Info For Property Buyers In Spain

 

 SAVE THOUSANDS IN COMMISSION

 
Save thousands in commission when buying a property in Spain You can now buy directly from the owner via FSBO-Spain.com.
 

This premier site is the first stop for anyone looking to purchase a bargain home or investment in Spain.  FSBO-Spain.com do not ever take any commission therefore you will save thousands of euros when

purchasing a property you see on FSBO-Spain.com

 
You can be sure that if you buy a villa, apartment, finca or business via the FSBO Spain website you will be buying at the owner’s price. There is NO COMMISSION added to any of our Spanish Properties. We do not include commission in the seller’s price and call it something else. If you are looking for a cheap property in Spain or cheap investment in Spain, you have come to the right place. You will find Villas, Apartments, Fincas, and Bungalows throughout Spain.
 
FSBO Spain are a sophisticated For Sale By Owner company. Buyers can have direct contact with the owner as if it were a private sale by the owner. When viewing properties you are welcome to speak directly to the owner and negotiate with them on the price.
 
Buying property in Spain - the legal formalities
 
In most cases buying a property in Spain can be quite a straight forward process - if you use a good reputable lawyer - they should follow these steps to make your purchase an easy and trouble free one.
 
Town Planning (Plan General de Ordenación Urbana) - Check withthe Town planning departament (Departamento de Urbanismo) of the Town Hall about if any major developments are planned in the property area and if them could affect the property.

Planning Permission (Permiso de obra) / Building Permit (Licencia de Obra) -If you are buying a new or recently constructed property you must make sure that the construction that has taken place has been authorised and that it was undertaken in accordance with the plans approved. If you are buying a property in the course of construction the Seller must be made to produce proof of these permits.
 
Certificates of the termination of the building (Certificado de fin de obra) / Licence of first occupation (Licencia de primera ocupación) - Another important check to make because if the building does not have these certifications - you may run into problems registering the property and also the council could sanction you with a fine or could order the demolition of the building.
 
Bank Guarantees - By Spanish law (Article 1, Ley 57/1968, de 27 de julio, Reguladora de las percepciones de cantidades anticipadas en la construcción y venta de viviendas) any property sold to you in the course of construction must be accompanied by a bank or insurance guarantee to protect you against the risk of the seller going bust or, for some other reason, not being able to complete the construction and delivery of the property.

Reservation Contract - It is a written document in which the seller offers to take a stated property off the market for a fixed period and to sell it at a stated price to a stated person at any time within a stated period. The seller will usually require that the potential buyer pay him a deposit. Once he has received this deposit the seller must reserve the property for the buyer until the end of the period specified in the contract.  
 
If the potential buyer does not go ahead they can lose the deposit. If the seller refuses to go ahead the buyer is entitled to claim compensation.
 
Full Contract. “Contrato privado de compraventa” - A full, binding commitment to buy the property & an agreement that commits both parties. The seller must sell a stated property at an agreed price to a stated person as the terms set out in the contract. Remember that under Spanish law by signing and completing this contract you become, in some senses, the owner of the property, though you will need to sign a deed of sale (escritura) and register your ownership to be safe as far as third parties are concerned.
 
Most contracts will include that:
  • - The seller and buyer should both be stated fully
  • - The property should be described fully, both in an everyday sense and by reference to its land registry details
  • - A date for the signing of the deed of sale (escritura) will be fixed or the contract will permit either party to require the signing of the escritura at any point by giving notice to t the other
  • - A statement will be made as to when possession will take place – normally, on the date of signing the title
  •  
  • - The property should be sold with vacant possession
  • - The property should be sold free of any charges, debts or burdens and all bills should be paid up to date before signing the escritura
  • - Who is to pay the costs of the purchase
  • - It may confirm the details of any agent involved and who is to pay their commission
  • - What happens if one or both of the parties break the contract
  • - It will establish the law to cover the contract and the address of the parties for legal purposes
  • - It is very usual to include in the “Contrato privado de compraventa” an “arras” agreement that it is a special deposit payable by the buyer. If the buyer fails to complete he will lose the deposit (normally a 10% of the purchase price). If the seller fails to complete he will have to return double the deposit paid. If the parties fail to comply with their obligations there is the ultimate remedy of seeking a court order.
  • Deed of Sale (Escritura de compra-venta) - This is the title document proving who is the owner of the property and containing a detailed description of the property itself. It is, under Spanish law, necessary for the Escritura to be signed before a Spanish Notary Public.
 
