BUYING PROPERTY IN SPAIN:

Spain, located in the southwest of Europe is an enchanting place filled with sunshine fields, fantastic beaches, beautiful cities and towns full of architectural wonders and rich cultures. On account of all this idyllic beauties, it is one of the favorite destinations for investors. Investment property in Spain is a growing trend amongst many foreigners and non-residents. Buying property in Spain is favored because the price rates are relatively lesser in many regions in Spain than in other countries.

The market values of the properties are also continuously increasing and investment property in Spain is a remarkable business venture. Mortgages for buying property in Spain are easily available. Investment in Spanish property offers a regular return on investment for investors.

Real estate in Spain is a thriving business that brings a lot of foreign investments. It is a booming business which includes buying, selling and renting out properties. All kinds of property - off plan, resale, buy-to-let, and leaseback - are available for sale in Spain. Off plan property, buy to let property are some of the popular kinds of properties for sale in Spain as they serve as good long term investments and a great source for regular income. However, Property for sale in Spain has to be thoroughly investigated before purchasing.

The processes involved in buying a property in Spain:

• Reservation fee has to be paid once a property is chosen for purchase. This helps in freezing the price of the property. This amount will be deducted from the deposit.
• Buying property abroad requires an NIE number for foreign investors to carry out any financial transactions with regard to buying investment property in Spain.
• Rules and procedures differ from town to town and hence it is always better to handle them with the help of a legal estate agent.
• It is advisable to have a legal advisor or lawyer to assist you while buying property in Spain.
• The lawyer can help in verifying the property documents, check for any mortgage pending, and other legal aspects thereby making your investment property in Spain a hassle-free one.
• A contract is drawn between the buyer and seller with all details such as price, payment date, for ownership transfer and other legal aspects. It has to be drawn with the help of the lawyer to check all the rights and obligations of both parties.
• While buying property in Spain, 10% to 30% of the property amount has to be paid as an initial deposit.
• Payments are based on the terms and conditions stated in the contract.
• At the completion of the payment, the title deed is transferred to the buyer by the seller.
• Hidden costs such as registration fee, lawyers fee, notary fees, stamp duty, Insurance and others has to be carefully included while calculating the investment amount.

Finance for investment property in Spain can be got easily from the help of Spanish mortgages. Mortgage is available up to 80% of the property value. The NIE number is required to claim mortgage in the bank. Many banks have branches in most of the countries in Europe, Australia and Canada and readily offer loan to non residents. Some banks even lend loan based on their properties back at home. In short, investment on property in Spain is one of the smartest ways to invest in real estate.

OFF PLAN PROPERTY VERSUS RESALE PROPERTY IN SPAIN

Spain is a great country with a good mix of fine weather, rich culture and idyllic beauty. No wonder that there is an increase in demand for property in Spain by foreign investors. There is a good demand for both off plan Spanish property and resale properties which include apartments, studios and villas for sale. So, if you are looking to buy property abroad, Spain can match your holiday and investment principles.

The main difference between Off Plan property and Resale property lies in ownership and issues regarding property, its completion and sale. If a buyer is provided with only a property plan and the property is sold even before construction, then it is said to be an off plan property. Off plan property in Spain is referred to as a new development. The finished property will only be a replica of the property plan. In today’s market most of the investment properties in Spain are sold even before the completion of construction. A resale property is one which is sold one or more times. An off plan property in Spain would be sold primarily by the property developers while resale property is sold by owners or agents.

When selling an off plan Spanish property, the developer’s initial interest would be in selling as many properties as possible in the new development. The greater the number of properties sold, the lesser the need to generate funds for developing the property. So, in the beginning the developer sets the price below the market price. However, during the construction process the price of the building might go higher than the market price. In the case of a resale property in Spain, price would be a fixed one or will be negotiated between the buyer and the seller. A contract has to be signed for off plan Spanish properties before the construction is completed. It is highly recommended to have a legal advisor during the process. A smaller deposit is made during the initial signing off while the remaining money is paid at the completion of the project.

On the other hand, in a resale property, one exactly knows what they are investing in. One has to have his cash ready if he wishes to invest in resale property in Spain as 10% of the price is placed as a deposit while the remaining 90% of the price is settled when the title deed is transferred. A thorough inspection has to be made before buying a resale property in Spain as sometimes modernization or renovation expenditure might cost you more than that of a new building.

When buying an off plan property in Spain, some developers help buyers in getting mortgage at banks. But in case of a resale property, the buyer has to arrange for finance on his own. The VAT for a new development is slightly higher than the transfer tax of resale property.

But as a buyer, you have to be very careful about the laws and regulations of the region. A Spanish lawyer who can speak your own language is highly recommended for both kinds of investment. The legal advisor can run a background check on the property, check for authentication of the title deed and other legal documents. Spanish mortgage is available for both new and resale properties. The mortgage amount depends on the value of the property. For instance, if it is a villa for sale in Spain, then its amount will be judged by its value and the general property market trends at that particular time. NIE number is the tax number that is required to buy a property in Spain.

In spite of these advantages, the annual investment on property in Spain has been decreasing for the past few years. The Spanish property inflation rates have been falling since 2003.