There are many issues that can arise when you come to buy a new house, so as everyone can surely comprehend, the issues aggravates when you are buying a house in a foreign country, with foreign laws, and specially in an area where sharks often dive in. As important as providing the required information for your mortgage, should you need one, it is to make sure you have pinpoint all the steps, hints and tips contained in this Guide as they are provided in your interest.
Use a good agent a good agent’s services are invaluable for helping you find the right property and negotiating a good deal. The Costa del Sol is a stretch of coastline that is over 218 km long, with a huge range of areas that present many interesting options for budget and style. The coast is also an international property market with vendors and purchasers from many different countries. Often the best deals are only available through the network of properties on an agent’s database: their skills, experience and contacts will also be extremely beneficial in helping buy and move in.
Before going any further in your research it’s important to make the following distinction.
The main advantage in buying a resale property is that you have the opportunity to see exactly what you are getting. The property is complete, the building standards and finishing is easy to assess, the community is (usually) formed and you have the chance to speak to neighbours and find out if they are happy living in the area.
The building boom of the last five years means that there is a huge variety of different forms of property available at the moment, and there are some excellent deals currently appearing on the market (see below).
Distressed sales occur through the owner no longer wishing, or being, able to afford the property and needing to get out immediately. Foreclosures by banks, divorce, death duties, etc, are all reasons for such a situation.
Resale properties are often sold with fixtures and fittings and sometimes furniture included.
There is little flexibility in the payment terms when buying a resale property, typically you will place a deposit of 10% of the sales price, sign a purchase contract and pay the final 90% when you sign the title deeds typically one or two months later. Therefore, if you are looking at a resale property you need to have your finances ready.
The property may require significant renovation and this will be an important factor to include into your budget calculations. The most popular renovation projects for foreigners in Spain are fincas (farm or rural properties) near to the major tourist destinations. Renovation is also very popular in town centers, especially old towns.
Purchasing off-plan is generally considered to be quite safe, as all developers by law must offer a Bank Guarantee to protect the client’s deposit money. The deposit is held in an escrow account and will be refunded should any problem occur that prevents development from being completed (read article: Buying Off-plan Property from a Developer: How the Law Protects You)
Provided you get in early enough it is sometimes possible to secure a property at a significant discount compared to the prices of the properties at completion. Upon completion, you also have a brand new property that has never been lived in.
Build qualities in Spain have generally improved over the last ten years with wider cavity spaces, better insulation, qualities and features as properties are now being built for year-round occupation.
Off-plan properties generally have interesting payment terms, typically 20 – 40% down-payment and with the rest to be paid on completion. Sometimes a smaller deposit and a staggered payment system can be arranged. This makes an off-plan property easier to buy than a resale property bought at the same price.
The down side to buying off plan is that you cannot assess the final qualities and views from the property until the project is complete. The development may deviate from the plans slightly or another development may be built in front of your property thus blocking your view. There are certain rights that you have to ensure that you get what you paid for (read article: Buying Off-plan Property from a Developer: How the Law Protects You).
By law all new build properties must be sold with insurance cover that covers the property for structural faults for the first ten years.
The off-plan property market was the main reason why so many people invested in Spanish property over the past ten years. Presently a potential investor has two options, he can wait until completion, pay the balance and then remarket while renting the property, or he can sell on his contract prior to completion of the property to maximise returns (read article: Sellers Guide to Spanish Property).
The main advantage of buying land from a holiday home point of view is that you have the opportunity build your own tailored property more cost effectively (read article: The Guide to Building your Own Property in Spain).
Frequently commercial property is referred to as a safe investment in a hot market. As resort areas become more popular, there is a tendency for the holiday seasons to spill over into the winter months and the number of people who are looking to live full time in the area and set up businesses inevitably increases.
Offices and shops are often rented out with a long term leasehold called a Traspaso for a fixed period of between 10 to 15 years. With this, the lessee pays a lump sum for a lease on a property and has the right to rent it exclusively for the duration of the lease at a lower rent than would be the case for direct rental.
Buying and selling property is not a cost-free exercise: in Spain, your purchase costs are between 10 and 12% of the property value at the signing of the title deed. Additional tax consequences through ownership should be planned for and you will also need to budget for maintenance of the property. (read articles: The Process of Reserving your Property and Taxes and Other Costs Associated with Owning a Property and Living in Spain).
Think carefully about buying a property overseas: if you are buying a holiday home you should also think of it as investment opportunity as you are not only looking for a location you will enjoy, but how it should increase in value over time. Once you have found the property you want we will be able to help you with the next step in purchasing, continue reading to find out how to buy in Spain.
We recommend that before you start looking at property you have a meeting with a Spanish lawyer to get a clear picture of the buying process, a buying strategy based on your personal circumstances and the costs involved.
Your lawyer will conduct a full background check to ensure that it is free from debts and liens, etc. This is one of the most important tasks that he will perform. In Spain the debt is carried by the property, not the owner, so you will be liable to pay for any encumbrances discovered at the point of sale, and thereafter.
The way this research is conducted will vary depending on whether you are buying a resale or an off-plan property. A resale property is a completed property that has a previous owner and a title deed (Escritura Publica), an off-plan property is still in the process of being built by a developer and hasn’t yet been granted a title deed. Buying a resale
Your lawyer will request a copy of the Nota Simple (a summary of the title deed) from the Land Registry (Registro de la Propiedad). This document shows any charges against the property, such as unpaid mortgages, or loans, or associated taxes.
Your lawyer will also request the following documentation from the seller:
The property’s Escritura Publica
The Escritura Publica describes the property, specifies the current owner, provides information about the location and records any debts or court embargos (the Nota Simple provides up to date figures).
The receipts for annual property tax (IBI: Impuesto sobre Bienes Inmuebles)
The receipts show if the tax (IBI, equivalent to local rates) has been paid. The receipt makes reference to the Referencia Catastral and Valor Catastral (see below).
The Referencia Catastral
The Referencia Catastral details the property’s physical description and boundaries. The certificate itself comes in two parts, one being a description in words and the other a graphic representation with either a plan or aerial photo. The document also quotes the Valor Catastral, the Spanish tax office’s (Hacienda) assessed value of the property used to calculate taxes.
The receipts for community fees
This assures you that the previous owner has paid all of the maintenance fees due. If the property is part of a community you become a member and you will incur any remaining debts.
Furthermore, it may be a good idea to get your lawyer to obtain a copy of the community statutes and the minutes of recent meetings. This will give you valuable insights into how the community is run, if there are any problems with the community and what are the rules and regulations.
