off-plan or resale property. Purchasing a new property off-plan can often lead you to better deals and prices. But buying resale properties can be safer for you since there are surprises. The property for resale will already have a good history, and any issues may have been solved already.
You should not attempt to make any property purchase without the legal representation. The entire process is challenging, and you could easily miss something essential or make costly mistakes. Experts in Spain recommend that you should work with the right legal professionals to provide you with the information and support you need before making your decision.
You should look for reliable experts to help you go through every legal step. They should be in the position to understand your financial status, help you know the native language, explain the entire process and the associated costs and be available anytime to offer advice and answer questions.
Complete Property Checks
You should ensure that correct property checks are completed on time including the legal status of the properties, the property’s fee of debts and charges, community and utility fees payment and correct planning permissions as well as licenses for the improvements. Your solicitor should help you check all these and remember to ask for confirmations that the checks have been completed.
Sign the Private Contract
At this point, you will need to pay reservation deposits and sign an offer contract. This process will help remove the properties from the current market and enable your lawyer to do the checks without the risks of someone else purchasing them. The deposit is approximately 6,000 Euros, and it is refundable.
After getting the approval from your solicitor that everything is perfect for you and you can proceed with the deal, you will need to sign the private contract. When signing the contract, you should understand that it isn’t logged with an official registry and it is considered binding. Also, ensure you go through it before signing.
Obtain NIE Number
During the process of purchasing new developments Costa del Sol and other parts of Spain, you will need to look for the NIE number if you do not have one. The NIE shows that you are already registered with the current Spanish Tax Authorities. You must apply for NIE at the National Police Station or the Foreigner’s Office. If you are not in Spain, you can obtain it through the Power of Attorney.
The Title Deed
In Spain, the signing of a title deed is usually done at the notary office and in front of a notary. During the signing process, you will need to pay the balance before receiving the keys to the new home. At this stage, you should ensure that you have a copy of the document known as Copia Simple. In case you have taken a mortgage for your property, then the financial institution will retain the document until you clear your loan.
Register at Land Registry
After signing the title deed, you will need to register your property at the Land Registry offices, and the utility firms should be informed of the changes including the names.
Pay Legal Fees
After registering your property at the Land Registry, you will need to pay the legal fee at this point. In most cases, the fee is included in the price of the property, however, you should request for a detailed receipt so that you may understand what you are paying and the reason why you are doing so. Make sure you have the original invoices for all the transactions, including notary fee and taxes.
It is essential to make arrangements on how to pay the taxes after completing your property purchase in Spain. The amount of tax you will pay depends on whether you’re a resident or non-resident. Both non-residents and residents must pay the IBI Council Tax. But, non-residents will need to pay the imputed income tax in the country. After paying the taxes, the next thing is to enjoy your new life and property.