Why Spain? | Finding your Property | Financing your Purchase | Mortgages | Residency | Area Converter | Currency Converter

WHY SPAIN?

It is no surprise that the dream of an exclusive home on the sun-drenched shores of the Mediterranean has an irresistible appeal to almost everyone. Many people buy property in Spain for a variety of reasons:

PROPERTY INVESTMENT
Currently, the Spanish property market is very buoyant. Property prices have risen at least 25% in the last two years. More and more people are buying property as an investment where they know that they will get a secure return on their capital. In addition there are good opportunities and profits to be made in the property rental sectors. Spain boasts a continuous and stable property demand, property owners are offered favourable tax incentives and the costs are not as high as one might expect.

However, the reality is that when you decide to own a property in Spain, you are making a serious business decision as well as a lifestyle choice. It is clear that long-term happiness comes from making well-planned and wise investments for the future, and for this you need the best available advice in the market. You need a professional organisation which will listen to your requirements, answer your questions, and tailor the best solution to your personal needs.

The market has now shifted from a buyer’s to a seller’s market. In the space of a few short months the "sold out" signs have been seen on some of the most high-class luxury complexes. Property developers are building to order and selling off plan, as that is often the only way to secure a purchase. Waiting lists are commonplace for the new phases, with buyers being prepared to wait up to 3 year’s for delivery. Many developers have sales with closing dates far into 2007 and 2008 as the buyers insist on having particular floors or certain views. There seems to be no stopping for the moment with low interest rates.

Mortgages are freely available. Non residents can obtain up to a 70% mortgage with very little difficulty and residents even more. Some of the larger developers are now offering up to 80% over 15 years.

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FINDING YOUR PROPERTY

Having found your ideal property, you need to decide how you are going to finance your purchase. Is it going to be cash or a mixture of cash and mortgage?

You will want to be absolutely certain of the legalities of the process and particularly your rights in a foreign country. This is where Harringtons International will ensure impartial and expert assistance is given in guiding you through every step.

Most people would like to buy their property with a sea view, near the beach, shops and other facilities. It is useful to remember that properties close to resort fronts may also enjoy higher noise levels, higher running costs (e.g., community fees), and are often smaller and less desirable than many other 'non-front' properties. It pays to be flexible and to be prepared to compromise.

Maximum sun is between Los Cristianos and Callao Salvaje. Maximum breezes are between Candelaria and Golf del Sur. Temperature drops with altitude, with below 1000 m suitable for the warmest winters. The most peaceful areas are about 500-1000m back from the coastline.

Superb views normally come from tops of the hills, not on the sea front. The North is wetter, greener, cooler and more tranquil. The South is drier, sunnier, warmer and more lively. You need to have south facing terraces for sun all day.

Community fees - higher priced property may be cheaper over 5-year period. Garages and parking spaces close to properties are fairly scarce. Close to sea front properties in busy resorts can obviously be lively at night. Residential 'apartment block' buildings are often noisier than holiday complexes. People who enjoy tranquillity should not buy next door to Club 18-30 complexes for example.

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FINANCING YOUR PURCHASE

There are a number of ways you can finance your purchase over periods of up to 20 years. Since the lifting of exchange controls non-residents can now take out a mortgage on Spanish property.

Many leading international banks and former building societies now offer mortgage facilities on the purchase of Spanish homes. Depending on status and the value of the home, you can normally borrow up to 70% of the value of the property.

Most Spanish banks will offer mortgages to foreigners, but at a higher interest rate. Some UK banks based in Gibraltar will offer up to 65% as a second mortgage on your property in UK.

You may be offered finance by the developer of your chosen complex. There are dozens of schemes, and you should study each one with care. The contract should stipulate the down payment, count subsequent payments and state when the payments end. This will show you just how much the developer’s financing will cost you

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MORTGAGES

The four main sources open to you if you are taking out a mortgage are:-

1. Mortgage from an offshore holiday home loan specialist e.g. Bank/Building Society

2. Mortgage/Loan from a bank in your country of origin

3. Spanish Bank Mortgage, much easier if you are a foreign 'resident' of Spain.

4. Builder’s Mortgage, offered by some developers to increase sales on new complexes.

BANK ACCOUNTS

For foreign purchasers there are three types of bank account available.

1) TOURIST EURO ACCOUNT - If you are likely to earn euros, through letting or some other form of modest activity, you can pay euros into this account. On-going expenses can be paid using this type of account.

2) FOREIGN CURRENCY ACCOUNT - All transactions are made in foreign currency. Transfers however, can be made directly into the other two types of account.

3) FOREIGN CURRENCY DEPOSIT ACCOUNT - These accounts are for the deposit of foreign currency without conversion to euros. The funds are therefore freely convertible into other foreign currency and are outside the Spanish Exchange Control regulations. Interest rates vary from one currency to another. It is recommended that an account in Spain should be opened at the earliest opportunity.

MAKING PAYMENT

Full payment is required before the title deed can be transferred into your name. Please ensure that when transferring money to Spain the funds arrive in good time (normally it takes 7-10 working days) to enable the transaction to take place on the agreed date.

If you are buying a property under construction, follow the payment schedule in the contract, according to the stage reached. When buying a new property in foreign currency, beware of foreign exchange risk, you must ensure that all payments are registered through your Spanish bank, in order that the funds can be repatriated upon the eventual resale.

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RESIDENCY CARDS

All European Community Citizens can stay in Spain for 6 months without Residence Card. A person, who during any one year resides more than 6 months in Spain, either continuously or sporadically, must obtain a Residence Card. The Residence Card is applied for at the local Police Station. Residence Cards take from 2 to 6 months to obtain and meanwhile you will have your copy of the application form on which a provisional foreigner's identification number, N.I.F., will be shown.

The first Residence Card will be for two years. The successive renewals will be valid for five years.

REGISTRATION FOR RESIDENCY

All foreigners with Residence Cards are obliged to be registered, like all Spanish residents. For this they will have to present their Residence Card at the local Town Hall. Once obtained, the Residence Card will grant the same rights and duties as for a Spanish citizen. All persons who normally reside in a municipality have the obligation to register in the Census of that municipality.

ADVANTAGES OF BEING REGISTERED

Persons who are registered will be able to vote. If Spanish, to vote or stand in the local, national and European elections. If foreign, you will be able to vote in local and European elections.

If you need either medical assistance in the hospital, or to collect unemployment or pension payments, then you have to be registered. Also as a foreigner you will need a Residence Certificate to buy a car in Spain.

CONSULAR REGISTRATION

If you intend to remain in Spain for any substantial length of time, you should, in your own interest, register at the British Consulate in the province in which you reside as soon as possible after your arrival.

Failure to do so, may, in an emergency, result in difficulty or delay in your receiving assistance. Proof of your registration may be necessary when the time comes for you to apply for your Residence Card.

You should renew your registration annually thereafter, keeping the Consul informed of any change of address and letting him know when you intend to leave his district permanently.

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CURRENCY CONVERTER

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