When your lawyer has performed the relevant checks on the above documentation he will be able to advise you properly. If charges or encumbrances are discovered, he may advise you to negotiate directly with the vendor to have them removed from the sales price, or to obtain a written undertaking that the vendor will deal with the debts or problems prior to the signing of the title deed. Either way his work will ensure that you don’t get any nasty suprises while buying or owning the property.
Off-plan property is in the process of being built and finished by a developer and does not have a full title deed. Your lawyer will ensure the developer’s paper work is in order by checking:
Apart from these very important checks, your lawyer will also perform the following tasks on your behalf:
If you have a busy schedule and find it difficult to be available in Spain, the grant of ‘power of attorney’ allows you to empower a third party to do certain things (specified within the document) on your behalf. This includes the right to sign property title deeds or purchase contracts. Your lawyer is the ideal candidate for this as he or she is accountable to the Spanish equivalent of the Law Society and is under a duty to act in accordance with your instructions. The power of attorney document can be drawn up by your lawyer but must be signed by you in front of a public notary to make it legally binding.
Once the property has been checked and you are happy with the agreements, you move to the next phase of the buying process comfortable in the knowledge that future transactions should run smoothly.
The normal procedure in Spain is to reserve the property with a deposit, to give you time to gather the funds. Here is the typical breakdown for reserving and paying for off-plan and resale property.
6,000€ and sign a reservation contract to reserve the property for a time period of one month. Within one month you will pay 30% plus taxes (minus the 6,000€ you have already paid) of the agreed sales price and sign the purchase contract.
Once the property is finished and the terms of your purchase contract have been met by the developer, you will pay the final 70% plus taxes and sign the property’s Escritura (title deed) in front of a notary public.
To reserve the property you will sign the private purchase contract that agrees the terms and date for the completion of the sale and then pay 10% plus taxes, of the agreed sales price to the vendor’s lawyer’s escrow account.
Once the terms set in the purchase contract are met, you will be expected to pay the final 90% plus taxes and sign the property’s Escritura in front of a notary public.
The above payment structures are merely a guide, developers are commonly more flexible than this and resale scenarios are down to the negotiation between you and the vendor. For instance, a vendor may accept a reservation fee to give the buyer more time to prepare the finance required for the 10% deposit for the purchase contract.
On all reservation payments we advise you to pay directly to the vendor’s lawyer or to a bonded or escrow account that has been set up for this purpose. Always try to avoid paying the money directly to the seller.
The reservation contract is used as the standard format for reserving off-plan property for a specified period of time. Typically the contract describes the:
The Contracto de Compraventa is made between the purchaser and the vendor and sets out the terms under which the property will be purchased, such as:
The following points are specific to a purchase contract for an off-plan property:
All purchase contracts and reservation documents contain terms that set out the provisions for the sale of the property. Parties can draw up tailor-made contracts to suit their interests, inserting their own terms and conditions. These are valid and enforceable as long as:
If required an Arras or clause can be inserted so that if either party breaks the contract there are automatic penalties. This is usually the loss of the deposit on the purchaser’s side, and payment of double the deposit on the vendor’s side.
It would be a very good idea to have your lawyer translate your purchase contract into your language so that you have a dual copy and understand the terms and conditions described in the Spanish document.
One important point to note during the reservation contract phase for an off-plan property or a purchase contract for a resale is that it is a good opportunity to include a ‘subject to’ clause(s) to prevent the loss of your deposit money should you be unable to gather your finances. Your lawyer and sales consultant will be able to advise you and negotiate on your behalf.
It is quite possible in Spain for a vendor and a seller to come to a quick agreement and move straight to completion and the signing of the Escritura de Compraventa (title deed of conveyance) bypassing the previous two contracts.
When both parties are ready to complete the transaction, they and their lawyers will attend the Notary’s office to sign the escritura de comparaventa (title deed of conveyance). The notary will undertake his own search of the Land Register (Registro de la Propiedad) and see if there are any undisclosed charges on the property. He will then prepare the title deed of conveyance from the information supplied by the vendor and check compliance with Spanish Law.
The notary will then read the whole document in Spanish to you and the vendor, and you will both sign the deed. The balance of the final monies owed will be settled and the notary witnesses the vendors confirmation that he has been paid.
If you are buying off/plan it would be a good idea to have your lawyer check that the developer has registered the property with the Recaudacion Provincial (for future IBI assessment) in the Land Registry and has paid the tax.
The Escritura de Compraventa is then passed to the Tax office to be assessed for duty and then to the Land Registry for entry to the property register. Your lawyer will contact you once the Escritura Publica (the registered deeds that state that you are the legal owner of the property) is ready for collection (usually 2 to 3 months).
The contract prevents the developer from selling the reserved proeprty to a third party within the specified time frame. However, should you not be able to gather your finances in time, or should you choose not to go ahead with the transaction you will only loose the reservation fee.
There are over 300 days of sunshine a year on the Costa del Sol and average day time temperatures during the winter months are between 16 to 22 degrees Celsius. Parts of the Costa del Sol have a microclimate; Marbella and Almunecar are two such areas due to the natural protection afforded by the mountain ranges close by.
The Costa del Sol has three international airports: Malaga, Gibraltar and Jerez de la Frontera. Regular low cost flights are available from most of Europe’s major cities and journey times are between 2 and 4 hours depending on location.
The Costa del Sol is an area of coastline that’s approximately 200 kms long. There are a huge number of locations in which to have holidays or to live for longer periods. The areas of Marbella, Fuengirola, Sotogrande and Mijas have a year round tourist season and offer all the services and amenities you would expect in any northern European city. There is a huge variety of restaurants, shops, bars and night clubs available up and down the coast. The most exclusive of which are situated near Marbella and Puerto Banus.
Spain has a good state health care system and is free for people from European Union member states. There is also a good private health care system available and the cost is quite reasonable. The Costa del Sol has numerous public and private hospitals and most treatments are available easily.
Spain has a stable political climate and is a member of the European Union (EU) and in recent years has made enormous strides towards becoming a place where one can buy and sell property within a sound legal framework. The EU sets a benchmark for legal and administrative processes and also acts as the supreme legal power for court rulings.
Spain has benefited from ten years of subsidies from the EU, over one hundred billion euros has been invested in the country. In the Costa del Sol region, new roads, rail infrastructure, telecommunications networks, and a huge range of government-sponsored initiatives for local amenities have transformed the area from an underdeveloped coastal region into the exciting and vibrant location it is today. There are further plans in process, that include major improvements to increase the regions appeal for business and tourism.
