How to buy a house in Spain 10 TIPS

Are you dreaming of your place of paradise on the breathtaking coast of Spain? Let´s turn that dream into a reality. Today, I’m sharing key insights into the unique world of Spanish real estate on the beachside

If you’re serious about turning this dream into a reality, it’s crucial to understand that the Spanish buying process  is quite different from what you might be accustomed to in your home country. Dealing with a different language, legal system, and customs can be challenging. Given that this investment is likely to be one of the most significant in your life, it’s essential to approach it with care and thorough understanding.

I’m Cornel, your reliable guide, a person to trust and I’m here to assist you. However, it’s important to note that each Spanish property purchase requires an individual legal assessment based on documentation, current registrations, information from external parties such as government agencies and the Town Hall, and often the involvement of an architect. This assessment takes into account the unique circumstances and preferences of both the buyer and seller. We are talking about properties in the VALENCIAN COMMUNITY

Understanding the key differences in the Spanish process is vital.

It’s important to recognize that the 17 autonomous states within Spain have their own laws, taxes, and institutions, adding another layer of complexity to the process.

Many buyers mistakenly believe they own a house once a verbal price agreement is reached. However, true ownership is only established after signing the purchase deeds at the notary. Beware of signing contracts without due diligence, as this can lead to financial loss, missed opportunities, or purchasing a property with legal issues.

On the other side, some people are too scared by a lot of stories on the internet and that is not necessary either.  Surely, you can safely buy a house in Spain, as long as you know what you are doing. So just take some time to read until the end to be aware of the aspects in the buying process that you need to pay attention to.

To help you navigate this complex process, I’ve compiled some  important tips in a short video and that you can find here: TRUSUN INVESTMENT. Take the time to watch it to gain insights into the aspects that require attention during the buying process. So, you will have a problem-free, stress-free, and, above all, safe purchase.

If you find the information helpful, I’d appreciate it if you could click the ‘like’ & «share»button. Now, let’s delve into this important information that will save you a lot of time & money:

Tip One: Do Your Due Diligence

– Allocate the necessary funds for legal fees; skimping could result in substantial financial losses.

– Consider obtaining Power of Attorney to handle matters without being physically present in Spain.

– Calculate all costs, including taxes, and establish your exact buying budget.

– Scrutinize the reservation contract and manage all payments during the process.

If you would like to receive an example offer for the total buyer costs of a purchase in the Valencian community, just send me a WhatsApp with your budget.

Tip Two: Find Your Trust Real Estate Agent

– In the area of the Valencian Community, buyers typically don’t pay a real estate commission.

– Locate a reliable purchase agent who represents your interests, understands the local market, and can expedite the process. An experienced real estate agent knows the local market, knows the prices, and has already seen many houses from inside, which saves you a lot of time.

– Sign a reservation contract quickly after agreeing on a verbal price to initiate the legal procedure and make it conditional on obtaining the mortgage if you will need to ask for it.

Tip Three: Check the Vivienda de Uso Turistico License

– If you plan to rent out your property, obtain a VUT-rental license. Check the Vivienda de uso Turistico  License . Do you want to rent out your new house/apartment to tourists, start a B&B maybe, or just rent out a few rooms?   Well, in that case, you need a VUT-rental license.   With the corresponding VUT number, you can register on well-known rental websites like Booking or Airbnb. 

– Ensure compliance with practical conditions for renting, such as having a fire extinguisher, first aid kit, and complaint forms.

– Also, guests must be registered through the police platform within 24   hours of arrival, just like with hotels.

– Consider the First Occupation License for urban homes and check for any restrictions from the Community of Owners. 2 more important steps for rental: check whether your liability insurance needs to be expanded for commercial rental and also check at the Community of Owners (that´s the Comunidad de Propietarios) whether there are any specific restrictions regarding renting out your property.

.   The profit of your rental must be declared through the IRNR (IMPUESTO SOBRE LA RENTA DE NO RESIDENTES- NON-RESIDENTS INCOME TAX) (this is about 19%) or through the normal IRPF. Personal Income Tax  (Impuesto sobre la renta de las personas físicas)- Certain housing expenses are deductible.

