Costa Blanca Property Questions/Answers
Purchasing Spanish Property
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Frequently Asked Questions: Purchasing Spanish Property
- What are the additional costs & payment structures of buying a Spanish property?
- Can I get a Spanish mortgage, how easy is it to open a Spanish bank account & how easy is it to transfer money from the UK to Spain?
- How easy will it be to rent my property, how much rental income could I expect & how much are the associated costs likely to be?
Answers: Purchasing Spanish Property
What are the additional costs & payment structures of buying a Spanish property?:
You should budget for around 13% of the purchase price (15% if you are taking out a mortgage). This breaks down roughly as 10% IVA (Spanish VAT), 1% property tax (Spanish stamp duty only applicable on new properties), 2% to cover solicitors fees, notary fees, insurances & a further 2% for a bank mortgage arrangement fee. For a re-sale property expect to pay a 3000 euro reservation deposit & a further 10% of the purchase price within 28 days. The balance would be due on completion which usually takes 6 to 8 weeks. On a new property expect to pay a 3000 euro reservation deposit & a further payment of 25% to 40% 30-45 days after reserving the property with the balance due on completion of the property. Each developer offers different build times (some have brand new key ready properties for immediate occupation) & different payment structures and some are negotiable. The actual terms of any specific property you were interested in would be outlined during viewing and before you have made any financial commitment.
Can I get a Spanish mortgage, how easy is it to open a Spanish bank account & how easy is it to transfer money from the UK to Spain?:
Spanish mortgages are readily available & quick & straightforward to apply for. They are generally more expensive to set up than in the UK and you should expect to pay a fee of around 2% of the amount borrowed plus a valuation fee of around 400 euros. You will also be requested to take out buildings insurance & life assurance with the bank. Interest rates in Spain are around the same as in the UK with a typical rate of around 4% and you would normally be able to borrow up to 70% of the property value (sometimes more). Obviously we can arrange mortgages for you. There are numerous branches of all the major Spanish banks along the Costa Blanca (significantly more bank branches than in major UK towns). Most cater for British customers and offer current & deposit accounts, cheque books, credit & debit cards & internet & telephone banking all in English. You can even set up a sterling deposit account! There are currently branches of the Halifax, Barclays & Lloyds TSB open on the Costa Blanca. All you need to open an account is your passport. We can of course help you open a bank account & will even come with you to the bank. You can transfer money from the UK to Spain direct from your own bank or you can use one of the many specialist currency transfer companies. Remember you will get the business currency exchange rate which is always higher than the tourist rate offered by travel companies, the post office & some banks. The rate you will get depends on the exchange rate at the time. The cost to send currency to a Spanish bank from the UK can vary from nothing to around £25.00 per transfer. Beware however most Spanish banks charge to receive funds from an overseas bank and from other Spanish banks. A typical charge is around .04% of the amount transferred. Our advice is to use one of the currency exchange companies who guarantee no receiving fees in Spain. Set up accounts with several of them & play one off against the other to get the very best exchange rate.
How easy will it be to rent my property, how much rental income could I expect & how much are the associated costs likely to be?:
Most Costa Blanca properties are easily rentable due to the massive holiday & golf market demand. How much & how often you could rent your property depends on the size of the property, if it has its own pool, the location & the time of year. The rental costs would depend on much the same factors.
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