The Costa del Sol offers a wide range sporting activities that give the area enormous appeal as a year-round holiday destination. These include all of the water sports including some of the best locations for kite surfing and wind surfing as well as fantastic skiing, hill walking, climbing, etc. There are also a huge number of clubs and societies to join, so whatever your interest you will find a group promoting it here with both foreign and Spanish members. Golf is a year-round tourist attraction especially during the winter months as there are an extra ordinary range of delightful courses. Some of the world’s most famous courses are located near Sotogrande.
The Costa del Sol has perhaps the highest concentration of luxury developments and individual properties anywhere in Europe. Building standards have progressed a long way since the 80’s. Recent legislation from the EU and the Spanish Government regarding building standards and Health and Safety has improved building qualities.
The Costa del Sol´s long history of residential tourism means that there are many Spanish and foreign companies available to help sort out legal and fiscal matters. It’s now very easy to find someone with good references to help manage your affairs who can explain the intricacies of any tax or law-related questions you may have.
Spain is a country with a long and diverse history, and Andalucia is full of interesting cities, monuments, galleries and sites of particular historic or ecological interest. There are a huge variety of places to visit that surround the Costa del Sol and Morocco and Portugal are also within a few hours drive if you want to experience something a little different.
The Costa del Sol is still a very safe place to live and it is still a pleasure to see people of all ages walking in the streets late at night, unfortunately a rare sight in most other areas of Europe.
Spain and particularly the Costa del Sol are similar in climate to California. It seems very likely that the coastal regions of southern Spain will experience very similar demographic shifts over the next two decades. Factors such as the large number of people approaching retirement age, good infrastructure and accessibility seem to suggest that people from northern Europe will continue to buy property over the long term. This strongly suggests continued development of the Costa del Sol’s tourism, business and real estate sectors.
The Andalusia Health Service (SAS) is an autonomous body dependant on the Junta de Andalusia Health Board. Its mission is to guarantee health care to all citizens of Andalusia. All Health Centers, Specialized Treatment Centers and Hospitals belong to the SAS. In Mijas there are three Health Centers situated in Mijas Village, Las Lagunas and La Cala and a recently inaugurated Specialized Treatment Centre called CARE situated in Las Lagunas. The nearest hospital for Mijas residents is situated in Marbella.
HOW TO REGISTER AND OBTAIN MEDICAL HEALTH CARE
For Residents:
On receipt of the letter of authorization sent by the INSS the residents have to take this, along with passport and copy or ID card and copy, Certificate of Registration of Residence and copy, to their nearest Health Centre where they will have to sign an application form to be included in the Andalusian Data Base of Users of the Medical Health Care System. (DBU). The SAS will register them and send them a Health Card (even though the card may take time to come, medical care is offered once you have signed the form and registered). The services offered to residents are: the Health Card, Medical assistance, emergency treatment, and subsidized medicine (free for pensioners and 60% off for everyone else)
For Non-residents:
EU members have to take passport or ID and Copy, and European Health Card or Form issued from home country authorizing temporary health care abroad (i.e. E-112, E-106) and copy and they will have to sign an application form to be included on the DBU (Andalusian Data Base of Users of the Medical Health Care System.
Non EU members will have to bring the certificate of right to medical health care for temporary periods issued from their country of origin. (Only Andorra, Brazil, Chile, Ecuador, Morocco, Peru and Tunisia have bilateral agreements)
Non residents will receive: Medical assistance during their stay in Spain, emergency treatment and subsidized medicine (free for pensioners and 60% off for everyone else). To qualify for free medicine it is necessary to be over 65 and to present an officially translated document proving the receipt of a pension.
Once registered on the DBU, it is very easy to obtain treatment. There is an appointment system that can be used either by phoning the number of SALUD RESPONDE (Health Care responds) 902 50 50 60 and they will give you the appointment or entering the web page of INTERS@S (type inters@s on internet searcher) You will need to state your identification number (the same one that you used when you registered), your date of birth and your name and surname. You can then choose the appointment you wish.
THE EMERGENCY NUMBER TO CALL IS 902 50 50 61
All foreigners under the age of 18 that are in Spain have the right to medical assistance in the same conditions as Spaniards.
Pregnant woman that are in Spain also have the right to medical assistance during the pregnancy, birth and afterbirth.
Although the major national banks have branches in all cities and most towns, each region of Spain has its own banks with branches in almost every town within that region. There are two types of banks in Spain: savings banks and regular banks. Savings banks do not have shareholders and invest in social and cultural projects. There is a nationwide network of savings banks recognizable by the sign saying Caja de ahorros.
The younger Spanish banks such as CAM or Cajamar tend to be more aggressive in giving out mortgages, so keep this in mind if you are looking to finance your property. If you are looking to set up an account try and pick a bank that offers a number of branches in the areas you are interested in buying in. Statistics say that you are more likely to get divorced than change bank accounts once they are set up, so having your branch on your door step will be convenient. Established or city branches tend to get very busy particularly at bill paying or tax declaration times during the year. Bear this in mind when choosing your branch as you can sometimes be left queing for hours.
Setting up a direct debit to pay monthly or yearly bills in Spain is an easy process. There is usually no contract required for payment for property taxes and running costs, or for water, electricity and telephone bills. All you need to provide is your bank’s name and sort code, and from that date forward you are directly debited for these services. This process also occurs with other regular payments such as your satellite television service. To stop a direct debit visit your branch and tell them you wish to cancel. You should also write to the company concerned.
Most Banks offer this service, but you will need to request the setup and authorization on your account. You will then be given an activation key card that will allow you sign in and transact.
You can order you debit or credit card at your branch. The cards will take about ten days to arrive. When you pick it up you will be given your PIN number. Your debit card gives you access to all ATMs in Spain. Bank charges for this service vary depending on the bank you are with and the ATM you withdraw money from. Keep an eye on this as these small commissions can mount up. Ask your branch which other banks offer the cheapest or free service for with drawls.
Ask your bank manager to give you a print out of all your direct debits and give this list to your new bank of choice. You simply open a new account and add your direct debits, then close your old account.
Ideally you should travel to Spain prior to moving, to investigate the different educational possibilities. If your child will be going to a state school you will need to be registered at the local Town Hall and bring in a copy of this registration, a copy of your child’s proof of immunisation, their transcripts from school, and a parent’s passport along with your child’s passport. As in British state schools, the catchment area is all-important, so having decided on your chosen school it is essential to ensure that your house (whether purchased or rented) is located in the correct area. Most schools prefer to interview prospective pupils, with exams being set in some cases to ascertain the level of Spanish attained.
