Buying a new Spanish property off-plan means that you will be the first person to live in the property, everything will be brand new, fully functioning and you won't need to do a thing when you move in. Some people, however, may feel that what they gain in convenience they lose in character. You may feel that new properties do not have the charm, quirks or uniqueness of an existing freehold property.
A new-build property in Spain is most likely to be an apartment or town house on an urban development with similar - even identical - properties. You have the benefit of high quality communal facilities, so by paying a quarterly service charge you save on the hassle of maintaining your own garden and swimming pool. You also have peace of mind when you are away that the development is lived in and looked after.
But you may prefer to live in a more rural setting, whether a finca in the country or an old town house in a typically Spanish village, and you may want somewhere that you can renovate or improve according to your own taste. This comes with the worries of having to deal with the upkeep yourself and what happens to the place when you're not there. In terms of an investment, buying off-plan is no longer the quick road to riches it once was on the Costa Blanca, but it can still be a worthwhile investment if viewed over a longer period. Properties are estimated to rise by about 10% in value this year, which means you will already have improved on your initial investment by the time it's built. Resale properties now account for the major share of the market on the Costa Blanca.
You can get either a Euro or Sterling mortgage, though a Euro mortgage is advisable to avoid losing money as a result of exchange rate fluctuations. Halifax and Lloyds TSB have a special service for British customers wanting to take out a mortgage on a Spanish property. Bancaja is a Spanish bank which specialises in mortgages and bank accounts.
Spanish banks will usually lend up to 70% of the property value to non-residents. Their choice of mortgages is more limited than that in the UK but it's a relatively simple process to secure a mortgage, provided you have evidence of income and a letter from your bank. If you are not a Spanish resident, you may have to provide an aval, which means someone who can guarantee they will pay in the event of you being unable to. Most mortgage products are repaid on an interest and capital basis, with a maximum length of 35years. Shop around for deals. Ask for a copy of the mortgage contract and take it to another bank to see if they can improve the offer, as they frequently will. You now need an NIE (see below) to buy or sell a house in Spain, even if you are a non-resident.
EU citizens can live and work in Spain without needing any visas or work permits. As soon as you arrive in Spain you will need to apply for a tax ID number (NIE) from your local police station. You can live in Spain for up to six months a year without having to pay taxes there and without being a Spanish resident. Over that period you are officially a Spanish resident for tax purposes.
Spanish Homes Just For You will guide you through the process from the start. First of all, you need to put down a small deposit, refundable if subsequent checks on the property or owner throw up anything unannounced. You will need to find yourself a good English-speaking lawyer (Spanish homes Just For You can make recommendations) and to have researched your mortgage options, if applicable. Then you can agree on the sales price and hand over your 11% deposit when you draw up a sale and purchase contract. Finally you need to sign the official document which transfers ownership of the title deeds and register the property in the land registry.
With off-plan properties you usually exchange a private purchase contract within 30 days and then hand over your first instalment, usually 15-30% of the purchase price. Your lawyer will advise you when further payments are due. On the day of completion, the balance of the purchase price is paid, and you (or more commonly, your lawyer) will sign the title deeds for the property, and the keys will be handed over. You should then allow 1-2 weeks before you can move in, in which time you can ask your lawyer to arrange for utility contracts with water and electricity companies.
If you purchase a home in Spain, Spanish Homes Just For You will recommend that you make a Spanish will. This will enable you to nominate your own beneficiaries to your Spanish property and to avoid the legal problems associated with Spanish Inheritance law. Your local Spanish lawyer will help you to prepare your will for a very modest sum and deposit it for you at the notary’s office.
We recommend that you budget 10% of the purchase price of the property in Spain to cover all the other costs associated with the purchase of your property. This is made up, basically, of two elements: tax, at 7%, and a further 4% to cover the costs of your lawyer, the notary, land registry fees and other miscellaneous items.
No one can predict exactly what the property market is likely to do, and recent changes in the Costa Blanca market now favour buyers who want to spend holidays in their properties and hold on to them for a few years rather than investors who want to sell quickly. The market is still rising, however, so anything you buy is likely to go up in value
If you purchase a property in any kind of resort or complex, having any kind of communal facility (basically, absolutely anything other than a free-standing villa surrounded by its own land),you will automatically become a voting member of a community of co-owners (communidad de propietarios). This is a legally constituted body required and governed by Spanish law (Ley de Propiedad Horizontal). It exists to maintain the communal facilities of the development, such as the communal gardens and pools, the tennis courts, the security service, the lifts and staircases etc. community fees (gastos de communidad) are paid monthly by each property owner to meet the global cost of maintaining these facilities. The community statutes show exactly each owners respective share of the community (cuota de participación), which is calculated using a complicated formula of plot and property sizes etc. These costs are normally paid automatically, by direct debit, from your Spanish bank account.
Costa Blanca South offers the biggest range of properties to suit lower budgets with apartments from £60,000. Murcia is cheaper still, though the infrastructure is less developed than on the Costa blanca. Costa Blanca North has a more mature property market and prices are higher. There are still relatively cheap houses and fincas to be found a short distance inland, as the overwhelming majority of foreign buyers still stick to the coast.
Murcia is one of the fastest growing areas of Spain, which includes the ancient cities of Cartagena and Murcia, as well as the beautiful Mar Menor. Murcia, also known as the Costa Calida, as been the recipient of huge capital investment from central government over recent years, the area has a fantastic road network, is served by two international airports at San Javier and Alicante, and a third base has been agreed at Corvera. There is plenty of land available to build, and the areas to be home to several top-class golf resorts and 5 star hotels within the next 10 years. Murcia has lot to offer for investors with a long-term view, but has also shown a healthy increase in property rices of 12.% during the last 12 months alone and the price per m2 is still approximately 20% less than the national average. From an investment point of view go for well-located properties that offer something exclusive - over time, these are most likely to continue being the most desirable properties. Any market is governed by supply and demand, and investors should take careful note of this.
There are still some great opportunities out there, but the fundamentals should always apply - quality and location.serving you with trust and confidence These are just a few answers to common questions, so why not submit any other questions or queries you may have