The Notary is a public official who put on the public record the fact that the title deed recording the sale/purchase has been signed in his presence and understood by the parties concerned. The function of the Notary is not to advise or to protect either your interests or the interests of the person selling the house. When the Escritura is signed in front of the Notary the purchase price must be, in his presence, handed over to the person selling the property or the seller must confirms that the money has already been handed over. Proof of such payment must be then incorporated into the title deeds of the property.
 
Do I have to be in Spain to complete the transaction? - The buyer and the seller of the property may attend in person in front of the Notary, but, if this is inconvenient, most lawyers can attend on their behalf if one of both provide Power of Attorney.
 
Where must the money be paid? - The price, together with the taxes and fees payable, is usually paid by the buyer to the seller in front of the notary. This is the best and safest way. You can, in fact, agree to pay in whatever way and wherever you please. In the case of a seller who is not tax resident in Spain the buyer is obliged to retain 5% of the price and pay it to the Spanish Tax Administration (Agencia Tributaria) on account of the seller's potential tax liabilities.
 
Fees and Taxes - In Spain when a property transaction takes place, as in any other country taxes and fees have to be paid at completion. Failure to do so means that registration of the Escritura at the Property Registration cannot take place.
 
Notary's fees - The Notary's fees for the execution of the Escritura are fixed by a sliding scale established by law. In accordance with the article 1.455 of the Spanish Civil Code
Land Registry's fees - For the registration of the Escritura at the Land Registry, again a sliding scale is applicable dependant on the purchase price. In accordance with Spanish law the Land Registry’s fees must be paid by the seller.
 
Transfer Tax or VAT (Impuesto de Transmisiones Patrimoniales (IVA) - If the seller is a private individual and not a property developer, the sale is subject to a transfer tax (“Impuesto sobre Transmisiones Patrimoniales” – ITP) at the rate of 7% (“Comunidad Autonoma de Murcia” and “Comunidad Valenciana”) levied on the purchase price as declared in the Escritura (Article 11.1.a) LITP-AJD). If the seller is a company or developer, the sale is subject to a VAT (“Impuesto sobre Valor Añadido” - IVA) at the rate of 7% (Article 91.1.7º LIVA) will be levied on the purchase price plus a stamp tax at the rate of 0,5 or 1% (Article 31.2 LITP-AJD)
 
Plusvalia Tax (Impuesto sobre el Incremento del Valor de los Terrenos de Naturaleza Urbana) - This is a municipal tax on the increase in urban land value; The Plusvalia is based on the assessed increase in the official value of the property from the date of the previous sale to the date of the current sale. The amount payable varies widely since it is based upon the assessed increase in the land's value and the lapse of time since the prior transaction. The amount payable also depends on the location of the property and the applicable scale. In accordance with Spanish law the Plusvalia Tax must be paid by the seller.
 
Capital Gains Tax - Capital Gains Tax must not be confused with the above-mentioned Plusvalia Tax. Capital Gains Tax is not based on the official value of the property like the Plusvalia Tax, but on the real value. The Capital Gains Tax is based on the increase in the purchase price and the sales price.
 
In order to guarantee that non-resident sellers pay this tax, Spanish law (Article 24.2 LIRNR) now provides that in the case of a non-resident seller transferring a property located in Spain, the purchaser is obliged to withhold 5% of the purchase price on account of the sellers potential tax liability and deposit this retention in the tax office. Restitution by the tax authorities of the whole or part of the 5% will take place after the seller has declared and paid the tax. Clearly, the Capital Gains Tax falls on the seller. However, if the buyer fails to retain and deposit the 5% of the purchase price and the seller does not pay the amount due, the tax authorities can levy this sum on the property. It is essential that any buyer always deduct 5% of the purchase price when buying.
 
Once all the above obligations have been complied with, you will be the true owner of your Spanish property.
 
Registration in the Land Registry - The signing of the Escritura de Compraventa transfers the ownership of the property. However, the Escritura alone does not guarantee your title to the property. To be enforceable against all other persons the Escritura must be registered in the Land Registry. This must be done immediately after its execution. uble free one
 
Community of owners ( Comunidad de Propietarios) - the legal department resposible for the payment of community expenses such as pool, gardens, security, rubbish collection etc. These must be up to date & the seller will be asked to privide receipts to ensure all is paid up to date prior to purchase
 
Water supply - Again the seller must be up to date with payments as supplies can be cut off if not and you wil be obliged to pay any outstanding fees
 
Electricity, telephone & gas - The same as above
 
Real estate tax (Impuesto Municipal Sobre Bienes Inmuebles I.B.I) - Levied on the offical assesed value of the land & construction. Although you start paying from the date of the purchase, it is essential to check whether the receipts for the proceeding four years have been paid by the seller up-to-date. If not, you will be responsible for any outstanding sums.