Privately run schools come tailored to suit the needs of foreign. Many are bi-lingual and offer a curriculum parallel to that offered in the UK . Generally speaking, these schools tend to have a higher teacher to student ratio.
If you are considering Spanish state run schools, contact the Town hall in the area where you are planning to move. On the other hand, total immersion in the Spanish culture has its benefits. Children integrate into the Spanish culture quickly and they are state subsidised and provide a quality education.
The Spanish system of education is divided into three stages: ESO (Compulsory Secondary Education), BUP (the equivalent of British GCSEs) and COU (the Spanish version of the A level course). In addition, university applicants must complete the Selectividad, an entrance exam.
You can qualify for free health care in Spain if you or your employer pays your Social Security contributions. Social Security contributions will only cover 75% of the cost of most treatments received and you will therefore be required to either pay the remainder. If you are a tourist or non-resident, a registered European Health Insurance Card (EHIC) is sufficient for most emergency health situations in Spain. Dental care, other than emergency tooth extraction, is not covered and Private hospitals or doctors will not accept the EHIC. The treatment UK residents receive on temporary visits to Spain is equivalent to that received by Spanish nationals, and may vary from that offered in the UK.
The EHIC can be obtained online at www.dh.gov.uk/travellers or by calling (from outside the UK) 0044 191 203 5555. It is issued free of charge.
Repatriation due to illness is not covered by reciprocal agreements and private insurance is strongly recommended to cover such costs or to provide a choice of clinics or doctors.
Before you travel, always arrange travel insurance with health cover that is adequate for your destination. If you are unsure, talk to your insurer. The level of medical cover should be at least £1million for Europe. Take out a policy that has the benefit of a 24-hour emergency service. Serious accidents or illness will all be managed by the assistance company who will make any necessary arrangements, such as repatriation, and provide help and advice. No matter where you are going to travel, always check that your medical cover is adequate to meet whatever expenses you may incur. Always examine the conditions and exclusions of the policy and talk to your insurer if in any doubt.
Declare anything that you think might affect the cover, such as current or past medical conditions. Otherwise you may not be covered by your policy.
Sanitas is one of Spain’s largest private medical insurers, many expats sign up to this comprehensive service that covers a wide range of treatments. Rates vary with types of cover and age but are generally much cheaper than the private medical insurance in most northern European countries. To contact Sanitas call 902 102 400 there are English speaking operators to help with your enquiries.
Helicopteros Sanitarios are another private health care service but specialise in primary response cover. If you are in need of a doctor on call their 24 hour ambulance service is extremely good and quite reasonably priced. To contact Helicopteros Sanitarios call 952 816 767.
SUMMARY OF THE MOST IMPORTANT POINTS
NEW RESIDENCE LAW FOR EU MEMBERS
The new Residence Law for EU member was approved with the Royal Decree 240/2007 dated 16th of February and became effective as of the 2nd of April 2007
It applies to:
EU, EEE, and Swiss citizens
Family of EU citizens from third countries.
* Spouses (either of the same or different sex – the only countries that legalize marriages of same sex are Spain, Belgium and Holland)
* Descendants and those of spouse
* Ascendants and those of spouse
With the new law, this can also be applied to common law couples that have registered their union in their National Registry for Common Law Couples. (Spain does not have a National Registry for this).
THE RESIDENCE CARD DISAPPEARS.
As from the 2nd of April, EU citizens will no longer receive a Residence Card but a Certificate of Registration in the Central Registry of Foreigners that will be given to them immediately on applying for it. To apply for this you will have to present at the National Police Station:
· Application form
· Passport or National ID card (original and copy)
· Form 790 stamped by bank justifying payment of fee of 6.70 Euros
The Certificate will be issued immediately. It has an indefinite validity. If the applicant already has a residence card they will be issued with a similar certificate with the difference that on this one it will state that the holder is a PERMANENT RESIDENT. If you don’t have an N.I.E. number when applying for the Certificate, they will give you one automatically – you don’t have to make a separate application. In the Fuengirola National Police Station, they are now working with an appointment system that has eliminated the previous queuing method. You can get an appointment by phoning the number 952 19 83 55 or by going into the offices.
N.I.E. Numbers: Non residents in Spain still have to obtain an N.I.E. number (Number of Identification for Foreigners). They will have to have this number to carry out almost any transaction in the Country. The number is also obtained via appointment at the National Police and you have to take:
· Application Form
· Passport or ID card and copy (You will have to return to collect the number in approximately three days.
Family members from non EU countries will continue to be issued with a Residence Card as before and the documents that they have to present vary slightly. These applications have to be made after the 2nd of May to the Foreign Office of the Sub Delegation of the Government in Malaga. Appointments can be made on number 952 98 03 50. The card will take approximately three months. The first Residence card will be for five years and the renewal will be for ten. Contact them for more details of documents to present.
For EU citizens a Spanish residence permit is called a tarjeta de residencia. We recommend that you apply for your residencia using a gestor. A tarjeta de residencia cannot be denied to an EU citizen and generally takes one year from the date of application.
As a non resident tourist you will become liable for Spanish tax if you stay in Spain for more than 183 days per calendar year. The fiscal year in Spain runs concurrent with the calendar year. The 183 days are computed as a total, so it does not matter if your total stay has been made up of several smaller periods. This is spelled out both in the Spanish fiscal laws, as well as in the Tax Treaties signed between Spain and a number of other countries including Britain.
How can the administration know if you have been in Spain for more than 183 days now that passports are no longer stamped? If the administration’s suspicion is aroused, or if someone denounces you (reports you to the local authorities) for any reason, the burden of proof rests with you.
As a resident you must pay income tax on your worldwide income. If you choose to become a resident it is important that you notify the tax office in your home country in the correct manner to ensure you avoid double taxation. Double taxation is where you pay income tax in your home country and in Spain. Tax matters are generally very complex so before applying for your residencia we recommend that you take the time to speak to an accountant to ensure you receive the correct advice that suits your particular case.
The following is a list of reasons why it is sometimes beneficial to become a Spanish resident while owning or selling your property in Spain.
Capital gains tax on the profit made from selling a property is currently charged at a rate of 15% for residents and 35% for non-residents. In January 2007 this should change with the introduction of new legislation so that non-residents and residents will pay the same tax of 18%.
When selling your principal residence in Spain, you can reclaim or rollover the capital gains tax by purchasing a new principal residence within a certain time period. This opportunity is not open to non-residents.
