Olg Spain - Spanish Mortgages Spain

Up to 50 year term   Up to 100% of the purchase price   Up to 30 years interest only   Up to 60% self certified   Low interest, no early repayment fees or redemption penalties.

For specific advice, an individual quote, an agreement in principle, or just an informal chat, please complete the enquiry form and one of our experienced advisors will be in touch.
 

Transfer Tax on a resale property: 7%   IVA (Spanish VAT) on a new build: 7%   Stamp Duty on a new build: 1%   Lawyer fees: 1%   Notary & land registry fees: 1%   Bank fees 1-1.5%   Stamp Duty on mortgage 1.8%

Q. How long will it take to obtain a Spanish mortgage?
The mortgage application process will normally proceed with a verbal indication following an in depth discussion with a qualified mortgage advisor. This will then be supported with a completed application form, and depending upon the complexity of the application, an Approval in Principle can be provided. Then subject to the relevant documentation such as bank statements and P60s etc a confirmed offer will be issued by the bank. The entire process can be completed in 21days, subject to everything working perfectly but in practice the normal timeframe is more like 4-8 weeks.

Q. How do I apply for a Spanish mortgage?
Submit your details to OLG and we will arrange for an initial telephone conversation or email with a qualified mortgage advisor to verify the basics and provide you with full details.

Q. What is an NIE?
Non-resident property buyers are required to obtain an NIE number. This is a "Numero de Identificacion de Extranjeros", a fiscal identity number necessary in order to purchase property. An NIE number can be obtained from the local police station or your Spanish lawyer can deal with it for you. This process normally takes 2 to 4 weeks.

Q. Do I need building insurance?
Building insurance is compulsory, as in the UK, and an insurance certificate is required by the Notary.

Q. What is a Nota Simple?
You will need to obtain a copy of the "nota simple" before valuation. This is a basic record of the property details from the “Land Registry”, it shows the size of the property as well as any outstanding debts attached. The purchase contract must be finalised in the presence of a "Notary", a public official appointed by the Spanish government to witness the signing of all legal documents. On the completion date, all the parties (or their designated representatives) visit the Notary, where the title deeds (escritura) are signed. At this point you pay the balance of the purchase price and all fees and taxes. Once this is complete, all transfer taxes and fees are paid to the tax offices.

Next the notary will register the transfer of ownership at the land registry. 'Plus valía', a tax on any increase in the value of the land, is levied in some areas. This registration may take a while; you can ask for a copy of the records from your notary. It is called a "copia simple".

Q. What is an Escritura?
The public title deeds of purchase (the "Escritura"). These will be prepared by your lawyer and must be signed in front of the Notary.

Q. What is involved at the Spanish Notary?
The Notary (Notario) is an official appointed by the State who checks for the capability of the parties to enter into an agreement and the documentation. A sale is formally completed when the public title deeds of purchase are signed before a Notary, the final payment is made and possession given to the buyer. On the assigned day, the buyer and seller (or their authorized representatives) will attend the Notary's office to sign the title deed (Escriturade Compraventa). At this point, the payment of the remaining balance is made and possession passes to the buyer.

Q. What is Spanish property registration about?
Once signed, the Notary will fax a note of the title deeds to the local land registry. Your lawyer will arrange payment of all the relevant transfer taxes associated with the purchase and will handle the formalities of the registration of your title deeds. Final registration of the deed may take up to three months. Similarly, your lawyer should arrange for the transfer of accounts with local suppliers of utility services, such as water and electricity and organize their payment through a local bank.

Q. What costs are involved in the property purchase?
There are, in principal, three fees and two taxes to pay when purchasing a property with a mortgage in Spain. As a rule of thumb, you should estimate that the combined total of these amounts to be around 12 to 14 per cent of the purchase price.

Q. What fees are involved?
Legal fees are normally 1 to 1.5% of the purchase price plus VAT currently charged at 16%. Notary fees - scale is fixed by law and normally ranges from 300 euros for lower priced properties to 1,200 euros or more for higher priced properties. Land registry fees are generally about 20% less than Notary fees. Both these fees are charged on the purchase and again on the mortgage. Bank opening fees are normally 1 to 1.5% of the mortgage. Bank valuation fee range normally 300 to 1,200 euros or more for higher priced properties.

Q. What Spanish taxes have to be paid?

(ITP or transfer tax) - ITP applies to resale properties only. It is 7%.

VAT (IVA) – IVA applies to new properties only. It is 7%.

Stamp Duty (AJD) of 1% is payable when purchasing a new property. Stamp Duty is also payable on mortgages at about 1.8%, it depends on the term of the mortgage.