Property Register protects the interests of the owner and third parties. The complete history of any property can be found in the Property Register and any title or right or charge which may exist against a certain property can be inspected. It is not recommend to buy from someone who is not registered as the owner at the Property Register because only the owner registered at the Property Register can prove that he is the legal owner of the property and only he can guarantee to transfer the property to you as the legal owner.
 
If this is not the case you can ask the Property Register for a certificate “Certificación Registral” or an extract “Nota Simple”, that shows all previous transactions and indicates who is the legal registered owner of a property and whether the property has any charges as "hipotecas" (mortgages), "censos" (ground rent or leasehold payments), "usufructos" (interests in the property), "limitaciones" (restrictions on use), "multas" (fines), "cláusulas resolutorias" (determinations, i.e. decisions about the future of the property), or "embargos" (court orders for distraint or seizure).
 
Catastral Certification (Certificación catastral) / Partial Plan (Plan parcial) - is very useful to know if the description of the property which is recorded in the Land Registry is exactly the same that the description recorded in the Town Hall. Checking the Partial Plan ensures that 
 
 
We have a wide selection of property and businesses in Costa Blanca Spain which include apartments, bungalows, beach properties, country homes, villas, townhouses, fincas, businesses, bars, restaurants, franchises and business opportunities. If you can’t find what you are looking for on our website please call or e-mail one of our offices and we will do all we can to help you find your ideal property or business
 
Remember - the price you pay is what the owner receives in full.
 
 
The For Sale By Owner Spain website search facility is quick and easy to use.  Once you have found suitable properties on the For sale By Owner site, fill out the enquiry form and this will go directly to the owner who will contact you with further details of the property.  Property Owners sell privately with no commission on For Sale By Owner Spain assuring the buyer deals direct with the owner and obtains the best deal possible for their Spanish property.
 
We do not display the owners contact details on the website unless the owner has specifically requested.  This is to protect the owner from nuisance emails and calls.
 
FSBO-Spain couldn't make it simpler to find that perfect home in Spain.
 
News Articles

Because of the current state of the property market, The Coastrider has decided to try and keep its readership up-to date with the day to day goings on within the property industry on our coast of Spain.
 
Over the coming weeks we will be discussing various subjects and will welcome any property related enquiry from any readers.
Buying a property in today´s market place can have some advantages, however as in any investment, if it looks too good to be true it probably is.
With the prices of new, resale and off-plan properties falling, seemingly, on a daily basis there has never been a better time to purchase.
Whatever your reasons for buying, for investment, to live permanently or as a holiday home, take advantage of the fact that this is a buyers´ market. Shop around checking as many property agents and websites as you can take a good look at commission free and low commission agencies as these are the ones most likely to have the better priced bargains.
 
If off-plan property appeals then bear in mind you are taking a significant gamble in today´s economy.
 
New property has some outstanding opportunities with many developers offering seemingly tempting enticements. The first requirement new build must have is that it is a key ready property which is coming complete with a habitation certificate, this way you know that the property has been passed as safe and legal to live in buy the local authority.
 
Some of the incentives that are currently being offered include cash back on completion, upgraded furniture packs, guarantees on rental income, golf fees and various others,  but remember nothing in life is free, be prepared to haggle if you don’t ask you certainly won´t get!
A resale property also offers some amazing bargains, but again ensure that all the necessary paperwork and certificates are in place before completion.
The old adage” buy in haste repent at leisure “as many people will bear testament to be true, make sure you take time and get proper advice before you commit yourself to anything.
 
Legal representation should be independent of the seller and should only be representing the buyer and their interests.
 
Mortgages are available; however, never borrow more than you can afford to repay. Most reputable lenders will nowadays only offer between 60-80% of the property´s independent valuation but this will be dependent on the individual circumstances and credit history of the purchaser. If possible prearrange mortgage facilities before you start your search as this can help you negotiate a better deal with the vendor, the sooner the completion the better for many people.
 
When you have selected the ideal property bear in mind that you must allow a further 10-12% for IVA (VAT), land registry, Notary and legal fees .These fees will almost never be covered by the mortgage lender except in very unusual circumstances.
The majority of purchases proceed without any problems, a small number do however run afoul of Spanish bureaucracy. Ensure that you have your NIE before you begin the buying process as without this you cannot purchase or rent any major item that requires registration within the Spanish system.
 