When a non-resident sells a property in Spain, the buyer’s lawyer will retain 5% of the declared sales price as a guarantee for the pending capital gains tax liability (read article: The Spanish System of Capital Gains Tax). As a resident vendor you will not have this deduction.
As a resident you do not pay income tax on the notional letting value tax or the Impuesto Sobre la Renta(read article: Taxes and Other Costs Associated with Owning a Property and Living in Spain) on your principal residence.
Tax on renting your property is paid as part of your annual income tax return. If you are a non-resident, you are liable for an income tax rate of 25% for all the income you make on the property. Residents can take advantage of new 50% reduction of this figure.
Furthermore, as a resident, if you declare your rental, you can put down the maintenance expenses of your property as a business expense and deduct this from your tax bill. Maintenance charges include costs such as the mortgage.
As a resident you will receive a tax break 150,000€ on your Spanish property when making your Impuesto Sobre el Patrimonio or wealth tax declaration. If you jointly own the property with your spouse the tax break is doubled meaning that the first 300,000€ of your estate is not liable for tax. Non-residents receive no tax break.
Residents in Spain can have a tax break up to the first 3,300€ earned. People over the age of 65 receive a tax break on the first 3,900€ earned (for further information read article: The Benefits of Becoming a Resident in Spain).
Being a Spanish resident provides certain tax breaks that will be very important for immediate family during the succession of your estate in Spain. Immediate family members could save large sums of money by receiving up to 95% reduction in the taxable amount.
A person from an EU country who is resident in Spain, or from any country that has a bilateral agreement with Spain on Social Security coverage, and who is included in the Social Security system of his own country, may use the Social Security system in Spain, both as a tourist and as a resident.
If you are a non-resident living in Spain as a tourist you must apply for the E111 in your home country before arriving in Spain, and you will be covered for emergency situations by the Spanish health system. But, if you are a resident in Spain, you must have an E121 from your home country. You will then have complete health cover in Spain.
Other benefits of having a residence permit in Spain
The vote (based on the Maastricht Agreements for Union citizens and on bilateral agreements for Norwegians) in Spanish municipalities and/or European elections, is reserved for persons who have their main residence in Spain, and who are registered on the padron (electoral roll) in their municipality (council). Non-residents have no voting rights.
For many people, regardless of their nationality, the advantages of becoming a resident, seen from the tax point of view, outnumber any disadvantages. But always consult your financial adviser and or Spanish accountant to get a clearer picture of the full benefits.
Taxes and Other Costs Associated With Owning a Property and Living in Spain
The good news is that running and maintaining a property in Spain is generally much cheaper than doing so in northern Europe. Your payment obligations are listed below:
The Community of owners is a legal body set up to own and maintain the common grounds and buildings of the estate. Typically a president will be elected to ensure the smooth running of the Community, by law he or she must be an owner and serve unpaid.
Each owner within the estate is then expected to contribute to the running costs of the services that the community provides, typically these are things like security, repainting the buildings, ground and garden upkeep, building insurance etc. The budget for these works is set at the AGM and owners will approve the budget from a majority vote with contributions being set from size of the apartment or plot in proportion to the estate as a whole. There is no rule on how much community fees will be, but the more expensive the urbanization the higher the levy.
If you own a property in Spain you will have to pay tax. Tax is handled by the Delagacion de Hacienda (The Spanish Tax Office). The basic rules of residence are that if you spend more than 183 days per annum in the country you become liable to taxation, whether or not you make a formal application for a residence permit or not. In Spain it’s the individual’s responsibility to obtain the relevant tax form and calculate his or her own taxes, submit the form and pay the amounts due. To make life easier our advice is to appoint a Fiscal Representative (either a Spanish Accountant or a Gestor) as they will do the work on your behalf for a reasonable fee. In general tax law is bureaucratic and complicated, be aware that joint ownership of assets even between husband and wife are complex issues and you should examine these with your appointed accountant or Gestor.
This is the main property tax and is equivalent to local rates in the UK. Collected money is used to pay for local amenities and services, etc. The amount of tax is calculated by reference to the valor catastral (Ratable Value) registered in the tax office. The valor catastral takes into account the value of the land and buildings and reflects the position and use. Although in practice the value attributed is far less than the real value.
Properties are revalued every 10 years and the amounts valued increase annually according to inflation. Rates for IBI vary from area to area but typically are set between 0.2% and 0.4% of the valor catastral. The Spanish Government will be increasing valor catastral to keep it in line with current property prices, so although they are low at the moment, expect increases over the coming years.
Until recently this property tax has been rather overlooked by the Government; however it is starting to be enforced with the introduction of article 16 of the Spanish Income Tax Law, which specifically states that personal use of the property will be treated as income, notionally receivable on the 31st of December each year. This tax is based on notional letting value of your property and is applicable to non-residents and also to Spanish people with of second homes, but it is not applicable to commercial properties and land.
Notional rent values are set at 2% of the valor catastral value or 1.1% if the figure has been revised since 1994. This value is added to the income tax calculations for residents and collected at that time. For non-residents a flat fee of 25% of valor catastral is paid directly to the tax authority.
The return in respect of this notional income is made on a Form 214 (Impuesto sobre el Patrimonio y sobre la Renta de no Residentes), which is available from any local tax office.
You are obliged to file and sign a personal income tax return between May 1st and June 30th of the following tax year. For example, the tax return declaration due in May/June 2007 covers the period 1 January to 31 December 2006. Your accountant can help you with this, but the responsibility of finding out and presenting your taxes correctly is entirely up to you.
For non-residents the Hacienda (unless otherwise notified) is only interested in your activities that earn money in Spain. As a resident you are liable for tax on your worldwide income with rates starting at 15% and running up to 45% (these rates may be subject to change soon). The following activities are defined as income:
Non-resident property owners for tax purposes must still make an annual declaration for income tax. This information will then be declared to the British tax office but tax relief exists due to the treaty between Spain and the UK that resolves many of the double taxation issues.
Residents in Spain can have a tax break up to the first 3,300€ earned. People over the age of 65 receive a tax break on the first 3,900€ earned (for further information read article: The Benefits of Becoming a Resident in Spain).
Special Note: Any rental income arising in Spain is due under your annual income tax declaration. Recent government legislation requires tenants who make income tax declarations in Spain to list their landlord’s name and tax identification number on their income tax form.
