Real Estate Information | Let us create a 3d Digital eBook for you! DigyCat.com |
|
How To Buy Property in Spain Safely
Buying property abroad is not an undertaking one should embark upon lightly! It is not wise to assume that the entire purchase process will follow the rules we're used to 'back home' and generally speaking there are usually a whole new set of rules and regulations, traditions and traps to learn, understand and watch out for. Spain is absolutely no exception and has a tangled web of laws and legislation seemingly designed to trip up an unwary real estate buyer. This article examines three key areas that a potential property purchaser should be at least aware of before signing on the dotted line for that dream Spanish home. Firstly there's a 'tradition' in Spain for purchasers to actively but illegally assist the vendor in reducing his overall capital gains (or profit) tax liability. Often the vendor will ask for a far reduced purchase price to be written into the purchase contract and for the buyer to actually make up the difference between the contract price and the actual price in cash. This has been a tradition in Spain for many years; in theory it doesn't affect the buyer, it certainly doesn't affect the vendor and what the tax authorities don't know can't hurt them, right? Wrong! This action is highly illegal and Spain's new socialist government have begun cracking down on money laundering and tax evasion and these concerted efforts are targeting the property market in Spain. Of course many potential buyers reading this will simply assume that if asked to act illegally all they need do is point out that the new crackdown could result in investigation, fines, even a lengthy prison term and the vendor, estate agent and solicitor involved in the transaction will step back and accept that exact figures are entered into the contract and taxation be paid accordingly. Unfortunately the reality for those who refuse to act in accordance with the vendor's wishes can be far different to the above proposed ideal scenario. Quite often the vendor backs out of a sale if he cannot get his way and the buyer loses their dream property in Spain and possibly their deposit as well. So, what should someone hoping to buy property in Spain do if faced with such a situation? Should they accept the vendor's demands and hand over a brown paper bag stuffed with 500 Euro notes? If they do then the price they apparently purchase the property for will be the price against which any future profits from the resale of the property will be compared for their capital gains tax purposes. Therefore if the purchaser ever wants to resell the property they too will need to insist that their buyer also agrees to having a reduced sum entered into the contract otherwise they'll be liable for all the extra capital gains taxation! Someone somewhere along the line is going to lose out just ensure that it's not you! Even if you have your heart set on a particular home in Spain I would strongly recommend that you do not go ahead and act illegally even if that means you risk losing the property. Think very long and very hard about what you're being asked to do and the potential legal and long term financial consequences rather than your short term thrill at securing that dream home in Spain. The next point that is worthy of due attention is the fact that there are many unregistered and inexperienced estate agents operating in Spain. The fact that anyone can become an estate agent on the Costa del Sol for example has led not only to mistakes in the purchase process being made, but unscrupulous individuals setting out to exploit foreign buyers. When looking for an estate agent to represent your interests find one with a strong and positive reputation?a reputation they will do everything to protect and therefore one who is unlikely to want to offer you anything less than a first class service. Furthermore, find an agent who speaks English and Spanish! It is imperative that your agent understands every minute point about the property, contract, terms and conditions and correctly relates this information to you. Many estate agencies recommend lawyers to their clients when it comes to contract negotiations, searches etc. Bear in mind that a solicitor referred to you by your agent may be more inclined to act in the agent's best wishes rather than your own. Why? Because the agent likely refers an awful lot of business to him therefore he will do his best to maintain that relationship first! This is of course not always the case, but you might be better advised to find an independent lawyer through the recommendation of friends and trusted third parties who have already had significant or at least similar dealings with said lawyer. Finally, changes in land laws in Spain have been introduced in Valencia and most recently Andalusia and these changes are 'a good thing' in theory, but the stuff of nightmares for many foreign buyers in the parts of Spain affected by the legislation. In theory the laws have been introduced to protect rural land, agricultural land, to prevent over development and also to stop private owners from restricting development. But the laws have been badly implemented, they have been exploited and there are many cases of foreign residents convinced that they have been targeted unfairly because of their nationality. The intricacies of the law seem open for interpretation and in Valencia so many private buyers have suffered at the hands of developers exploiting the law that the European Union recently ruled the law unreasonable. As a result a new version of it has been drafted and is awaiting the Valencian parliament's passing of it. In Andalusia many foreign owners of rural land on which they were hoping to build a home have lost out to the new laws which restrict the development of such land. It is absolutely a case of buyer beware, and even more importantly it is a case of the buyer doing their complete homework before making any solid plans for that dream home. If you're interested in purchasing a ruin or run down building for redevelopment or you're interested in building from scratch on an empty plot make sure in advance that permission will be granted and that your piece of land in Spain can and will sustain the ambitions you have for it. If you keep a cool head when buying property in sunny Spain and you employ the same levels of caution and care that you would if buying a house in your home country you will most likely avoid the common traps and pitfalls that some people fall foul of. Just remember to think of the longer term consequences before you act and consider employing the services of qualified and reputable professionals to assist you with the legal and financial side of your transaction and your overseas buying experience will be one you savour! Rhiannon Williamson is the publisher of http://www.shelteroffshore.com - the online resource for investment property abroad, offshore investing and living overseas articles, guides and resources. Click the following link for Spanish property and moving to Spain articles, guides, resources and recommended reading.
