A Spanish mortgage can be obtained for up to 70% of the purchase price, repayable over 10/15 years at 5% interest rate - dependent on circumstance. If you have equity in an existing property, either in the UK or abroad, then it may be more cost effective to remortgage ( or take out a second mortgage) on that property, rather than take out a new mortgage for a second home in Spain. It involves less paperwork and therefore lower legal fees and a plan can be tailored to meet your personal requirements.  

To reserve your property, on your viewing trip, you need to have a Banker's Draft or credit card facility for 3,000Euros, the standard deposit fee. We do not recommend large cash transactions.

If you need to pay bills etc. for the property whilst you are in the UK then the first step is to open a Spanish bank account, and we can advise   you how to do this. Then standing orders will be set up for you to pay everything through the bank. The bank can also arrange for statements to be sent to you in the UK in English. >

If you are planning to live in Spain permanently there is no need to make the arrangements in a hurry. You might need time to find the area that suits you best. It might be a good idea to rent a property in the area where you think you want to live. This way you have the opportunity to get to know the lifestyle and the area. There are long term (vivienda) and short term contracts (temporada). The short term contract should state the duration of the contract, specify the amount to be paid, manner of payment and the amount of the deposit, if any. The long term contract often contains provisions for the tenant to pay community charges, real estate tax (IBI) and even rubbish charges. Be careful with these charges as they soon add up. Strictly legally you will find that these charges are the responsibility of the owner of the property and even after signing the contract you can contest it and you will surely win the case. 

In Spain the purchase of property by foreigners is freely liberalised and in most cases you will not need to obtain prior Governmental approval to buy a Spanish property.

The one main exception to this is where you are resident in a Tax Haven (as specified by Spanish Regulations). In this situation you will need to file a pre-closing report for the purchase with the Ministry of Economy and Finance. There is usually no problem with obtaining clearance, but early advice form your local lawyers is essential if you are going to be purchasing a property from a Tax Haven.

It may be sensible (but not essential) to make your purchase through a newly formed company or a trust structure in order to make the future sale easier and to gain inheritance and other tax benefits. These are issues that need considering early in the purchase process. You will also need to have advice on these aspects from a lawyer in your own country. Law Sentinel (www.lawsentinel.com) can assist you in locating and appointing suitable lawyers if you need help. 

Once you have chosen & purchased your property , a declaration will have to be filed by your lawyers for statistical purposes with the Register of Foreign Investments that is kept by the Ministry of Economy. This rule applies to foreign buyers only.

When you have found the property you want, you will need to see a Solicitor. We will be happy to recommend one and accompany you if you wish, to pay a deposit to hold the property. This will usually be around 10% of the purchase price and at the same time you will sign a contract of purchase. Before making the contract with the Vendor, legal experts will have made the necessary searches and confirmed that the property is legal and free of debt. Your solicitor should inform you of their fees in advance - 1% of the purchase price of the property is the customary charge.

After this, if it is a Re-sale property, following payment of the deposit, the balance will need to be paid. This is done when you visit the Notary to sign the title Deeds (Escritura). Arrangements will then be made with yourself, your legal representative and the Vendor for a date that is convenient for all parties to attend.

If it is a new property then the payments are normally made in stages (inclusive of deposit already paid). The keys are handed over to you when the final payment is made and construction completed. 

If you are unable to come back and sign the Title Deeds yourself, you can appoint someone to act on your behalf as your Power of Attorney. This can be your Spanish Solicitor, Spanish Real Estate Agent or someone of your choice.  

Before arriving in Spain you should make sure that you have, at your disposal, sufficient funds to cover the reservation sum which represents your deposit. The absolute minimum required is normally  3000 Euros, but may be greater for higher priced properties. The reservation sum may be paid with a credit card or cash. A cheque drawn on a foreign bank may take up to 10 days to clear by a Spanish bank.

If you do not have the means to pay a reservation sum immediately you may risk losing the property to someone else who does have the money to put down. There are virtually no exchange controls in Spain, which means that whether resident or not you are free to obtain a loan or mortgage against your property in any currency and from any bank in the world. Spanish banks are quite willing to lend to non resident purchasers of real estate. 

You will need – 

·        A photocopy of your income tax returns

·        3 months salary slips

·        Last 3 months bank statements

This would also be a good time to think again about your will, as you will have overseas property as well as your other assets. This would need to be done in your own country by your own solicitor.