Both residents and non-residents are expected to make a declaration of assets in Spain on an annual basis. These typically are property, car and bank balance. The value used when declaring the value of the home is decided either from the greater of the valor catastral or the acquisition price on the title deed. Mortgages and debts registered against the property can be deducted from the value. The amount of the bank balance is the average cleared bank balance over the previous year, this information is supplied by your bank. Residents have a tax exemption of 150,253€ for the residents home. So a jointly-owned property between husband and wife provides as much as 300,000€ exemption.
Typically in Spain for the first 167,129€ in assets the wealth tax is set at 0.2%, then 0.3% on the next tranche to 334,253€, 0.5% up to 668,500€ and so on up to a top rate of 2.5% over 10,696,000€.
Consumption of electricity and water is metered and the charges are roughly similar to those in the UK. Electricity is charged bi monthly and there are minimum rates applicable which relate to the potential power your property could use.
Your community fees should cover the building insurance, but not the costs of contents. Generally premiums for property insurance are not dissimilar to rates charged in the UK. There are many good companies, both local and international, that offer complete packages.
Some municipalities raise additional taxation for the services they supply in the area. These may include rubbish collection, cleaning streets and beaches etc. Municipalities also have the right to raise a charge for the use of a vehicle in the area although not all do so. These amounts are not usually high.
First and foremost, be aware that there are two different ways to rent your property in Spain:
This strategy is really only suitable if you are planning on renting you property for several years. The current law of Urban Lettings 1995 governs the rights of both parties in this scenario and as an owner it is very important to know that a letting contract for one year can be prolonged by your tenant for up to 5 years.
Tenants on a long-term contract have an automatic right to continue extending the period of a rental contract for up to 5 years unless:
Should you decide to sell the property during the period of either the long-term contract or the renewal your tenant also has the first option to buy (derecho de tanteo).
Be aware that any “unfair” clauses written into a contract are automatically null and void. So it does not help you as an owner to stipulate in the contract that the tenant renounces on his right to the automatically extend his/her rental period.
These form of rental contract are not governed by the 1995 Law of Urban Lettings (Ley de Arrendamientos Urbanos) and do not provide for the five-year automatic extension. The por temporada contract requires that the tenant vacate the property when the contract ends. You as the landlord then have the right to increase the rent and to choose whether to continue to let the property to the same person.
Important consideration: One important thing to be aware of is that even in a short-term let scenario where you have let the property for six to eleven months on a por temporada contract and decide not to renew the lease, your tenant may have a claim to forcibly renew the rental agreement and thus bring it under the provisions of a long term rental with the full cover of the 1995 Law. If he can prove that the property has become his main residence and particularly if he has a family (with children) the courts will probably decide in his favour.
The rent can be agreed freely between the owner and the tenant and it is normal that a deposit be paid. For a long-term rental the 1995 Law has established a deposit equivalent to one months rent, however it’s also quite normal to pay a deposit on short term rentals up to a year. The rent must be paid within the first 7 natural days of each month, meaning in advance, in the form agreed between the parties.
If the tenant wants to move before the end of the letting period agreed in the contract, he must communicate this to you and pay part of the rent for the remaining time, if this has been agreed in the contract. If the tenant only leaves the dwelling and stops paying, you have the right to sue him for damages.
There are many grounds for eviction in Spain, but to evict a bad tenant you must obtain a court order. This can take a long time (up to six months), so if you are planning on renting out your property for the long term or on a short term contract basis (over several months) ensure that you vet your potential tenant so that they supply a number of applicable references. It’s also extremely advisable that you register your contract with the Spanish Housing Department (and pay the small fee) which means that you will have full legal protection in the event of any court case.
Several changes to the law through new legislation will provide both tenants and landlords with additional rights. Local governments will provide special courts to fast track resolutions to rental disputes and hand out eviction orders, so expect many improvements in the sector over the coming year.
It is quite a common practice for non-resident owners of property, who let their properties out on a casual basis, not to declare the income to the tax office. Nevertheless income tax is due on any income arising in Spain. Particularly in light of recent government legislation that requires that tenants who make income tax declarations in Spain are now required to list their landlord’s name and tax identification number on their income tax form.
Tax on renting your property should be paid as part of your annual income tax return. If you are a non-resident you are liable for an income tax rate of 25% for all the income you make on the property.
Residents can take advantage of new 50% reduction of this figure. Furthermore, as a resident, if you declare your rental, you can put down the maintenance expenses of your property as a business expense and deduct this from your tax bill. Maintenance charges include costs such as the mortgage.
Due to the factors of oversupply it is highly likely that rental returns will fall in the short term (two bedroom apartments being most susceptible).However, we envisage continued strong demand because:
At the end of the day if your property is in a good location i.e. town center, beachfront, front line golf or conveniently located close to amenities with good community features, you will rent your property fairly easily. As mentioned previously there is now an oversupply of two bedroom apartments in certain areas of the Costa del Sol. However, supply for rental properties that are townhouses or villas is still comparatively low.
Here are some of the key points to Spanish Inheritance law:
There is currently confusion as to what may happen in the case of a death of a foreign owner of a Spanish property. Spanish law (Article 9 of the Spanish Civil Code) states that in case of a foreigner’s death (resident or non), the foreigners own country’s law should be applied in order to decide what should happen to their estate. The only legal requirement is that the according inheritance taxes are paid on the assets transferred.
Normally this means the UK Will and Spanish Will (which runs in accordance with it), are used to decide who benefits from the estate. However, if one of your principal inheritors (see below) decides to contest the provisions set out in the Will they will have a right to challenge in the Spanish courts and they will probably win.
If a foreigner dies in Spain without a will, his/her estate will be distributed according to the Spanish laws of succession, and as of yet the law does not recognize childless cohabitating couples. This can have very serious consequences as highlighted by the following scenario:
A partner dies and leaves no Will there are no children and they owned a property in Spain jointly. By law the estate is legally entitled to the parents of the deceased and not the other partner.
Let us assume that you have died and the only Will you have in place covering your assets in Spain is the one in your home country. Spanish law will look to your Will from your home contry, but your executors will still need to check with the Spanish Central Wills Registry in Madrid that no Spanish Will exists. The foreign Will is then taken as the main document for deciding probate, subject to the rights of the spouse and children. However, before the authorities accept the Will the executors must translate it through an official translator and provide copies of:
All of the above documents need to be certified for use in Spain by your countries foreign office with a Hague Apostle stamp.
A Spanish lawyer will also have to be appointed in order to prepare a certificate to prove to the authorities that the disposals in the Will are lawful and not in breach of the law. If the Will does not follow the Spanish scheme of dispersals then your direct inheritors (children or wife) can mount a legal action on the assets transferred under Spanish legal system, this could cause your intended beneficiaries considerable loss.
