Moving to and Living in Spain
FAQ's - Buying a Property in Spain
There are three standard off plan investment routes followed by our clients according to which type of return they are looking for:
Short-term - Quick Return
Medium-term - Longer Term Investment
Buy to Let (Maximum Rental Return)
However, it is important to stress that having committed to one route, it is notset in stone and can be changed at any stage of the process. (i.e. A short-term investor and decide to hold on to the property and turn it into a buy to let and vice versa)
Example:
Off-plan 2 bedroom, 2 bathroom apartment -200,000€
Current market value of completed product - 240,000€
Market increases throughout construction (15% = 1.5 years growth) 36,000€
Overall selling price - 276,000€
Capital invested - 60,000€ (initial payment including a deposit and 20% to 30% on signing of the private purchase contract)
Profit - 76,000€ (selling price minus purchase price)
126% Return on Investment or profit / saving if purchased as a home.
We recommend that you take advice regarding tax implications from a professional tax / financial consultant.
Why Invest on the Costa del Sol?
Over the last few years more people have been attracted to making the break and moving to coast either as a permanent resident, residential tourist and also to work. It was a relatively short time ago that the typical foreign resident on the Costa del Sol, would have either golf or retirement on their mind, today, this is not necessarily the case there are more young northern Europeans coming to work and live. The improved infrastructure and communications have enabled people to make that move to enjoy life in the sunshine before retirement.
The population of Málaga's beautiful coastal region will have doubled from 2001 to 2007. Last year, more than 52 million people visited Spain as a tourist and it is predicted that over the next 3 - 5 years there will be more than 3 million non-Spanish families relocating to Spain.
At Spanish Property World we understand that investors are looking for the best property developments, whether it be for a dream home, luxury villa, off plan apartment, rustic finca or simply a buy to let investment property. Our researchers are constantly striving to identify the future ´hot spots´ in order to give our clients the advantage of the best advice possible to ensure a perfect home in the sun and the best returns on your investments.
The Costa del Sol has proven to yield the highest rental return throughout the entire country, including the Canaries and Balearic Islands. There is a high year round demand for accommodation for golfers, long-term residential property for workers and also buyers still searching for their perfect home in sun, however it is the high season rental market which will yield the highest rental returns.
Property Types in Spain
Apartment - all on one floor in a building with at least 3 floors
Townhouse - terraced house with at least 2 floors (does not have to be in the town)
Chalet - detached or semi-detached property
Villa - detached or semi-detached property, generally in own grounds with own swimming pool
Duplex - apartment spanning 2 floors in a building of at least 3 storeys.
Penthouse - apartment or duplex on the top floor of an apartment building.
What is a Gestor and do I need one?
'Gestor' is specifically a Spanish phenomenon and is essentially an agent (fiscal representative) who will deal with all the necessary bureaucracy associated with living in Spain for a reasonable fee. The 'Gestor' is not a lawyer, but has knowledge of the procedures, taxes and fees payable and can save you the time and frustration of dealing with potentially complicated systems, and just as importantly, ensuring that no fines are incurred for non-payment of taxes that you were not aware of.
What is a Spanish Notary Public?
Although the Spanish Notary Public (notario) is a lawyer, their job is strictly to witness the signing of the title deeds and to ensure that all liable taxes are paid on the completion of the transaction. Any legal advice required by the vendor or purchaser must be obtained from a separate lawyer.
Notaries are paid both the vendor and purchaser. They are charged on a sliding scale set by the Spanish government, which vary depending on the property price and the amount of work in preparing the documents.
Prior to preparing the deed of sale (escritura), the notario makes sure the property and price are correct and will also advise of any taxes, which are due on the property.
When the deed of sale is signed both parties should be present and if not, a nominated power of attorney (poder especial) to represent them and will be witnessed by the Notario. (Of course this will incur and additional cost of 40€ to 100€!)
Having signed the deed of sale and the purchase price has been handed to the vendor, the proof of payment is noted in the escritura which is then registered with the local property register. Non-residents will need to relinquish 5% of the purchase price to be paid as Capital Gains Tax.
After the signing of the deed of sale, all payments and fees have been paid, a copy (compia simple) of the document and the keys will be handed over to the purchaser.