MORTGAGES
If you need to raise finance to purchase your property, there are several options available to you, both in Spain and the UK. The main difference between securing finance in the UK and in Spain is that whereas the former can be arranged to finance stage payments, the latter is only available on completion.
If you decide to raise the funds in the UK, you can do so either by re-mortgaging an
existing property or, by taking out a personal loan. In either case, you will need to transfer the funds from a bank account in the UK to your bank account in Spain.
Alternatively, you may wish to consider raising the funds for completion through a
Spanish mortgage. Spanish banks offer competitive mortgages with low rates of interest, to both non-residents and residents of Spain. Typically, the banks will grant up to 70% of their valuation of the property for a term of up to 20 years.
Spain offers several kinds of mortgages including fixed and variable interest rates or, indeed, a combination of both. Endowment or pension-backed mortgages are not available, although interest-only mortgages are now being offered by some lenders.
The Bank will need documentation from you to be able to consider your mortgage application including a bank reference, copy bank statements, copy income tax returns, (P60) copy salary slips or, copy accounts if you are self-employed.

If you are buying off plan the developer may already have a mortgage in place, which you can simply take-over (subrogate) on completion, subject to your financial status.
The mortgage arrangement fees for securing a mortgage offer from a Spanish bank
amount to approximately 3% of the mortgage advance. The fees include Stamp Duty, the bank’s commission, legal, notary and land registry fees.
In many instances, the mortgage arrangement fees will be lower if you take-over the developer’s mortgage on completion.

COSTS, FEES AND TAXES
As a general rule you need to add approximately 10% to your base purchase price (excluding mortgage arrangement fees) to cover all your essential fees and taxes and these are broken down as follows:

VAT (IVA) / Transfer Tax (ITP)
IVA applies to off-plan purchases whereas ITP applies to re-sale properties. Both are currently 7%. IVA is payable with each instalment, whereas ITP is payable on completion.

Stamp Duty (AJD)
AJD is only payable on the purchase of off-plan properties and is currently 1%, regardless of the value of the property. It is payable on completion.

Plus Valía
This is a one-off tax levied by the Local Authorities and is calculated by reference to the increase in value of the land since the last sale of the property/land. For most purchases this tax will amount to only a few hundred Euros and is normally payable by the vendor on completion.

Legal Fees
Conveyancing fees will be charged by a Spanish Conveyancer for representing you and these are normally a percentage of the purchase/sale price plus VAT at Spanish rates.
Notary, Land Registry and Gestoría Fees
These are the fees associated with the witnessing and subsequent registration of your
title deeds. Notary fees range according to a scale fixed by law and are between 300 to
1200 Euros. Land Registry fees are generally about 20% less than the Notary’s fees.
Gestorías are official intermediaries between individuals and government bodies, such as the tax office and the land registry. Their fees are generally about 300 Euros plus VAT. Your Conveyancer will liaise with the Gestoría until the land registry has returned your title deeds.

Please note that: This guide has been prepared by a third party firm of conveyancers in Spain, and is provided for information only and is not a substitute for proper legal advice.

For further information please contact us at
Campillos Properties, Calle Puerta de Teba, 51, Campillos, Malaga 29320
Or see our website :- www.Solfincas.co.uk,
telephone 952 72 24 20 email: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
English Speaker mobile:
653 505 093