If you died as a non-resident in Spain then the executors should prepare a Power of Attorney to sign the inheritance documents and pay the associated tax for the beneficiaries. Your beneficiaries would need to collect together the money needed for the taxes and send it to Spain.
As you can see the associated processes are expensive & time consuming and the costs and taxes can even start to outweigh proportionally the value of the remaining estate.
Make a Spanish Will that runs in accordance and along side your own Will for your assets held in Spain. There are many very good reasons for considering this option. Your executors will be able to avoid a lot of the costs and red tape; you will also be able to make more complex arrangements for the disposal of assets including those not held in Spain. By separating those assets held in Spain under the Spanish Will and those in your home country under your national Will and by making the correct provisions in the latter, risks of inappropriate disposals are minimized and timeframes are greatly reduced.
If you rely solely on the Will from your home country, no action can be taken until the Probate of the estate in your home country has been settled, and with this taking some time your beneficiaries run the risk that the Spanish authorities will impose penalties if the deadlines are missed.
Make sure that if you follow this recommended ‘dual Will scenario’ that your Will doesn’t conflict with the Spanish one and that your lawyer hasn’t left in standard practice clauses such as one’s that revoke all previous Wills.
The process for going about and making a separate Spanish Will for your assets is simple. Your Spanish lawyer will listen to your wishes and will advise you as to how the Will should read in order to carry out your intentions. The Will is then made out in two columns; one will be Spanish and the other in your native language. The Will is then checked by the Notary and is signed in his presence and that of three witnesses. This is called an open Will, the notary keeps the original, the lawyer keeps an authorized copy and a notification is sent to the Wills Registry in Madrid. Typical charges are around 300€ plus IVA (VAT) for a couple.
Use a good agent a good agent’s services are invaluable for helping you find the right property and negotiating a good deal. The Costa del Sol is a stretch of coastline that is over 218 km long, with a huge range of areas that present many interesting options for budget and style. The coast is also an international property market with vendors and purchasers from many different countries. Often the best deals are only available through the network of properties on an agent’s database: their skills, experience and contacts will also be extremely beneficial in helping buy and move in.
1. Contact a Spanish Lawyer who speaks your language, if you do not have a lawyer we will be able to supply you with the contact information for our recommended solicitor. (read article: The Importance of Using a Spanish Lawyer)
2. Talk to a financial adviser if you are planning on moving to Spain to either relocate or retire. Our team will be able to put you in touch with a recommended specialist.
3. If you think that you require finance (read article: The Mortgage Guide ) then contact our offices and we will be able to put you in touch with our mortgage broker who will give you a good idea of what you can achieve.
4. Ensure that your personal finances are in order so that you have the liquidity or access to your money should you need it in a hurry to place a deposit.
5. Contact a company that specialises in money transfers (read article: Buying Euros to Pay for Your Spanish Property).
1. Apply for your NIE number. This is your tax reference number that is required before you can become an owner by signing a title deed. Application is easy, and it only takes a few weeks to be issued. (read article: Applying for Your NIE Number)
2. Ensure that you have adequate funds available in order to place a reservation on a property when you find something you like. Often a 6,000 € reservation on your credit card(s) will be sufficient to reserve a property, while your lawyer arranges all the paperwork for the rest of the deposits. Quite often people come to the Costa del Sol and find a property that matches their criteria rather more quickly than they expected. For this reason it is a good idea to have funds available to put down a deposit and not miss out on an opportunity.
3. Open a Spanish bank account to facilitate payment of fees for the property. Our team can recommend you a bank and introduce you to the manager.
Emergency contact numbers for lost/stolen card
These are the emergency contact numbers to call for lost or stolen plastic cards, including for banks and building societies. These telephone numbers are correct to the best of our knowledge. However, some telephone numbers may have changed.
Current accounts - lost or stolen cards or cheque books
UK: 0500 31 32 33
Overseas: +44 (0) 151 928 4033
Lost and stolen travellers cheques
UK: 0800 521 313
Overseas: +44 (0)1273 571 600
Abbey (includes Cahoot)
Lost and stolen cards (24 hour)
UK: 08459 724 724 option 3
Overseas: +44 (0) 161 951 6500
Allied Irish Bank
Lost or stolen ATM/credit cards
Ireland: 01668 5500
Overseas: +353 (0) 1 668 5500
Alliance & Leicester
Lost and stolen credit cards
UK: 0800 0688 638
Overseas: +44 (0) 1244 673 700
American Express
Lost and stolen cards
UK: 01273 696 933
Overseas: +44 (0)1273 696 933
Bank of Ireland
Lost and stolen cards (24 hour)
Ireland: 1890 706 706
Overseas: +353 (0) 56 775 7007
Customer Service (24hour)
Ireland: 1890 251 251
Bank of Scotland
Lost or stolen cards:
UK: 08457 20 30 99
Barclays Bank
Lost and stolen cards
UK: 0808 100 6667
Overseas: +44 (0)1904 544 666
Barclaycard
Lost and stolen credit cards
UK: 01604 230 230
Capital One
Lost and stolen cards
UK: 0800 952 5267
Overseas: +44 (0)115 993 8002
Citibank
Customer services
UK: 0800 00 55 00
Overseas: +44 (0) 207 500 5500
Clydesdale Bank
Lost and stolen cards
UK: 0845 606 0622
The Co-operative Bank
Lost and stolen cards
UK: 0845 600 6000
Overseas: +44 (0) 1695 53760
Diners Club
Customer service
UK: 0870 1900 011
Ireland: 0818 300 026
GE Capital
Consumer finance
UK: 0870 125 2515
Goldfish
Lost or stolen cards
UK: 0800 281 881
Overseas: +44 (0) 126 856 7402
Halifax
Lost or stolen cards
UK: 08457 20 30 99
HSBC
Lost and stolen cards
UK: 08456 007 010
Overseas: +44 (0) 1442 422 929
Lloyds TSB Bank
Card queries (24 hour)
UK: 0800 096 9779
Overseas: +44 (0) 1702 278 270
Marks & Spencer Money
&More credit card and chargecard
UK: 0845 900 0900
Overseas: +44 (0)1244 879 080
MBNA Europe
Lost/stolen card
UK: 0800 062 062
Ireland: 1800 409 511
Overseas: +44 (0) 1244 672 111
Morgan Stanley
Lost or stolen
UK: 0800 02 88 990
Overseas: +44 (0)123 672 5678
National Irish Bank
Ireland: 1850 700221
Overseas: +00 353 1638 5000
Nationwide
Lost/stolen credit cards (24 hours)
UK: 08457 99 22 22
Overseas: +44 (0) 1268 567 213
Lost/Stolen cards (all cards except credit cards)
UK: 08457 30 20 10
Overseas: +44 (0) 1793 456 789
NatWest Bank
Card Loss Centre
UK: 0870 600 0459
Overseas: +44 (0) 142 370 0545
Northern Bank
UK: 08705 168654
Overseas: +44 (0) 113 288 1403
Royal Bank of Scotland
Lost/stolen credit cards
UK: 0126 829 8929
Lost/stolen bank cards
UK: 0870 513 3550
Overseas: +44 (0) 131 317 8899
Smile
Lost and stolen
UK: 0845 600 6000
Overseas: +44 (0)161 477 1927
Thomas Cook
Travellers cheques
UK: 0800 622 101
Overseas: +44 (0) 1733 318 950
Woolwich
Open plan gold charge card
UK: 01604 230 230
Other open plan cards
UK: 0845 0700 360
Other Woolwich cards
UK: 0845 677 0009
Overseas: +44 (0) 1255 225 335
Yorkshire Bank
UK: 08456 060 622
Overseas: +44 (0) 113 2881403
Purchasing or selling a home is probably one of the largest financial transactions most people will make in their lives. While real estate transactions often go smoothly, there is no way to know what situations may present themselves when you begin the transaction. Having an attorney to protect your interests is a relatively small investment when you consider the problems which might be encountered and which can be avoided with competent legal advice. For the most satisfactory results, consult with an attorney who concentrates his practice in real estate transactions.