There are nowadays many different schemes by which you can purchase property in Spain and the choice you make will, of course, be determined by your lifestyle and investment requirements and some of these options including co-ownership and rent-to-buy will be covered in future articles.
 
Co-Ownership
I am going to give a brief outline of two new purchasing options which are starting to take root here in Spain.
 
The first of these is Co-Ownership. This is a subject which many people initially, and wrongly, believe is timeshare. Nothing could be further from the truth.
 
There are two recognised meanings for this term, the first and most common is when a group of family or friends get together to purchase a property with a private agreement about usage and bills. These agreements need no regulation, however, for those of you who have considered this option; it is advisable to have some sort of written understanding which all parties have agreed to. This agreement should also have some regard to what would happen to the property in the event of divorce or bereavement of any of the parties concerned.
 
The second common usage of the term is a more formal one.  Co-Ownership is a legally recognised system where a maximum of four people form a registered company for the express purpose of buying a single property with the sole intention of receiving an equal share of any rental income the property generates.
As a registered company is formed with every purchase all the IVA (VAT) is reclaimable, which has an obvious and immediate benefit for the purchasers.
As partners of the formed company, there are standard rules about the disposal or re-distribution of shares, in most of these agreements there may also be an understanding that if property values reach a certain point, either up or down, the property will be placed on the market for disposal, this makes it much easier for each partner to make long-term plans.
 
It is important to realise that this scheme is designed purely for investment purposes; no member of the created company has any occupation rights to the purchased property unless they are paying the advertised open market rent! This is an ideal solution for those who can see the long-term potential in the property market in Spain but do not wish to commit a major portion of their capital to a single purchase.
 
In both cases the owners of the property, this means everybody who is listed on the deeds, are responsible for the maintenance and upkeep of the property. They are also responsible for ensuring that they submit their own tax returns as required by Spanish law.
 
As most of you will have realised these both types of agreement are going to require careful consideration and a degree of oversight, this is something that should properly be left to a reputable established independent agency.
 
The second option which is starting to take root is “rent-to-buy”.
This is a system whereby a seller and a purchaser form an agreement that the property will be purchased at current, or occasionally at future, market value. The purchaser pays, as is common, a holding no-refundable deposit and over an agreed period, a maximum of five years, rents the property at which point the sale is completed. Should the purchase not be completed the prospective purchaser loses all the monies they have paid. It should also be noted that during the rental period the prospective purchaser is responsible for the upkeep and maintenance of the property, as they would be if they had in fact purchased it!
 
This type of agreement has advantages for both parties. For the seller it generates an income from the property with the knowledge that a sale will take place at an agreed time, this can make negotiations with finance providers much simpler.
 For the prospective purchaser this time can be used to fully establish themselves in a new area and to create a pattern of payment and responsibility which may be useful if at the time of final purchase finance will be required.
 
This is not an ideal solution for those who need to generate immediate large funding from their property, it is however quite an attractive option for those who have the ability to wait with the knowledge the sale will proceed.
 
As ever these decisions will ultimately be based on each individual and their circumstances and at all times take advice and ask questions.  “There is no such thing as a stupid question; they are just the easiest to answer.”
 
Language
 One aspect of moving to and living in Spain that seems to be forgotten or ignored by an awful lot of people is the language barrier and the consequences this can have.
It is very easy, when the agent speaks your home language, to be unaware of the extent that knowledge of Spanish language and custom is necessary in order to integrate, even marginally, into your new home.
 
As everyone who has been in Spain for any period of time will tell you the Spanish have adoration for bureaucracy which at times seems to border on addiction. To those who have moved from the United Kingdom the necessity to carry an official form of identification at all times is perhaps the first and most obvious signal that this is indeed a foreign country.
With the widespread availability of home language television, radio and newspapers along with the multitude of bars and restaurants where every language, with the exception of Spanish, can be spoken it is little wonder that many ex-pats of all nationalities have little ability to converse with the authorities on any subject.
 
There are a number of documents you must obtain when coming to buy a property or to live permanently in Spain and for those without the ability to converse with the relevant authorities and fill out the required paperwork the help of an intermediary is essential.
While many staff in government and financial institutions have the ability to converse in languages other than their own there will be times when, for whatever reason, these staff are unable to deal with you in your own language.
 
In the case of medical staff it is quite understandable why doctors need to have an absolutely certain understanding of your symptoms and medical history as any slight confusion can lead to serious complications which could include death, not something which doctors are willing to take a gamble on.
 
