Thousands are leaving their home countries every year. With UK property prices at an all-time high many are considering selling up, buying a home abroad and investing the remaining capital to provide for their retirement years. Equally, many are buying a second home. In both cases there are certain costs that must be taken into consideration in addition to the price of the property.
You may have your heart set on a particular region or style of property, but if you are on a tight budget it may be worth considering the alternatives - perhaps a neighbouring region or a resale rather than a new build. Likewise, certain types of property can seem very attractive, but you should be aware of their running costs, and whether they really suit your needs; consider the security implications, for example, if your second home is a detached villa rather than an apartment in a secure complex.
Having found a property and you have decided to make an offer, your first step will be to ensure that you have the funds available to pay the 10% deposit. You’ll also need to budget for the costs associated with your purchase. They can be a further 10% to 12% plus on top of the purchase price.
Sellers of pre-existing “resale” property, may seek to persuade you that a percentage of the purchase price should be paid “under the table “ in “black money” or cash. It is hard to resist but don’t be tempted down this route as it will result in an under declaration of the purchase price on the Escritura – or purchase deed – and leave you will an artificially inflated Capital Gains Tax burden when you come to sell. It is also illegal.
Mortgage funds may be available to meet the needs of purchasers in Spain. There are a variety of different options but self-certification and interest only products are starting to appear. These will, usually be based on highly competitive interest rates which still compare very favourably with the, for example the UK. Applying for a mortgage in Spain is a fairly complex procedure and I’d recommend that a bilingual broker be retained to represent your interests.
© The Rights Group SL 2006 (Marbella)
Mark FR Wilkins
www.therightsgroup.com (under review)
+34 600 343 917
Please note that the information provided in this article is of a general interest nature and intended as a basic outline only. You are well advised to contact a professional for advice specific to your circumstances. Nothing contained in this article should be seen or taken as the writer or publisher providing legal or financial advice.