country properties in andalucia,inland spain at the costa del sol:buyers guide

Buyer's Guide

Choosing a property

First you must decide the location. A few years ago it was taken for granted that it had to be the Costa del Sol - meaning as near to the beach as possible. Today, the new roads leading inland make it possible to choose a different way of life or holiday. Twenty minutes from the beaches lies a whole unspoiled countryside, full of forgotten charm, clean air and hospitable people, golf courses, tennis clubs good restaurants, inexpensive ventas and bars, in short everything the coast offers without the pollution and the overcrowding. When you decide to buy a property remember you now have a wider choice of location, so come to the Guadalhorce Valley; you will be pleasantly surprised.

Choosing an estate agent

Choosing a reputable Estate Agent will help you to build your knowledge of the area and of comparable values of properties with similar characteristics in different locations. By sharing their experience and knowledge in the property world with you, your Estate Agent will help you locate the right property. They will help by explaining the contrasts between the different areas and properties, interpreting your requirements and informing you of those properties which, in their opinion, may match what you are looking for. They will also guide you through the negotiations with the seller.

Ongoing expenses

Once you have selected a property that may be a possible purchase, you should enquire as to the ongoing expenses. In particular ask how much is the Council�s Annual Real Estate Tax (known as IBI), the community fees, the charges for refuse collection, the water rates, the electricity charges and the Property Income and Wealth Tax in respect of the particular property in which you are interested.

Deciding to buy

You may find that having looked at three properties you liked, one has a certain feature which is quite attractive, another a different feature and so on, but none has exactly what you want. There may be differences of opinion between you and your spouse over the choice of property. A perfect property in reality seldom exists whether you build from new or not. The decision to buy therefore may be one of compromise. Many buyers find that, once they have added their own personal touches to the property, it becomes a home and matches their expectations.

Negotiating the purchase

Having chosen the property, the next step is to negotiate the purchase terms with the seller. The terms should not be limited solely to price but should cover all your requirements in detail. You may wish, for example, to make that offer subject to mortgage or lawyer�s approval, to stipulate that the seller pays the Plusvalia tax (Tax payable on the increased value of a property from its time of purchase to its resale), to vary final completion dates, or the method of payment. You may wish to include or exclude the furniture. The salesman who found the property for you may not be the best person to negotiate the terms of sale with the owner. Ask to speak with the senior sales person or sales manager in the company and discuss with them the formation of a team to negotiate and carry through the terms of your purchase. The sales person may at this stage feel it of benefit to bring into the team a lawyer to assist in the negotiation making sure that any offer meets their legal criteria.

Choosing a lawyer

A lawyer will provide the legal guarantees for the purchase of your property, ensuring that legal requirements are met and that your property is bought free of encumbrances, charges, liens or debt and up to date in all its payments of local contributions and community charges etc. The lawyer may also assist the sales team in difficult and complex negotiations with the owner. Using a lawyer from your home country may double your bill and will most certainly hold up the sales process. There are many excellent local lawyers who may be fluent in your language. Ask your estate agent for a list of lawyers who are familiar with the area in which you want to purchase.

Formalising an offer

Once the sales team, together with the lawyer, has discussed terms of the purchase with the owner and there is a verbal agreement, the next step is to formalise the offer terms of purchase by setting them out in writing. Show the seller that you really do intend to purchase by lodging funds in a local bank account or with your lawyer. It is normal practice in Spain to include a sum of money with the offer in order to reserve the property for you, until such time as you are in a position to exchange private contracts.

Exchange of private contracts

Upon acceptance of your offer by the owner, the next step in the sales process is to exchange private contracts of sale or to sign an option to purchase. This may take place within two weeks of formal acceptance of the offer or sooner. Your lawyer will have completed his legal searches and investigations of the property and will have arranged the procedure for the cancellation of any outstanding debts with the owner. The private contract of sale or option will (1) reflect all the agreed terms of the offer and sale and (2) set out the date for final completion at the notary. It is normal practice to pay ten percent of the purchase price at this stage.

Final completion and exchange at the notary

A sale is formally completed in Spain when the Public Title Deeds of Purchase and Sale are signed before a notary, the agreed price paid and possession given to the buyer. Once signed, the notary will fax a note of the title deed to the local land registry. Your lawyer may also deal with the payment of all the relevant transfer taxes associated with the purchase on your behalf and also handle the formalities of registration of your title deeds. Similarly, your lawyer may arrange for the transfer of accounts with the local suppliers of utility services such as water and electricity and organise their payment through a local bank.

Costs involved in purchasing a property

There are basically three fees and two taxes to pay when purchasing property in Spain. The fees are:

Legal fees: normally charged at 1% of the purchase value plus V.A.T. (IVA) - currently 16%. Notary fees: The scale is fixed by law and may range from 50.000 pts for lower priced properties to 140.000 pts for higher priced properties.
Property Registry: As a rule of thumb, 40% of the Notorial charges.
Transfer tax: when buying from a promoter, developer or habitual trader, this is 6% (ITP) or V.A.T. (IVA) at 7% plus Stamp Duty of 0,5%. V.A.T. (IVA) at 16% is applicable when purchasing parcels of land and commercial premises and garage spaces.
Plusvalia: This tax is normally payable by the vendor although it may be stipulated that the buyer pays. This tax may range from a few thousand pesetas to as much as several million pesetas on larger properties with a lot of land. The person responsible for this payment will be decided upon during the negotiations and in consultation with your lawyer.

The Buyers Guide of Inland Properties will help you through Spain�s and country�s property research. In the following lines we will try to give you the steps and different aspects you have to consider when buying a property in this wonderful region. We hope this will be helpful to you, and will ease your change of life.

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