Buying a Spanish property isn’t all sun, sea and Sangria. It is essential that you do your research and follow the correct guidelines. Failure to do so could leave you out of a pocket and a home. Thankfully, we have put together the 7 essential tips you need to know to successfully buy your Spanish home.

Use a Spanish Lawyer
Find a good quality Spanish lawyer who speaks English and is based in the area you are intending to buy in. Where possible always use a lawyer who has come recommended

Title Deed
Your lawyer will be tasked with locating the property owners’ title deed or EscituraPublica or escritura de compraventa. This is the only guarantee of a property title in Spain. Included within the deed is a description of the property, details of the owners and information on any changes that may affect the property, this could include mortgages, water, wells and rights of ways.

This is a very important and handy document, it is also a private document and could have inaccuracies within it. Check the public registers for the property you are buying. You will be able to compare information in the Property Register and the Catastro.

IBI
The IBI or “Contribution” is the receipt of the owners’ annual property tax, known in Spanish as Impuesto sobre Bienes Inmuebles. This is an essential document as it confirms what the owners have paid in taxes in the last year. Ensure that your lawyer prior to completion has reviewed this with data going back as far as five years. Failure to do so could leave you liable for any unpaid taxes.

Property Register and Catastro
This is the public register for all properties purchased in Spain. After buying your new Spanish home you will receive an “escritura de compraventa” which will confirm you are the new legal owners. Make sure your lawyer updates the Property Register with your details.

The Catastro office is in place to confirm the boundaries and location of your home, while providing a brief description of the property. Like the property register your lawyer should update this with your personal details.

Holding deposit
It is common practice in Spain to pay the vendor a holding deposit once your offer has been agreed. This will ensure no one else can now buy that property. Expect to pay in the region of €3,000. Your lawyer will draft your private purchase contract which will include the terms of the sale. Once this contract has been signed and you have paid a 10% deposit (this may vary) you have in effect exchanged contracts.

Property Sales Tax
The amount you pay in property sales tax will vary depending on the type of property and vendor. If the vendor is a property developer then the buyer will pay 7% in VAT and 5% in AJT which is the stamp duty. If the seller is not a developer, the buyer will pay 7% in property transfer tax.

Be honest!
You may be tempted to under-declare the value of your new home to reduce the tax you pay and avoid capital gains tax. There has been a major crack down on this from Spanish authorities over recent years resulting in substantial fines being issued to buyers who have tried to get away with this. Always declare your agreed price, failure to do so could see your dream home turn in to a nightmare.

Buying a new home may be a daunting prospect, but by following these simple tips you can ensure a happy and stress free sale

Bio
Andrew Potter writes for www.myonlineestateagent.com where you can find guides on how to advertise on Zoopla, Rightmove and Find a Property as well as lots of useful tools to assist in the sales and letting process.

Jane Sanders, whose company JSCS has recently helped 90 clients recover over £4M from the FSCS after they received unsuitable investment advice, said “borrowing money against your home that you cannot afford to repay is, in principle, contrary to regulatory rules. It should never be recommended unless there are extenuating circumstances. And the reason it should not be recommended, is because it cannot be defended if a complaint is raised.

“Furthermore, investing that money – which brings with it the risk of loss of the capital in any case – without which you cannot pay the mortgage therefore increases the chance that you will default on your loan. And if you default on your loan, you lose your home.

“This makes this type of recommendation risky, and the risk increases the older you are, and significantly so where you are retired, because you generally work off a fixed income. The other reason that this type of business is so frowned upon, particularly for pensioners, is because they have no ability to pick themselves up and dust themselves off financially if they do lose their home; they do not work, they cannot go out and earn the money needed, and they do not have the time to start over.”

The FSCS can help in these cases and, although there is a statutory maximum that can be recovered, when faced with getting a sum of money back that was all but lost, or losing your home, getting some money is clearly preferable.

You can go to the FSCS directly and it costs you nothing to do so, however Jane said that “our clients have often been turned down. Their arguments were sound, but when it comes to applying regulatory law to the facts of your case, ordinary lay people fall down.”

Jane advises that if you have found yourself in the same situation it is possible to find a solution. She states “all may not be lost, and there are resources out there available to you. Things to bear in mind, however are that: results are never guaranteed. It will depend on the facts of your case. It can take a long time to get a case through the FSCS, and you will have to be able to ‘hold on’ in the interim. And first and foremost, you may run out of time if you do not put in your claim in time.”

