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spain | property abroad
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Buying in Spain
Anyone wishing to buy a property in Spain must first obtain from the local government in person a fiscal number for foreigners known as NIE (numero de identification de extranjeros)
Once the buyer has received the NIE number, the buyer?s lawyers can make an offer on their behalf. When a price has been agreed, it is recommended that both parties sign a preliminary agreement which outlines details such as the completion date.
A deposit of 10% is the normal amount placed to secure the deal. After this, if the buyer pulls out they lose the full deposit but, should the seller decide not to go ahead, he/she must return double the amount of the deposit ? i.e. 20% - to the buyer.
If a property is purchased off plan, it is usual for payments to be broken into stages, the balance being paid when construction finishes.
On completion, when all the necessary checks have been carried out, both parties sign the escritura (title deeds) in the presence of a notary. The buyer then pays the balance, plus all other fees and taxes. Copies of the deeds are sent to the Land Registry and the tax office.
Average Property Prices
One-bedroomed apartment £117,000.
Two-bedroomed apartment £175,000.
Three-bedroomed villa £280,000.
Four-bedroomed villa £350,000.
Fees & Taxes
Taxes and fees usually amount to around 10% of the total purchase price of the property.
Taxes payable depend on whether the property being purchased is new-build or re-sale. Currently, transfer tax of around 7% is applied on re-sales, which includes stamp duty. For new-build properties, VAT(IVA) of 7% is payable in addition to 1% stamp duty.
On top of this there is also plusvalia (capital gains tax), which is set by the local authorities and depends on the area concerned and the amount of profit being made on the sale. This is usually paid by the seller.
If the buyer is purchasing land or commercial property rather than residential, VAT is 16% as opposed to 7%. Stamp duty remains the same.
Most Spanish lawyers charge around 1% of the final purchase price, and notary fees are around 0.5%.
Agents fees can vary anywhere between 2% and 15% - so be careful not to be ripped off.
Recommendations
The much-publicised landgrab scenarios are, for the most part, a thing of the past. However, it is vital that thorough checks with Land Registry are carried out, and the issue of title is made clear from the start.
Health
The Spanish healthcare system has improved dramatically over the last few years and generally has a reputation for being excellent. Even if you should choose at any time to go private for a specific problem, it will cost a fraction of what it would cost in the UK.
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Population 44,108,530
Capital Madrid
Languages Spanish(Castiilian), Catalan,Basque,Galician
Currency euro (EUR)
Exchange Rate £1 = 1.10 EUR
GDP growth 1.2% 2008
Main Industries Tourism, textiles, food and beverages and automobiles
The most popular holiday destination for Britons and Northern Europeans. The majority of destinations are around two hours away and there are plenty of budget fights available year-round to most regional airports. Charter fights can also offer good deals in high-season, especially to the Canary Islands.
