Tips to Buy Property in Spain
It is becoming more common for people in Europe to buy property in Spain. These are generally used as vacation homes for part of the year. Some people rent the property for part of the year, when it’s not in use. The market has been very good for real estate in many areas, particularly the Costa Blanca.
Things to Know When You Buy Property in Spain
The first thing you should do when searching for a home in Spain is to find a reputable real estate agent. You want someone who is registered and experienced. Unscrupulous agents have been known to exploit foreign buyers who may not understand real estate laws in Spain. Learning to speak Spanish is a good way to understand and communicate effectively.
Be sure to hire a lawyer to assist you in your purchase. An attorney will go over the contract, mortgage information and protect your interests in the sale. A Spanish lawyer will be well acquainted with the laws involving real estate transactions.
A real estate agent may recommend a lawyer. It’s better to get a lawyer independently to be sure he is working only for you. A friend or neighbour may be able to recommend someone for you.
In some cases, the seller may ask you to put a reduced price in the contract and pay the difference in cash. The reason for this is the seller wants to pay less in capital gains taxes. Keep in mind that this practice is illegal and is considered tax evasion.
While this may not seem like a problem, keep in mind that you would be paying more taxes later, in the event you sell the property. If you sell, your capital gains tax will be based on the purchase price and your selling price. This may cost you a significant amount more in capital gains taxes.
Taking a Mortgage to Buy Property in Spain
Unless you are independently wealthy, you will probably need a mortgage to purchase your vacation property. There are a variety of different mortgage types you can get for purchasing your new home. Take the time to research your options to get the best deal.
An International Mortgage can be found with a lender in your home country. Larger mortgage companies generally offer mortgages to people interested in purchasing properties in other countries. These are generally offered for a second home when you already own a home in your country. In general, you can finance 70 percent of the purchase price with a 30 percent down payment.
Second mortgages are a popular method for buying a holiday home. This is a good option if you have significant equity in your primary residence. With a second mortgage, you are borrowing against your primary residence to fund the purchase of your home in Spain. Your home is the collateral. Make sure you can afford the payment, interest and taxes.
A Spanish mortgage is offered by a Spanish company to non residents looking to purchase property in the country. These are generally offered by larger banks. Be sure you understand the terms and conditions of the loan. This is easier if you speak the Spanish language. A lawyer can also help you understand the terms of the loan. Compare interest and fees here with lenders in your home country.
Once you have researched your options and understand the differences, you will be ready to choose a lender. Decide which avenue of funding you will pursue. Then you are ready to begin your search for a lender. The internet is a good way to compare lenders and loans.
The collaborator Peter J. Mason is especially interested in areas dealing with Spain and spanish culture. His comments on buy property in Spain can be found on http://www.alicante-spain.com
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