For anyone who believes they have received unsuitable investment advice from a UK adviser, Jane Sanders can be contacted by email jane@jscs.org.uk or telephone +44 1424 855446 for more information.

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What should surprise me is that people often make these sorts of arrangements without thinking them through fully. They think that they are coming up with a clever solution to their situation but often don’t know the law of the country that they are dealing with. Most of the time they do not think through the full implications of their actions and, in particular, often don’t think about what if things go wrong.

Needless to say in this case things have gone wrong. The relationship had gone sour and the “friend” now no longer has any money. The friend is no longer contributing to the cost of the properties and the documentation that doesn’t reflect the true reality of the situation.

Of course it is at this point that the clients think about taking advice and came to speak to me. The clients now want to re-structure the legal situation to reflect what has actually happened so that they can get more protection and have their names registered on the title deeds in Spain.

As a lawyer this whole story is backwards. It seems clear to me that the clients and their friend took little advice when they were buying the properties on the suitability of their proposed structure. I suspect (although I may be wrong) that the clients spoke to their UK lawyer and simply told him that they were buying the property in the UK without any mention of the Spanish property or their friend. I similarly suspect that their friend did exactly the same in Spain but didn’t mention the UK property.

Now it isn’t my job to judge the clients – after all, what has been done has been done and my job is to try and fix the situation as much as possible. At the time when they bought they thought that they were doing the right thing. However, the clients could have saved themselves a lot of stress, inconvenience and money had they arranged things properly in the first place. It may have seemed like a good idea to register each property separately and in some circumstances this could still have been the best solution, but in this case things have gone wrong and the clients now need to protect themselves.

Of course, transferring the property from one name into 3 names or even registering a charge against the property costs money – even if the registered owner of the property (the friend) cooperates. In this case they have all fallen out with each other and the “friend” is being uncooperative. This obviously makes things more difficult and therefore more costly.

The clients are now kicking themselves for not having thought of this particular scenario before and for getting themselves in a situation where they are now having problems. They made the mistake of thinking that nothing would change and that everybody would remain friends and be flexible. Experienced lawyers have seen it all before. We know what can go wrong even if the client thinks it unlikely. We therefore plan for the worst case scenario right from the beginning and try and protect our client as much as possible.

So what could the clients have done differently? Well for a start they could have spoken to a lawyer who understood the issues both in Spain and the UK. They could have taken advice on the whole picture rather than just getting advice on separate sections and putting the solution together themselves. They could have thought of the ownership structure as a key part of the transactions both in the UK and Spain. They could have been very honest with themselves and planned for the worst case scenario. However, we are where we are so we now need to try and rectify it for them.

Peter can be contacted at Chebsey & Co, 51 London End, Beaconsfield, HP9 2HW or www.chebsey.com or via telephone at 01494 670440 or via fax at 01494 670276 or by email at pje@chebsey.com

In the UK, although it may not seem like it to some people, were by and large law abiding and pay our relevant taxes. Yes, we will do what we can to legally reduce those taxes (tax avoidance) but few people get involved in hiding things from the tax man (tax evasion).  In other countries the black economy is a much bigger percentage of the whole economy than it is in the UK. In some countries it is endemic.  Obviously in such countries one way of increasing income is to clamp down on tax evasion – after all tackling tax evasion isn’t as much of a vote loser as increasing taxes!

The Spanish Government is one which has publically said that it is clamping down on tax evasion. The primary focus of tax evasion is people who work for cash and don’t pay any tax, but this clamp down is also manifesting itself in other ways. They are being quite successful in this and have recovered quite a lot of money.

Despite having said that in the UK we are generally law abiding and pay our relevant taxes it is also clear that, contrary to popular opinion, when Brits go abroad they quickly pick up the culture of that country. We quickly realise that nobody declares everything and believe that because everybody does it it is OK. We don’t do things properly like we would do at home. We cut corners and do everything to keep costs down. We also suffer from what I call selective amnesia. We conveniently believe that if we have a holiday home abroad we don’t have to declare any income in that country because we are tax resident in the UK, but then forget to tell the UK tax man because the property is abroad. Clearly you can’t have it both ways and you should pay tax somewhere but some people do try and get away with it hoping that nobody will notice. Of course the governments know that this goes on and look out for it. Most of the time people will get away with it because the authorities haven’t had the resources to investigate everybody. Now, with governments looking at increasing revenue, people are getting caught.