MORE RESOURCES: |
RELATED ARTICLES
A Crash Course On The Payout Options Available To You When Selling A Mortgage Note Okay, let's take a look at the typical payout options:Full Purchase - The investor buys the entire note. This alleviates the seller of the responsibility to collect payments in the future. Seven Questions You Should Ask When Buying a Condo Hotel Unit You may have heard all the buzz about the newest type of vacation home investment, condo hotels. These are condominiums located in four- and five-star hotels in cities like Miami, Orlando, Las Vegas and Chicago. How Come No One Told Us About This When We Were Buying a Home? Development, it's bound to happen.Simply because there is a large open field, or the property you're looking at borders woods, doesn't mean it will or can stay that way in the future. 5 Simple Steps to Sell Your House Fast! The decision to sell your house wasn't made on the spur of the moment. It may have been spurred by the desire to live in a nicer home, the need to move for a new job or the necessity to get a handle on out-of-control costs. Stopping Home Foreclosure with Bankruptcy Bankruptcy Will Stop Your Sale - At Least For NowFor $395, you can stop your sale- at least that is what the ads say. You are about to find out how bankruptcy can be good or very damaging. Should You Buy Real Estate Now I have been seeing the market on fire for a long time and have started telling my friends, "don't buy now". No one can accurately determine exactly when it will happen, but it is definately on the way. Moldy Homes are a Great Investment Have you seen this in your classifieds? -"Will pay $$$ for moldy homes. Call 555-555-5555"All you have to do is watch the news and you know about mold problems. Dead Deals and Recycled Reports Everyone knows that at the end of a home inspection, a report is generated that outlines the findings of the home inspector. But did you know that this is not intended to be a "hit list" of negatives? Us home inspectors do what we do in order to objectively describe the home. Buying Real Estate Thats Not For Sale Buying real estate can start with a look in the newspaper, a visit to a broker, or a search online. These are all good ways to find your next investment property. Law & Logic of Homeowner Association Capital Reserves In October 1999, Oregon was one of the first states that enacted a significant improvement to its Condominium and Planned Community regarding capital reserve planning, a process by which homeowner associations plan and fund future repairs and replacements. For many associations, the process became mandatory although there was an "escape clause" for pre-October 99 Oregon communities. Take A Shotgun Approach An effective real estate advertising strategy entails a 'shotgun' approach. A shotgun approach includes online internet ads, regular print ads in major real estate publications (AJC) of the property's location, as well as popular local area publications (Creative Loafing) and full use of real estate signs. Real Estate Investing with No Cash and No Credit Lots of folks think it can't be done.How in the world can you buy a piece of real estate property without cash or credit? How is it possible to buy a $50,000 house or a $1 million dollar house if I don't have an abundance of cash or an excellent credit rating?Nothing stops a would-be investor cold in his tracks like "no cash or credit. What Are the Pitfalls of Marketing a Property Before Its Ready? Selling quickly is a high priority for some home sellers. A job transfer can prompt the need to relocate on short notice. Dont Get Stuck Having To Deal With The Sellers Household Hazardous Wastes - After You Move In! I have a confession to make!I was just outside with Frankie (my dog) and noticed I stillhad an old car battery sitting by the foundation, at therear of my house.Yes, I'll admit it's not right, and quite environmentallyinsensitive for me to have it there. Selling Your Home: The Power of a Great Sales Flyer Even though its importance is often overlooked, a great sales flyer is one of the most effective tools for selling your house. Whether your home is listed with an agent or not, make sure that you have a dazzling flyer. Real Estate Investing - Makeovers vs. Flipping Please don't call it "flipping."Some real estate investors who practice the technique of buying property for immediate fixup and resale call it "flipping houses. Make Money With Room Rentals I don't know why I didn't do it sooner, but one day many years ago, I decided to try renting rooms in my home. I was young and single, and had a nice mobile home on small piece of property. Cape Coral Realtor As the second largest city geographically in Florida, this beautiful southwestern attraction is located on the banks of the Caloosahatchee River. It also lies between the Gulf of Mexico and part of the Intracoastal Waterway. Selling Your Home Yourself - Pricing It Appropriately When you're selling your own property, whether it's a house, townhouse, condo, apartment, a finished lot, raw land, a farm, a ranch, or whatever, the first thing to get right is the price you ask for it. If you work with a broker, the legwork is done for you. Old House? New House? Weighing Your Options Maybe it has something to do with a childhood home we fondly remember. Many of us long for old homes built with solid construction, quality craftsmanship and beautiful details. |
List4Sale Domain Is For Sale - $10,000 For Enquiries eMail Us © www.List4Sale.biz 2012 |