"Plus Valia" is a local municipal tax and is based on the officially assessed increase in the value of the land since the last time the property changed hands. This tax is normally payable by the vendor but it may be stipulated in the Private Purchase Contract that the buyer pays. This tax may range from a few hundred euros to as much as several thousand euros on larger properties with a lot of land. Who pays this will be discussed in negotiations and in consultation with your lawyer before signing the Private Purchase Contract (same as Exchanging Contracts in UK).

Your lawyer will be responsible for collecting the required documentation, advising the bank and making arrangements for the required funds to be available for completion. These finances will normally be a mixture of a Spanish mortgage, cash from savings, and any other money that has been arranged. Remember to make these arrangements first! Following completion of the purchase, your lawyer will arrange for all your utility services to be available as soon as possible. For a new property payment will have to be made in advance to connect utilities and the cost can be 500 to 1,000 euros. The property deeds will need to be registered at the land registry; this will normally take up to 3 months.

There are, in summary, three fees and two taxes to pay when purchasing a property in Spain. As a rule of thumb, you should estimate that the combined total of these amounts to be around 12/14 per cent of the purchase price.


Q. Do I need a Spanish lawyer?
Your lawyer will be responsible for collecting the required documentation on the property, advising the bank of the legal details and making arrangements for the required funds to be available for completion. These finances will normally be a mixture of a Spanish mortgage, cash from savings, and any other money that has been arranged. Remember to make these arrangements first. Following completion of the purchase, your lawyer will arrange for all your utility services to be available as soon as possible. The property deeds will need to be registered at the land registry; this will normally take up to 3 months.

Q. How do I transfer money from the UK to Spain?
It will be necessary to transfer funds to pay for the deposit and relevant costs. This can be through your bank or an Foreign Exchange (FX) company; which is the cheapest option in most cases. OLG can point you in the direction of good FX Companies.

	Payment of the relevant transfer taxes associated with the purchase
	Registration of your title deeds (which may take up to 3 or 4 months)
	The transfer of accounts with the local utility suppliers, e.g. water, electricity and organise payment through your bank account

N.I.E. (Número de Identificación de Extranjeros)
This is an identification number for use by foreigners making financial transactions in Spain. This is obtained from your local Police Station at the foreigners' department.

The fees:
There are two fees when purchasing a property in Spain

1) Notary fees: They vary depending on the value of the property and various other factors.

2) Land Registry Fees: These vary according the locality, type and value of the property. They are not strictly taxes but rather administrative fees.

The taxes:
1) IMPUESTO SOBRE TRANSMISIONES PATRIMONIALES (ITP): Transfer tax payable when you purchase either land, house, apartment or a building plot from a private owner. Depending upon "Local Parliament" (Comunidad Autónoma) it can be 6% or 7% of the declared value of the property as expressed in the "Escritura de Compraventa" (Deed of conveyance).

2) IMPUESTO SOBRE EL VALOR AÑADIDO (I.V.A.): This is the Spanish equivalent of VAT. It is paid instead of I.T.P. when you buy from a Developer rather than the private individual. It is charged at the rate of 7% on the construction of a house and any associated buildings. It is also charged at the rate of 7% on both the plot and the house if you purchase both at the same time.

3) AJD (Stamp Duty): In addition to IVA you will also have to pay a document tax or stamp duty which can be up to 1% of the purchase price.

4) Plusvalía: It is due to the increase of the legal value of properties. Normally payable by the vendor but it may be stipulated that the buyer pays. Who pays this will be discussed in the negotiations and in consultation with your Lawyer.

5) Capital Gains Tax (Impuesto sobre la renta de no residentes): Only when the vendors are also Non-Residents, there is a tax applied which consist on the retention of 5% of the property sales price. This tax is normally payable by the vendor.

Spanish Property Taxes

1) IMPUESTO SOBRE BIENES INMUEBLES (I.B.I.): This is the main local property tax. The amount of the tax is calculated by reference to the "valor catastral" (official value of the property) registered in respect of all properties in Spain. The percentage of that valor catastral charged as tax varies from area to area. The official values were, until recently, very low. They are now rapidly rising pursuant to a policy of the Spanish Government that will result in the official values approaching the real value of the property.

2) CONTRIBUCION TERRITORIAL RUSTICA: This is the same as IBI but for rural areas.

3) TASAS Y CARGAS: Some municipalities raise additional taxation in relation to the services that they supply to people in the area. They may include rubbish collection, cleaning of the streets and beaches, etc. Municipalities can also include a charge for the use of a vehicle in the area, although not all do. The amounts of these "tasas" y "cargas" are not generally high.

 

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Please Note

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. CHANGES IN THE EXCHANGE RATE MAY INCREASE THE STERLING EQUIVALENT OF YOUR DEBT.