We are now seeing more people contacting us saying that they have received letters from the tax authorities in Spain over some sort of irregularity in their tax affairs. Recently I have seen two broad types of letters. One is along the lines of  “we know that you have been renting out your property but you seem to have forgotten to tell us. Please send us €X to cover taxes, fines and interest”. The other is along the lines of “You are not allowed to rent out the property but we are aware that you have so please stop renting and send us €X for fines”. In the case of the latter these sums can approach €20,000.

So what can you do? Well first of all, if you are renting out a property make sure that you are allowed to. If you are allowed to rent out the property then make sure that you pay your taxes both in the country in which the property is located and also in the country where you are tax resident. You should also take some advice to legally reduce down the taxes that you should pay.

Peter can be contacted at Chebsey & Co, 51LondonEnd,Beaconsfield, HP9 2HW or www.chebsey.com or via telephone at 01494 670440 or via fax at 01494 670276 or by email at  pje@chebsey.com

Porta Mondial, who publish their properties on Kyero from the Balearic Islands, the Canaries and the Spanish mainland, in Cataluna, have recently opened their new international Head Office in Mallorca.

With Mallorca as the European hub, the franchise group plans to cover the entire Mediterranean area, as well as selected holiday regions outside Europe.

Founder and CEO Joachim Semrau said the company has close ties with Mallorca and the new office, centrally located on Calle Colom close to the Plaza Mayor, offers ideal conditions for opening up new markets.

The official inauguration of the International Head Office took place last week, under the inauguration motto “Hitos históricos – Milestones – Meilensteine”

The new and prestigious location in the old town area of Palma is a showcase for Porta Mondial estate agencies, which was specially designed for the group by renowned brand architects.

Of course what has happened over the last couple of years is that house prices in Spain dropped and people weren’t able to rent out the properties as much as they expected. The lack of rental was sometimes down to buying the wrong property in the wrong location, sometimes down unrealistic expectations as to rental and sometimes down to agents over selling rental possibilities. Whatever the reasons for this, the end result is that many people have had a shortfall in their mortgages each month and have had to make up for that shortfall from other funds.

Making up the mortgage is fine providing that you are prepared for it. If you are not then it comes as a shock – particularly if it comes at a time when job security and salaries aren’t what they used to be. If you combine this with property prices in Spain dropping it is no wonder that people are having problems – they often have a property that is worth less than they paid for it, less than the amount of the mortgage and are not able to bring in the rental income to pay for the mortgage. I regularly have discussions with people about whether the bank in Spain can come after you in the UK for any debts in Spain. The answer is yes, they can. As a lawyer I regularly help people enforce debts across different jurisdictions.

A recent case in Navarra brings some potential hope to people in this situation. In this particular case a property was sold to satisfy the amount due on the mortgage. The amount recovered at auction was less than the amount outstanding on the mortgage. Now normally you would expect the bank to be able to come after their client for the balance due on the mortgage. However, the judge in this particular case saw things very differently. What he said was that as the bank had valued the property when they gave the mortgage they obviously thought that the amount of the mortgage was covered by the value of the property. He then went on to say that therefore the bank could not recover any shortfall between the sale of the property and the mortgage outstanding and that them taking the property back was enough to satisfy the amount outstanding on the mortgage.

This all seems rather strange to me. Properties can go down in value as well as up and the mortgage was a loan for a certain amount. Reading between the lines of the judgement it appears that judge was trying to make a statement regarding mortgages. It seems like he was blaming banks for over valuing properties and for irresponsible lending. He therefore thought that they should shoulder the responsibility for this.

Naturally this case is causing the banks to pay attention. How they will react is yet to be seen. It could be that they stop their practice of overvaluing properties (how many times have we seen the offer of 100% mortgage in Spain which is actually an 80% mortgage on an overvaluation of a property?). It may be that the minimum amounts that they will accept at auction increase. Time will tell. However, in the meantime this case does give a glimmer of hope to those people with negative equity and who cannot pay their mortgages.

