Buying a property in Spain At Coastal Golf Estates we never forget that buying your property in Spain is a life enhancing decision. This major purchase requires careful thought and you will need good advice. Buying in Spain is certainly much easier than in the UK- however, the Spanish process is different and requires some knowledge of the basic procedures involved. We strongly recommend that you employ a lawyer with the experience of purchasing Spanish property- ideally an English speaking lawyer. They will make the necessary searches to ensure that the land belongs to the vendor, is free of charges, has the necessary planning and building permission and that the contract is fair and legal. During your inspection visit we will be happy to introduce you to an independent lawyer who will be pleased to answer any legal queries you have and act on them on your behalf. Information about the Purchase, Annual Maintenance and Running Costs Of Your Home in Spain The figures set out are intended as a guide to the cost of both purchasing and running your Spanish home, whether it be for use as a ‘Holiday Home’ or for permanent living. They are based on a 2/3 bedroom semi-detached property. Costs payable on the completion of your property The following additional costs are payable upon completion of your property and should be taken into account when considering your overall budget: Notarial Legal Fees 1. I.T.E. Spanish property purchase tax (Stamp Duty) currently 7% of the total price. 2. Preparation of Escritura (Title Deeds) and registration of the property with the Spanish land registry 3. Contract and connection charges of water and electricity supplies This amounts to 10% above the total price on the deeds. Spanish Energy/Utility Costs 1. Electricity: 0.09€ / KWH 2. Water: 0.16€ / m3 3. Telephone: 0.03€ / min local – 0.73€ / min international 4. Butane Gas: 10.20 € per 12.5 Kg bottle Local/Government taxes and National/Public Utilities S.U.M.A. Local Council Tax and Spanish Property Tax – calculated at 0.8% of the rateable value (Valor Catastral) of your property and payable annually between August and October. Between 54€ and 150.25€ per year depending on the sq mtrs of the property Annual Running Costs The costs are considerably lower than England. The costs depend on the size and occupancy of the property. The following costs are an approximate guide of running costs based on an average 2 bedroom property. Standing charges for Water 67€ (approx. 41.54 GBP) Standing charges for Electricity 108€ ( approx. 66.96 GBP) Local Rates 102€ (approx. 63.24 GBP) Buildings and Contents Insurance 150€ (approx. 93.00 GBP) Telephone 132€ (approx. 81.83 GBP) Cable TV (where applicable) 132€ (approx. 81.84 GBP)   Patrimonial Tax 210€ 1(approx. 30.20 GBP) Spanish Fiscal Representation 61€ (approx. 37.82 GBP) Water (Agua) – Refuse Collection (Basura) – Sewage – Algantarillado Local councils (Ayuntamientos) are responsible for the above. The quarterly ‘standing charge’ is around 16€ plus a charge for the amount of water used. Water in Spain is metered at an average cost of 0.16€ per cubic meter. Electricity (Luz/Electricidad) The Spanish notarial electricity company is called IBERDOLA. Electricity bills are bi- monthly with a ‘standing charge’ for this period of around 16€ for 3.3 KWH of electrical power to your house. This power (potencia) can be increased by request to your local electricity company office. The higher the power to your house, the greater the ‘standing charge’ and cost per KWH. The 3.3 KWH quoted is usually sufficient for normal needs. The cost for electricity is 0.09€ / KWH and your bill obviously depends on the amount of electricity used. Wealth tax (Impuesto de Patrimonio) Not as daunting as it may sound! This tax is on your property and possessions in Spain taxed at 0.2%. This tax is payable annually. Resume of monthly running costs for a 2/3 bedroom property. Euro /GBP Council/Property Tax 30 20 Water/Refuse/Sewage standing charge 5 3 Electricity standing charge 7.5 5 Insurance – Buildings/Contents/Public Liability/Car The cost for the above Insurance services is much the same as in the UK and Ireland. Many major UK insurance companies now have offices in Spain and the Torrevieja area e.g. Commercial Union, Direct Line (Linea Directa), Royal and Sun alliance etc. The staff at these local offices speak English and will be pleased to discuss and advise you on your various needs and will provide quotations on request. Medical Services If you are of retirement age and are in receipt of a UK/Ireland retirement pension then you will need form E121 from the pensions department at Newcastle in order to transfer your medical entitlement to Spain. If you work legally in Spain and pay Social Security contributions, you are entitled to full health care under the Spanish National Health Service. If you visit Spain for short periods e.g. holidays, then you should obtain form E111 from your local Post Office in the UK or Ireland. This must be presented to a Doctor/Hospital in spain in the event that you require a medical examination/treatment. It will be photocopied by the Doctor/Hospital for administration purposes and then returned to you for future use. For those people who do not fall into the above-mentioned categories, or who are below UK/Ireland retirement age and who reside in Spain permanently, Private Medical Insurancve in the UK/Ireland e.g. B.U.P.A., Private Patients Plan, Exeter Friendly Society etc through one of their local offices in Spain. The cost depends on age and physical condition and can be obtained from any local insurance office on request. Postal Services If you wish to receive correspondence in Spain, it is imperative that you ascertain postal delivery arrangements that exist for your house or urbanization. This can be done through your local Post Office (Oficina de Correos y Telegrafos) or your neighbours may well know the arrangements. Correspondence to you must be correctly addressed with the full address of your house and postcode. Banking Services You will need to open a current account here in Spain. You can arrange for your bank to pay various bills by Direct Debit from your account, which will avoid many problems. Whether resident or not, you should regularly check that there is enough money in your account to cover your regular bills e.g. Electricity, Water and Telephone. Most banks have some English speaking staff or a Foreigners department to assist you. Mortgages Mortgages are available for non-residents and residents for up to 70% of the property value. You would have to prove income using your two last pay slips and a P60. They are reasonably easy to get and interest rates are very competitive. Fiscal/Legal Representation Again some of the problems of living in Spain can be removed by engaging the services of a Fiscal representative or Gestoria. For a small fee they will take care of all your fiscal and legal obligations in spain and ensure that you can do what you have come here to do – Relax and Enjoy Life. Permanent Residence in Spain The maximum amount of time you are permitted to reside in Spain is six months. If you intend to live here for longer periods of time or permanently you will have to apply for and obtain a Residence permit (permiso de Residencia) from the Foreigners Dept of your Regional Police (commisaria de Policia). This you can do yourself or you can engage the services of a Fiscal Representative or Gestoria. If you wish to do this yourself you will need – 1. photocopies of your passport x 2 + originals 2. photocopies of your form E121 x 2 + originals 3. photocopies of your work contract or a letter from your bank stating that you receive a regular income e.g. a pension x 2 + originals 4. photocopies of your certificate of ‘Convivencia’. This can be obtained from your local town hall (Ayuntamiento). 5. photocopies of your N.I.E. (foreigners number) x 2 6. The relevant forms (obtained from the regional police dept). If you intend to work in Spain certain legal requirements exist and you would be advised to engage the services of a qualified Gestoria or Lawyer (Abogado). Wills Whether or not you have made a will in the U.K./Ireland, it is strongly recommended that you make a legally notarized Spanish Will in respect of your property and assets in Spain. This will simplify matters for your beneficiaries in the event of your death and will enable matters relating to their inheritance to be dealt with speedily. Arrangements for your Spanish Will can be made by your lawyer at a cost of around 150 € per person. Conclusion We have endeavoured in these notes to explain those matters that are of the most importance to you when buying your property in Spain and then managing and maintaining it for your later enjoyment. We do not claim to have covered everything. No doubt you will have many other questions, which our staff are more than happy to answer. Back to home page