Mortgages are available from Spanish banks and financial institutions for non-Spanish residents providing the applicant satisfies the financial criteria and the property value is correct. For non-residents the maximum amount that is normally available is 70% of the valuation figure or the purchase price, whichever is the lesser.

The most expensive part of selling a property is normally the Estate Agents fee which is usually 5% (plus VAT of 21% of the fee). Other expenses can be Capital Gains Tax, if sold at a profit, Plus Valia Tax and legal fees normally 1% (plus VAT). Once again Greenfields will provide a full and detailed breakdown as soon as the full details are known. Please note that for a non-resident seller, 3% of the selling price is paid to the Spanish tax office on account of any potential Capital Gains Tax. This sum, or part of it, can be reclaimed if the retention payment is more than the actual CGT due provided the seller’s yearly taxes are up to date. Capital Gains Tax currently charged at 19% of the net profit.

The first step normally, is that a buyer secures the property by paying a reservation deposit to the agent or lawyer, typically 6,000.00€. This sum removes the property from the market and enables time for the seller’s lawyer to provide property documentation to allow the purchaser’s lawyer to undertake due diligence to ensure that the property legalities and planning issues are all in order. The reservation contract will provide a basic timescale to enter into a full private purchase contract, when the balance of the 10% deposit would be paid, and the timescale for completion of the transaction at the Notary, when the balance of funds is paid and possession of the property handed over.

Whilst it may not be strictly necessary it is most advisable to make a Spanish Will to deal with Spanish assets, this prevents heirs becoming involved in time -consuming and expensive procedures where there is no Spanish Will. If a property owner relies on the Will in his own country, this has to be translated and validated in Spain, often with complicated certificates of law required. A Spanish Will avoids these problems and Greenfields can arrange with you after completion to have Spanish Wills drafted and executed at the Notary.

In the past when, Inheritance tax rates were very high, it was often considered tax efficient to purchase in a form of a company structure, usually involving an offshore holding company, to reduce future Inheritance Tax. However, inheritance tax rates in Andalucía are now very generous allowing every “closely related” beneficiary an Inheritance tax free allowance of up to 1,000,000.00 € making a complicated company structure unnecessary for normal purchases, as opposed perhaps to business related purchases.

Every property owner in Spain has to complete a yearly tax return before the 31^st December relating to the preceding year. The tax return relates to Imputed Income Tax and Wealth Tax. Imputed Income tax is charged to non-Spanish residents and is based upon the value of the property as assessed by the local authority (valor catastral). It will normally not exceed a few hundred euro per year. Wealth tax is only applicable if a person owns property worth more than 750,000.00€. Please note that if you actually rent out your property and receive real income, as opposed to imputed income, you have to complete a tax return every quarter, calculate and pay the actual tax due.

This is the Spanish equivalent of Council Tax. It is calculated by reference to the valor catastral and typically for a two bedroomed apartment in the Marbella area will amount to around 800.00€ per year.

This is distinct and separate from Capital Gains Tax. It is paid by the seller. It is levied by the local authority and is calculated by reference to the increase in the value of the land associated with the property since it was last sold or transferred. This is assessed by the local authority. In the past it was charged even if the actual property was being sold at a loss which was of course most unfair. However, as a result of successful court challenges over the years this is not now the case i.e. a property has to be sold at a profit for it to apply. Greenfields will advise you of the Plus Valia applicable on your sale.

Most properties are located in a development comprising of other properties. The development is administered by a community of property owners (Comunidad de Propietrios). These are run in a similar fashion to that of a property management company HOWEVER the community is made up of all of the property owners and each owner has a share of the community assets and is responsible for a proportion of the running costs of the community. The community deals with all common areas and facilities including, in the case of flats, the maintenance and repair of the actual buildings as well. The community votes in a president from one of the owners and the community appoints administrators to effectively administer the community matters and prepare the accounts and budgets etc. Community fees are normal charged 4 times per year in accordance with the budget and forecast prepared by the administrator. Greenfields will check the community and obtain the minutes of the last community meetings to ensure all is in order.

If your home country is in the euro then this is by a simple bank transfer however, if not, Greenfields would normally recommend a money exchange company which gives much better rates than using a bank and saves considerably on fees and commissions.