Courtesy of Peter Esders, a solicitor at Chebsey & Co. He can be contacted at 51 London End, Beaconsfield, Buckinghamshire HP9 2HW Tel: 01494 670440 or Email: pje@chebsey.com

]]> http://articles.kyero.com/outstanding-spanish-mortgages-and-auctions/2914/feed 1 http://articles.kyero.com/a-fresh-look-at-marbellas-old-town/2953 http://articles.kyero.com/a-fresh-look-at-marbellas-old-town/2953#comments Mon, 21 Mar 2011 16:42:41 +0000 syndite http://articles.kyero.com/?p=2953 Now, a lot of people will prefer modern shopping malls and we have our share of those along the coast, but for me it is hard to beat the atmosphere of an old town centre like that of Marbella.

The problem is that while shopping centres feature some great shops and international brands they are pretty much the same wherever you go. From my perspective you must have a pretty narrow outlook not to get bored by the same chain store names on every high street and mall from ‘Lake Geneva to the Finland station,’ but maybe I’m just being cynical.

Give me the sights, scents and impressions that are unique to a certain location and that are deeply rooted in its history and cultural heritage. Marbella’s old town is a fine example. Situated just off the main shopping boulevard, Avenida Ricardo Soriano, and less than a kilometre from the beach, its maze of cobbled pedestrian streets are a welcome change from tall buildings, loud signage and noisy traffic.

What’s more, this is the old heart of Marbella, so its whitewashed houses arranged around narrow alleyways and lovely squares are a historical delight that still buzzes with the everyday life of a vibrant community. I wouldn’t go so far as to say that washing hangs over your head in the classic Mediterranean tradition – Marbella’s a bit too refined for that – but the old town’s charm lies in the way it is quaint, clean and very well preserved.

While people still live here it is also the setting for some of the nicest antique shops, boutiques, shoe shops, cafés, tapas bars, restaurants and specialist outlets in Marbella. Good bargains can be had and one of the main attractions is the lively yet traffic-free ambience and feeling that you’re in the real Spain. As a result, this is also one of the very best places to head for lunch or to go out at night, with excellent tapas bars, restaurants (avoid the more touristy ones) and some really great nightspots.

Where Puerto Banús is about flashing your Rolex and/or Roller, old town Marbella is about having fun in a more relaxed and understated way. The locals love it here, as do those foreigners in the know – and keep an eye out for the special events and activities organised on a regular basis.

So for something a little more authentic give the shopping mall a miss and make the most of a sunny day.

With thanks to Michel Cruz of www.manifestodesign.com

]]> http://articles.kyero.com/a-fresh-look-at-marbellas-old-town/2953/feed 0 http://articles.kyero.com/all-about-denia/2938 http://articles.kyero.com/all-about-denia/2938#comments Mon, 21 Mar 2011 16:27:25 +0000 syndite http://articles.kyero.com/?p=2938 Located in the north of the province of Alicante and near the border with the province of Valencia, Denia is the capital of the Marina Alta district.

Its geographical location near the cape: Cabo de San Antonio and in front of the Balearic Islands has transformed Denia into a privileged city where the sea plays an essential role.

Denia is known as the city of good weather. With its hot summers and mild winters, people enjoy the outdoors in Denia all year round. It’s average annual temperature is almost always around 20º C.

What are you looking for on your next trip? Great beaches? Beautiful mountains? Good weather? Excellent food? Vibrant night life? At Denia you will find these and more all year around.

It’s beaches are located north and south of the city, and within walking distance from the city itself. To the north of the municipality you will find the following beaches: La Punta del Raset, Les Marines, Les Bovetes, Els Molins, L’Almadrava and Les Deveses.

To the south of the town the coastline starts with a long sandy beach, called La Marineta Casiana, and gives way to rocky coves known as Las Rotas area.

Accommodation is found in property all around Denia, in the Historical city centre, at Las Marinas, at Las Rotas, at the mountainside of Mount. Montgó (a beautiful and peaceful place with scenic views of the sea and Denia.) There you can explore the minor local entity of Xara, the district of Jesús Pobre and, in Mt.Montgó, la Pedrera neighbourhood

What about the cuisine? Here you’ll find a clear example of the variety and refinement of the Mediterranean diet – the best the sea can offer and the wines of the Valencian orchards.

There is the famous Denia red prawn, the rice dish known as arroz a banda, specialities such as the espencat (grilled vegetables), the suquet de peix (fish, sea urchins, dry octopus, amongst others). You will be able to enjoy all these delicious dishes and more in more than 300 restaurants in the city.

Another fabulous option is to visit the Municipal Market at Magallanes Street where you will find fresh and first-rate products and the Fish Market at the Port.

