FINANCING

I have just exchanged contracts on my flat and don’t know how to go about contracting utilities. What do I have to do?

At the time of exchanging contracts, you were given a folder containing essential documents. There you will find all the information you need to contract utilities, together with useful addresses and telephones. If you have any further queries regarding this, please call us on 977.69.27.26

What expenses will I have to factor in when asking for a mortgage?

When formalising a mortgage, you should factor in the following expenses: Origination fee, valuation, formalisation expenses (deeds and land register), notary expenses, insurance fees, agency fees and stamp duty.

How much money can I borrow?

Normally, the amount requested from the bank should not exceed 80% of the property value (market value of the property excluding sale taxes). However, there are banks that offer up to 100%.

What documents do I need to provide in order to be given a mortgage?

Your three last payslips, your last tax return, a confidential statement of assets (optional), the property sale and purchase contract, a land register certificate and the last receipt of your property tax payment (urban contribution).

Can commissions and fees be negotiated?

Every bank has its own policy in this sense. It is always advisable to compare mortgage conditions of different lenders in order to establish what conditions may be improved.

How long will I have to wait until I get a mortgage?

Though it does depend greatly on the lender, the average is between 10 days and one month. What is the best term? This question depends on the financial situation of each borrower. The shorter the term, the less interest you pay. On the other hand, the shorter the term, the greater the monthly payments.

Can commissions and fees be negotiated?

Every bank has its own policy in this sense. It is always advisable to compare mortgage conditions of different lenders in order to establish what conditions may be improved.

LEGISLATION

What role does the notary have?

The notary provides information on all legal aspects that come into play in the sale and purchase of a property. Notaries provide legal validity for the documents presented by both parties (seller and buyer) related to the property itself. A notary checks these documents in order to verify that everything is in order.

The State establishes notary fees, which are fixed on the basis of a scale that varies depending on the amount of the recorded price. The notary usually acts: as an independent advisor for both parties, checking that all documents are correct; and as a provider of information regarding key aspects of the purchase: price and method of payment, physical and planning aspects of the property.

The notary also informs the parties of the consequences of not paying the corresponding taxes in a sale and purchase transaction.
S/he also intervenes as a public notary, providing legal validity to the contents of the sale and purchase deed.

What documents are necessary for the purchase of a new build home?

We proceed to list the documents required by the notary to record and formalise the purchase of the newly built home, which will be provided in its entirety by GRUPO GAUDIR in its capacity of builder of the property:


Planning certificate, title register and a warranty of habitability.


Proof of legality of the construction is provided by the following documents:

Building license and certification by the competent technician stating that the works have been completed in accordance to the project approved by the local council, license of the building's first occupancy (related to its habitability) proving the effective compliance of the legal regulations, warranty of habitability and inscription in the land registry.

What should the property title deed include?

The deed should include:

Both parties involved (seller and buyer).
Physical description of the property.
The seller’s title deed (deed by which the seller bought the home in the past).
Inscription in the land registry of the title deed in the name of the seller.
Value of the property.
Any charges or taxes applicable to the home.
Payment of owner’s association expenses.
Price of sale and method of payment.
The subjection of the transaction to the different administration regulations and tax obligations derived therein.

Once the notary has read and explained the sale and purchase deed, you will have to sign it together with the notary and the seller.

Who is involved in processing a mortgage?

The parties that take part in processing a mortgage are: the seller, the buyer, the bank, the notary, the agency and the land registry.

What taxes must I pay if I buy a new build home?

Value added tax, stamp duty and property tax. In order to know the amount of VAT payable, you must multiply the real value of the property as it appears in the sale and purchase deed by the rate of 7%. Bear in mind that there is an exception: council housing has a special reduced VAT rate of 4%.

Must I contract insurance for damages covering the value of the valued property?

According to mortgage laws you are obliged to pay for insurance for damages for the valued property. Not having this insurance is considered a serious offence by the property who has given you the mortgage. It is also useful to obtain other insurance contracts to cover any unforeseen circumstances, such as a multiple risk home insurance, life insurance or mortgage insurance.

Buying a home, a profitable way of saving
No bank can offer their clients an asset more profitable than property. The average price of property in Spain has gone up in the last five years by 220 %. In some tourist areas, the increase has been even higher. Not even investment funds or savings plans can offer you anything close to these rates.

How is a sale and purchase deed processed?

First, it is necessary to issue a copy authorised by the notary; then it is necessary to pay any applicable taxes according to the type of property (first or second hand) to the tax authorities; then, the paid deed must be presented before the land registry; and finally, the deed must be inscribed in the registry.

It is advisable to modify the land register where the property is recorded in order for it to show the new owner, and for all subsequent procedures to be addressed to you.

What is property tax?

It is a direct tax which is demanded obligatorily by local governments, and is jointly managed by the state administration, which taxes the registry value of properties.
This tax, unlike others, must be paid every year. It is charged on January 1 every year, except in Madrid, where it is charged between October 1 and November 30. This tax must be paid when you become the owner of the property you have acquired (be it new build or second hand).

It is important to note that, for the year when you purchase the property from the ex-owner (seller), the latter must pay the proportional part of the tax charged that year corresponding to the part of that year during which they have owned the property.