It is therefore imperative that until you can acquire the necessary language skills you find someone to assist you; this person should be experienced in dealing with all the agencies you might encounter and also be independent of them.
They should also in the case of medical matters be discrete and someone you can tell everything to in the knowledge you won’t become the main topic of discussion in their local bar that night.
They should also tell you what charges their services will incur and be able to demonstrate a reasonable degree of success with prior clients.
 
As I have stated before in articles in this paper anytime you sign a document in Spain your signature is taken as proof of your understanding of and agreement to any terms and conditions expressed in the document. It is therefore good sense and good value to pay someone to ensure you aren´t being asked to sign away your rights or your money!
 
Once you have begun to settle into your new life make an effort to find Spanish language and culture classes, most town halls run classes for newcomers and welcome everyone with open arms. These classes can also be a great way of meeting new friends, which can help with the feeling of isolation many people face when moving from their home country.
 
It is also worth finding bars and restaurants which are frequented by local Spaniards, whilst they may not have Eastenders or Coronation Street on the television they are likely to have good local food and be very welcoming of strangers.
 
One of the other main differences you will find in a local Spanish bar is the volume people talk at, many times, especially to Britons, it sounds as though everyone is on the verge of open warfare. Settle down and watch it is just the way they are, loud, impassioned and vocal. It is very rare to see violence around the locals when they interact with each other, violence is more likely to erupt amongst ex-pats!
 
The inability to speak and have an understanding of the language and customs of the country is something that many Britons take as a disgrace when applied to foreigners entering the United Kingdom, and yet they don’t appear to attach the same criteria to themselves when they have come to live in Spain.
 
An attempt, however small, to speak their language is appreciated by all the Spanish I have encountered.
 
Property Exchange
Opinions as to the state of the housing market would appear; at the moment at least, to be as plentiful as weather forecasts and just about as reliable.
 
In both instances, house prices and weather, the best barometer may well be to stick your head out the window and see for yourself what is happening!
 
On one hand we have government statisticians telling us that the worst is over and house prices in the UK and then the rest of Europe are set to make gains in the later stages of this year.
 
Given how honest and reliable all the government information has been shown to be over the last several years, it would seem to be, to use the Prime Ministers favourite phrase, “prudent” to treat these statistics with at the least a little caution!
 
By the same token the major lending institutions, in the United Kingdom at least, are reporting a rise in the number of favourable decisions for lending in the last financial quarter. As these are the self same institutions which help precipitate this crisis, and who are largely owned by the Government, again it might be necessary to apply a little scepticism to these figures.
 
By the simple test of sticking your head out of the window it would appear that the reality is; for everyone other than a politician or a banker, somewhat different.
 
Jobs are being lost, homes are being repossessed, and consumer spending is down and most noticeably for those of us living here on the Costas visitor numbers are down by an enormous amount.
 
With the marked difference in the exchange rate, from even one year ago, anyone on a fixed income from out with the Euro zone has noticed a major difference in the amount of money they have had to live on.
 
 Couple this drop with the general rise in prices of everyday goods and services and it is easy to understand why some people are getting desperate to sell their properties and either move somewhere cheaper or to downsize and, hopefully, raise some capital.
 
One of the newer trends, in Spain, which can help in this situation, is “Property Exchange”. 
 
Whilst not suitable for every circumstance property exchange can help people make moves and restart their lives.
 
 In many cases the exchanges can be relatively, by Spanish standards, straightforward, when both properties are under the jurisdiction of the Spanish Notary system.
 
It does need the expertise of qualified professionals to ensure that both parties are adequately protected and represented with regard to any tax issues which may arise.
 
Where the property exchange scheme has in the past encountered major difficulties has been if one of the properties being exchanged is out with Spanish jurisdiction.
 
Given the large numbers of people I meet who wish to return to the UK and an increasing number of UK residents who would like to leave the country but who cannot sell their property it was only a matter of time before we were asked if there could be any legal method to arrange an exchange, with a cash adjustment in either direction as necessary, which could be presented to a Notary and accepted.
 
Having done a fair bit of research the short answer is YES ,but remember this is Spain, short answers can leave a lot of very big and potentially expensive questions!
 
In order to prove to the Notary system that what is being proposed, does indeed, meet all the requirements of taxation and land registration legislation currently in place, there needs to be a professional and legally recognisable framework in place which can cover both jurisdictions, and, ensure all parties are protected by the governing bodies for Legal professionals in both countries.
 