If you like walking, there are several walking routes, which will give you the chance to discover the city and to know every monument, every quarter and every interesting corner.

Furthermore, there are interesting walking routes along it’s coves, walking excursions to Mount Montgó Natural Park, a car drive to the Cape of Sant Antoni or excursions which you can carry out in a sailing boat.

With thanks to Velas y Viento – a group of professionals who are dedicated exclusively to the world of nautical sports. They offer sailing courses from Denia and around the Mediterranean sea (day, weekend and weeks routes). If you want to learn how to sail, meet new people, have new and incredible experiences, contact them for more information.

]]> http://articles.kyero.com/all-about-denia/2938/feed 0 http://articles.kyero.com/the-spirit-of-santa-pola/2940 http://articles.kyero.com/the-spirit-of-santa-pola/2940#comments Tue, 15 Feb 2011 15:17:36 +0000 syndite http://articles.kyero.com/?p=2940 When travelling south on the N332 from the airport at El Altet, most people bypass Santa Pola completely as they swing past the bay where this important fishing port is situated, but those who have left the main road and made their way down through the old town to the sea will find it a delightful spot well worth going out of their way to explore.

Between Alicante and Guardamar, with natural beaches, salt flats and scrub pine countryside stretching for miles on either side along the coast, Santa Pola has much more to offer than many seaside towns.

For sun-lovers, the soft, flat sands seem to go on as far as the eye can see, with ample cafés and restaurants wherever you want to stop for refreshments, and walkers can follow the edge of the crystal waters all the way into Alicante without restriction, under the magnificent cliffs of Gran Alacant, perhaps visiting the tiny little church (La Hermita) which pops up intriguingly out of the sand as if planted way back in the past in hopes that it might grow….

The fishing boats in the harbour bring in the fresh catch for immediate sale, and just along the seafront the glass-hulled boats bob peacefully as they take on visitors for the cruise to the beautiful island of Tabarca, which rises romantically out of the horizon a few miles off the coast.

At the other end of the town stand the magnificent mountains of salt collected from the nearby lakes, where hundreds of pink flamingos stand in shallow water in the shadow of an old watchtower, once a ruin but now restored to perfection.

An ancient castle dominates the old town itself, built in the sixteenth century to protect the town from pirate attacks. Its simple clock tower echoes the peal of the bells as it chimes the hours and its sections, and if time and mood allows, a coffee in the square is the perfect way to contemplate the warmth of the mellow stone which makes up the massive walls. Public events are held within the castle courtyard, and there is a chapel, fishing and archaeological museums to be enjoyed as well, with opening hours clearly marked to avoid disappointment.

The Kings’ Parade, Moors and Christians and Papa Noel all end their journeys in this square where the kids can enjoy themselves safely long into the night while parents enjoy a glass of wine and a chat with friends – and the odd passing stranger – in a relaxed yet upbeat atmosphere. Further up into the oldest part of the town is another square – Plaza del Calvario – which gives breathtaking views over the bay.

Fun, independent shops line the streets around the castle with larger supermarkets towards the outskirts of the town, so all tastes are catered for within walking distance, and there is a wealth of places to eat out whatever your fancy, from pizza to a fresh prawn platter, a lunchtime menú or a dazzling evening dinner with views over the sparkling sea.

There is a thriving sailing community, with a magnificent marina and a new Club Nautico for everyone to enjoy, and any number of regular local and international sporting events including windsurfing, paragliding, kiting, hot air ballooning, football, swimming and many others, not forgetting the world-famous half-marathon held every winter and attended by thousands.

The Parque Palmeral is a fascinating open-air theatre which attracts world-class entertainment; even the young Bolshoi company have performed there in recent years. There is also a radio-control boating club, a group of dedicated slope-soarer gliders and believe it or not an exhibition of dollhouses and miniatures right in the centre of the town!

Santa Pola is a gem in a world of urbanisation; it has managed to retain the essence of its Spanish roots and is still home to one of the most important of Spain’s Mediterranean fishing fleets, yet its people are warm and generous of spirit, welcoming people of all nations with open hearts and minds.

The streets are clean and safe, the schools modern and well-attended and the medical facilities second to none, because Santa Pola is still a growing town with a big heart, and the traveller looking for a town that has everything but snow need look no further!

With thanks to Janette of Mayor Hobbies – A hobby shop for radio control models and Dollshouses in Santa Pola

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