The purchase/sales contract is the document by which the purchasers commit themselves to purchase the home and the sellers commit to sell. It should contain all of the terms of the sale. Although some people use “form” contracts, almost every contract has its own individual provisions, which effect the rights and obligations of the purchasers and the sellers. Both should take great care to read and understand every provision in the contract. If there are any questions, the parties should seek professional advice.
Then, before signing any documents or depositing any money preparatory to entering into a real estate contract, purchasers should consult with an attorney or a Real Estate Agent of his choice to ensure that his rights are properly protected.
Most people have a general idea of how much they feel comfortable spending. It’s equally important how much the lender calculates you can afford. Evaluate your financial situation as the lenders do. Typically, your total monthly housing costs should not exceed 30 percent of your gross monthly income.
Ask how your lender determines the total monthly housing cost figure. It usually includes your mortgage principal and interest payments, property taxes and hazard insurance (PITI). Determine how much your financial institution is willing to lend you. Call on your sales associate for help during the prequalification process. Know how much you can afford in monthly payments. Lenders factor in sales price and down payment, but place more importance on how much you can handle monthly.
Because many people who buy a home from a builder are not represented by a realtor or an attorney, they often sign a contract without professional advice. The most important issue when negotiating with a new homebuilder is to insist on a contingency for attorney review of the contract. (A builder will usually agree to a reasonable time for this. If he is opposed to such a contingency, you should be concerned!)
Many homebuyers come to us after they have signed a new home contract. It is usually too late at that point to negotiate changes with the builder. Homebuyers are typically presented with a form contract and sign it, unaware that there may be pitfalls in the contract, which can be remedied by negotiation.
Some of the most common issues to consider when buying a new home are:
There are some taxes to have in consideration when buying a new house in Spain.
Also the buyer will be able to deduce as expenses the interests of the mortgage. On the other hand, and from the deed of transaction, the buyer will have to include like entry in the income tax return, the value that turns out to apply a certain percentage on the cadastral value of the house or on its price in deed if this last one were superior.
The mortgage is a legal document that secures the note and gives the lender a legal claim against your house if you default on the note’s terms. In effect, you have possession of the property, but the lender has an ownership interest (called an “encumbrance”) until the loan has been fully repaid. The lender agrees to hold the title or deed to your property until you have paid back your loan plus interest.
The down payment is the part of the purchase price that the buyer pays in cash and does not finance with a mortgage. The larger your down payment, the less you will need to borrow. The less you need to borrow, the smaller your mortgage payments will be. Lenders often view mortgages with larger down payments as more secure because you have more of your own money invested in the property.
The mortgage amount is the amount of money you borrow from a lender to pay for your house. The term is the number of years over which you can pay back the amount you borrow. The length of your mortgage repayment period will directly affect your monthly mortgage payments. For the same mortgage principal amount, you will find that the shorter your repayment period is, the higher your monthly payments will be, but the total interest you pay over the life of the loan will be less. On the other hand, the longer your repayment period is, the lower your monthly payments will be, but the total interest you pay over the life of the loan will be more. By extending payment over 30 years, you keep your monthly housing costs low. If you can afford higher monthly payments, you can select a mortgage term that is shorter.
During the term of your loan, you will pay back your mortgage by making regular monthly payments of principal and interest. In the early years of your loan, most of the money you pay will be for the interest you owe. Toward the end of the term of your loan, you will be paying primarily principal. This type of repayment method is called amortization.
Some mortgages have an interest rate that is fixed for the entire term of the loan. One advantage of a fixed-rate loan is that you know your interest rate will never change over the term of your loan. An adjustable-rate mortgage (called an ARM) has an interest rate that varies during the life of the loan. The interest rate with an ARM may increase or decrease based on market interest rates. Consequently, your mortgage payments may go up or down. Also called: Adjustable Rate Loans, Adjustable Rate Mortgages, Flexible Rate Loans, Variable Rate Loans.
When buying a house, you’ll want to define your needs, tastes and preferences. By discussing this now, you’ll save plenty of time in the house-hunting process. Your sales associate will show you only the houses that fit these requirements.
Describe the style of house you like, whether it be two-story, contemporary, ranch or something else.
List your priorities in home features, such as a two or three-car garage; gourmet kitchen; a family room or a formal dining room.
Think about your lifestyle. If you don’t like yard work, ask your sales associate to show you condominiums, townhouses or garden homes with smaller yards.
Bricks and boards may determine the cost of a home, but a neighborhood determines value. Consider the identity of the neighborhood; the overall impression given by an area is key to its value. Drive through and around the neighborhood. Valuee is enhanced by other well-aintained properties. Conversely, be cautious of areas with unkept yards and homes, and businesses mixed in with residences.
Ask your sales associate about the property tax assessment in the area, including any special assessments or pending bond issues. Pay attention to neighborhood zoning.
Good residential communities are zoned to keep out commercial and industrial users. Ask about other regulations in the neighborhood, such as on-street parking.