In other words the long answer now turns out to be YES as well.
 
For many people this now represents a realistic, and in some cases speedy solution, however, as with anything in life, with the exception of death and ever more taxation, there are no guarantees!
 
In order for these schemes to work properly both parties have to be prepared to negotiate in good faith, I know these sounds obvious, but without openness and honesty this type of transaction cannot proceed.
 
For anyone wishing to consider a property exchange, either within Spain or to another part of Europe or indeed the world at large there are some key questions they must consider:
Where do you want to move to?
What kind of property are you looking for?
If there needs to be a cash adjustment can you afford it?
How many people from your target area are realistically going to be looking to move into and live in your current house?
When you can give yourself honest answers to these questions then Property Exchange might indeed be the way forward!
 
 
News Articles

Because of the current state of the property market, The Coastrider has decided to try and keep its readership up-to date with the day to day goings on within the property industry on our coast of Spain.
 
Over the coming weeks we will be discussing various subjects and will welcome any property related enquiry from any readers.
Buying a property in today´s market place can have some advantages, however as in any investment, if it looks too good to be true it probably is.
With the prices of new, resale and off-plan properties falling, seemingly, on a daily basis there has never been a better time to purchase.
Whatever your reasons for buying, for investment, to live permanently or as a holiday home, take advantage of the fact that this is a buyers´ market. Shop around checking as many property agents and websites as you can take a good look at commission free and low commission agencies as these are the ones most likely to have the better priced bargains.
 
If off-plan property appeals then bear in mind you are taking a significant gamble in today´s economy.
 
New property has some outstanding opportunities with many developers offering seemingly tempting enticements. The first requirement new build must have is that it is a key ready property which is coming complete with a habitation certificate, this way you know that the property has been passed as safe and legal to live in buy the local authority.
 
Some of the incentives that are currently being offered include cash back on completion, upgraded furniture packs, guarantees on rental income, golf fees and various others,  but remember nothing in life is free, be prepared to haggle if you don’t ask you certainly won´t get!
A resale property also offers some amazing bargains, but again ensure that all the necessary paperwork and certificates are in place before completion.
The old adage” buy in haste repent at leisure “as many people will bear testament to be true, make sure you take time and get proper advice before you commit yourself to anything.
 
Legal representation should be independent of the seller and should only be representing the buyer and their interests.
 
Mortgages are available; however, never borrow more than you can afford to repay. Most reputable lenders will nowadays only offer between 60-80% of the property´s independent valuation but this will be dependent on the individual circumstances and credit history of the purchaser. If possible prearrange mortgage facilities before you start your search as this can help you negotiate a better deal with the vendor, the sooner the completion the better for many people.
 
When you have selected the ideal property bear in mind that you must allow a further 10-12% for IVA (VAT), land registry, Notary and legal fees .These fees will almost never be covered by the mortgage lender except in very unusual circumstances.
The majority of purchases proceed without any problems, a small number do however run afoul of Spanish bureaucracy. Ensure that you have your NIE before you begin the buying process as without this you cannot purchase or rent any major item that requires registration within the Spanish system.
 
There are nowadays many different schemes by which you can purchase property in Spain and the choice you make will, of course, be determined by your lifestyle and investment requirements and some of these options including co-ownership and rent-to-buy will be covered in future articles.
 
Co-Ownership
I am going to give a brief outline of two new purchasing options which are starting to take root here in Spain.
 
The first of these is Co-Ownership. This is a subject which many people initially, and wrongly, believe is timeshare. Nothing could be further from the truth.
 
There are two recognised meanings for this term, the first and most common is when a group of family or friends get together to purchase a property with a private agreement about usage and bills. These agreements need no regulation, however, for those of you who have considered this option; it is advisable to have some sort of written understanding which all parties have agreed to. This agreement should also have some regard to what would happen to the property in the event of divorce or bereavement of any of the parties concerned.
 
The second common usage of the term is a more formal one.  Co-Ownership is a legally recognised system where a maximum of four people form a registered company for the express purpose of buying a single property with the sole intention of receiving an equal share of any rental income the property generates.
As a registered company is formed with every purchase all the IVA (VAT) is reclaimable, which has an obvious and immediate benefit for the purchasers.
As partners of the formed company, there are standard rules about the disposal or re-distribution of shares, in most of these agreements there may also be an understanding that if property values reach a certain point, either up or down, the property will be placed on the market for disposal, this makes it much easier for each partner to make long-term plans.
 