Tip Four: Understand the Spanish Legal Process

-The 17 autonomous states within Spain have their laws, taxes, and institutions, and for that reason, the process or the taxes might be different from one to another.

– Recognize that verbal agreements are not binding; true ownership is established after signing the purchase deeds at the notary.

– Be cautious about signing contracts without thorough due diligence, as this can lead to legal issues or financial loss.

Tip Five: Plan for the Mortgage Process

-If you need a mortgage, you will need a power of attorney to delegate because the process will be longer, and delegating will be easier for you.

– Allow 6 to 8 weeks for the binding mortgage offer, considering the extended timeline post-2019 law changes.

– Negotiate a reservation contract subject to a mortgage.

– Obtain your NIE tax number early in the process to avoid delays. Right now, the NIE process is more complicated because is difficult to obtain the appointment. But we can always find a solution. Send us a message if you need help.

– Be aware of all information related to the mortgage, including interest rates, discount points, and commissions.

Also, be aware of all information such as interest rates, discount points for secondary products such as insurance, the commissions for opening or early cancellation, etc.

How much   mortgage capital you can get depends on different factors:

– you can spend about 30%   of your last net annual income on housing costs and debts, both in Spain and your own country.   It´s therefore very important that you don´t quit your job before you apply for the mortgage. – if you are a fiscal resident in Spain, you usually can get a maximum of 80% financing of the valuation and otherwise, it´s up to 70%.

– the valuation or taxation is done by an official valuation company and keep in mind that the amounts usually are lower than market value. 

Anyway, the bank will always choose as a valuation the lowest price: either the valuation or the price in the contract.

Tip Six: Consider Differences in New Construction & Second-hand

– Understand the financial, legal, and practical disparities between new and existing constructions.

– Be aware of additional costs such as AJD stamp duty (Actos Juridicos Documentados) and set up new service contracts promptly.

On a new construction, you pay VAT over new construction and in an existing building, you pay the ITP transfer tax.

In addition to VAT, you also pay AJD (Actos juridicos documentados), or stamp duty, over the registered value in the deeds.  

Keep in mind that setting up new service contracts   for water and electricity should take no more than 5 working days, but sometimes can even take up to 2 weeks after completion.  

Tip Seven: Ask About the Community of Owners and Urbanization

– Request a certificate from the Association of Owners to ensure the seller has no outstanding debts.

– Obtain general regulations from the Community, including any restrictions on tourist rentals.

– Distinguish between the Community and urbanization, as they are often confused.

Tip Eight: Be Thorough in the Final Check

– Conduct a thorough final check on the property before purchase.

– Keep proof of payment for all transactions and retain documentation for any improvements made.

– Understand that any lawsuit in Spain is expensive and time-consuming, so, doing your due diligence is essential.

In any case, remember that any lawsuit in Spain is a very expensive and time-consuming matter.   So, always make sure, that a thorough final check is done on the property before you purchase the house.

Also, if you will make improvements keep all bank statements and official invoices for value-increasing renovations, as these are deductible from a potential future Capital Gain Tax. 

Also, you can find more information on my page  cornelpopescucom. 

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Tip Nine: Learn the language

Learning the language can enhance your experience in Spain. Your time in Spain will be so much more fun if you learn the language and this is very much appreciated by the Spaniards

Tip Ten: Imagine that you come here and face any small problem …

A help is always welcome – having a Spanish phone number, finding the things around you, taking a taxi, finding a carpenter ,a plumber an electrician .After buying the property – somebody to to take care of it ,somebody to clean it or to just prepare it for your arrival. Imagine that a pipe will be broken into your apartment or in your neighbor’s apartment…and you will be affected. Including being at 200 km away will be a problem if you don’t have someone looking for your property, but being at 3-4.000 km, away.

So, having a person to trust is not an expense, is an investment in your property & in your peace of mind.

For more detailed information, and great bargains visit my channel TRUSUN INVESTMENT. If you find this video helpful, don’t forget to click the ‘like’ & share button.

Thank you for reading, and best of luck in finding your dream home in Spain!

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Cornel Popescu

Bienvenido a una nueva etapa en tu vida

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