It is important to realise that this scheme is designed purely for investment purposes; no member of the created company has any occupation rights to the purchased property unless they are paying the advertised open market rent! This is an ideal solution for those who can see the long-term potential in the property market in Spain but do not wish to commit a major portion of their capital to a single purchase.
 
In both cases the owners of the property, this means everybody who is listed on the deeds, are responsible for the maintenance and upkeep of the property. They are also responsible for ensuring that they submit their own tax returns as required by Spanish law.
 
As most of you will have realised these both types of agreement are going to require careful consideration and a degree of oversight, this is something that should properly be left to a reputable established independent agency.
 
The second option which is starting to take root is “rent-to-buy”.
This is a system whereby a seller and a purchaser form an agreement that the property will be purchased at current, or occasionally at future, market value. The purchaser pays, as is common, a holding no-refundable deposit and over an agreed period, a maximum of five years, rents the property at which point the sale is completed. Should the purchase not be completed the prospective purchaser loses all the monies they have paid. It should also be noted that during the rental period the prospective purchaser is responsible for the upkeep and maintenance of the property, as they would be if they had in fact purchased it!
 
This type of agreement has advantages for both parties. For the seller it generates an income from the property with the knowledge that a sale will take place at an agreed time, this can make negotiations with finance providers much simpler.
 For the prospective purchaser this time can be used to fully establish themselves in a new area and to create a pattern of payment and responsibility which may be useful if at the time of final purchase finance will be required.
 
This is not an ideal solution for those who need to generate immediate large funding from their property, it is however quite an attractive option for those who have the ability to wait with the knowledge the sale will proceed.
 
As ever these decisions will ultimately be based on each individual and their circumstances and at all times take advice and ask questions.  “There is no such thing as a stupid question; they are just the easiest to answer.”
 
Language
 One aspect of moving to and living in Spain that seems to be forgotten or ignored by an awful lot of people is the language barrier and the consequences this can have.
It is very easy, when the agent speaks your home language, to be unaware of the extent that knowledge of Spanish language and custom is necessary in order to integrate, even marginally, into your new home.
 
As everyone who has been in Spain for any period of time will tell you the Spanish have adoration for bureaucracy which at times seems to border on addiction. To those who have moved from the United Kingdom the necessity to carry an official form of identification at all times is perhaps the first and most obvious signal that this is indeed a foreign country.
With the widespread availability of home language television, radio and newspapers along with the multitude of bars and restaurants where every language, with the exception of Spanish, can be spoken it is little wonder that many ex-pats of all nationalities have little ability to converse with the authorities on any subject.
 
There are a number of documents you must obtain when coming to buy a property or to live permanently in Spain and for those without the ability to converse with the relevant authorities and fill out the required paperwork the help of an intermediary is essential.
While many staff in government and financial institutions have the ability to converse in languages other than their own there will be times when, for whatever reason, these staff are unable to deal with you in your own language.
 
In the case of medical staff it is quite understandable why doctors need to have an absolutely certain understanding of your symptoms and medical history as any slight confusion can lead to serious complications which could include death, not something which doctors are willing to take a gamble on.
 
It is therefore imperative that until you can acquire the necessary language skills you find someone to assist you; this person should be experienced in dealing with all the agencies you might encounter and also be independent of them.
They should also in the case of medical matters be discrete and someone you can tell everything to in the knowledge you won’t become the main topic of discussion in their local bar that night.
They should also tell you what charges their services will incur and be able to demonstrate a reasonable degree of success with prior clients.
 
As I have stated before in articles in this paper anytime you sign a document in Spain your signature is taken as proof of your understanding of and agreement to any terms and conditions expressed in the document. It is therefore good sense and good value to pay someone to ensure you aren´t being asked to sign away your rights or your money!
 
Once you have begun to settle into your new life make an effort to find Spanish language and culture classes, most town halls run classes for newcomers and welcome everyone with open arms. These classes can also be a great way of meeting new friends, which can help with the feeling of isolation many people face when moving from their home country.
 
It is also worth finding bars and restaurants which are frequented by local Spaniards, whilst they may not have Eastenders or Coronation Street on the television they are likely to have good local food and be very welcoming of strangers.
 
One of the other main differences you will find in a local Spanish bar is the volume people talk at, many times, especially to Britons, it sounds as though everyone is on the verge of open warfare. Settle down and watch it is just the way they are, loud, impassioned and vocal. It is very rare to see violence around the locals when they interact with each other, violence is more likely to erupt amongst ex-pats!
 
The inability to speak and have an understanding of the language and customs of the country is something that many Britons take as a disgrace when applied to foreigners entering the United Kingdom, and yet they don’t appear to attach the same criteria to themselves when they have come to live in Spain.
 
An attempt, however small, to speak their language is appreciated by all the Spanish I have encountered.
 
Property Exchange
Opinions as to the state of the housing market would appear; at the moment at least, to be as plentiful as weather forecasts and just about as reliable.
 
In both instances, house prices and weather, the best barometer may well be to stick your head out the window and see for yourself what is happening!
 
On one hand we have government statisticians telling us that the worst is over and house prices in the UK and then the rest of Europe are set to make gains in the later stages of this year.
 
Given how honest and reliable all the government information has been shown to be over the last several years, it would seem to be, to use the Prime Ministers favourite phrase, “prudent” to treat these statistics with at the least a little caution!
 
By the same token the major lending institutions, in the United Kingdom at least, are reporting a rise in the number of favourable decisions for lending in the last financial quarter. As these are the self same institutions which help precipitate this crisis, and who are largely owned by the Government, again it might be necessary to apply a little scepticism to these figures.
 
By the simple test of sticking your head out of the window it would appear that the reality is; for everyone other than a politician or a banker, somewhat different.
 
Jobs are being lost, homes are being repossessed, and consumer spending is down and most noticeably for those of us living here on the Costas visitor numbers are down by an enormous amount.
 
With the marked difference in the exchange rate, from even one year ago, anyone on a fixed income from out with the Euro zone has noticed a major difference in the amount of money they have had to live on.
 
 Couple this drop with the general rise in prices of everyday goods and services and it is easy to understand why some people are getting desperate to sell their properties and either move somewhere cheaper or to downsize and, hopefully, raise some capital.
 
One of the newer trends, in Spain, which can help in this situation, is “Property Exchange”. 
 
Whilst not suitable for every circumstance property exchange can help people make moves and restart their lives.
 
 In many cases the exchanges can be relatively, by Spanish standards, straightforward, when both properties are under the jurisdiction of the Spanish Notary system.
 
It does need the expertise of qualified professionals to ensure that both parties are adequately protected and represented with regard to any tax issues which may arise.
 
Where the property exchange scheme has in the past encountered major difficulties has been if one of the properties being exchanged is out with Spanish jurisdiction.
 
Given the large numbers of people I meet who wish to return to the UK and an increasing number of UK residents who would like to leave the country but who cannot sell their property it was only a matter of time before we were asked if there could be any legal method to arrange an exchange, with a cash adjustment in either direction as necessary, which could be presented to a Notary and accepted.
 
Having done a fair bit of research the short answer is YES ,but remember this is Spain, short answers can leave a lot of very big and potentially expensive questions!
 
In order to prove to the Notary system that what is being proposed, does indeed, meet all the requirements of taxation and land registration legislation currently in place, there needs to be a professional and legally recognisable framework in place which can cover both jurisdictions, and, ensure all parties are protected by the governing bodies for Legal professionals in both countries.
 
In other words the long answer now turns out to be YES as well.
 
For many people this now represents a realistic, and in some cases speedy solution, however, as with anything in life, with the exception of death and ever more taxation, there are no guarantees!
 
In order for these schemes to work properly both parties have to be prepared to negotiate in good faith, I know these sounds obvious, but without openness and honesty this type of transaction cannot proceed.
 
For anyone wishing to consider a property exchange, either within Spain or to another part of Europe or indeed the world at large there are some key questions they must consider:
Where do you want to move to?
What kind of property are you looking for?
If there needs to be a cash adjustment can you afford it?
How many people from your target area are realistically going to be looking to move into and live in your current house?
When you can give yourself honest answers to these questions then Property Exchange might indeed be the way forward!
 
 
 
 
 
No Commission Spain. No Commission Spain. No Commission Spain. No Commission Spain. No Commission Property Spain. No Commission Property Spain
 

FAQ's For Property Buyers

 
Why buy directly from the owner?
 

Buying a property advertised on FSBO-Spain.com offers the following advantages:

1.       No estate agents commissions to pay, meaning you will pay substantially less

2.       You deal directly with the owner and negotiate a price that suits you both. 

3.       There are no agents to interfere, slow down the process or withhold valuable information from the seller 

4.       Buying directly through the owner means that the sale runs smoothly and there are usually less delays

5.       For Sale By Owner sites are already very popular in the UK and America and are proven to be an effective way of buying property

6.    There are no risks in buying directly from the owner as long as you use a solicitor

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