A Guide to Buying property in Sitges
Here is a guide for you to follow if you are considering buying a property in Sitges and need some advice on it.
When purchasing a property you will need to consider :-
- The buying price
- Notary fees are usually 500€ - 1000€
- Tax payment: 10%of the property price, to be paid within three weeks of paying for the property at the notary.
- Registration taxes : 1500€ - 2000€
If your purchasing a property for 200,000€ and you are above the age of 32. The property or apartment itself costs 200,000€, however you will have to budget for the tax which is 10% so adding a further 20,000€. then add the costs for the notary and registration taxes, so the final price will be around 223,000€.
Also if you need to take advice from a lawyer during the buying process, the fee they will charge is roughly 1% of the purchase price.
Before buying an apartment or property you need to know if and how you can finance it.
The easiest way is cash, buy but not everyone has that disposable income, if you are in that position it is possible to pay via bank transfer or banker draft/check.
Getting a mortgage in Spain:
If you are not a Spanish citizen, there can be difficulties getting a mortgage for more than 50% of the buying price. The bank will need to evaluate the apartment or property (this can take up to 2 weeks) and the evaluation will often be lower than the market value. The evaluation of the property can be used to set the price, but this is not normally the case.
However, the price evaluated by the bank will be the amount you get 50% financed on.
Getting a NIE
What is a NIE?
The NIE or numero de identificacion de extranjeros, is very similar to a national insurance number, it allows you open up bank accounts, be eligible for employment, health benefits and also buy or sell a property here in Spain.
We at Sitges quality properties can advise you the best way for you obtain a NIE if you need to do so.
If you are already in Sitges you can go to the policia national station Vilanova and stand in line, this can take up to 3-4 hours depending on the que. If you get there early (around 8am) you will certainly que less.
There are 3 steps in the application process for the NIE.
- Fill a NIE application form that can be found HERE
- For non EU citizens, a proof of legal entry into Spain and two passports photo will be needed;
- If all of your forms are correctly filled out and you have the correct documentation, you will be given a payslip, which must be taken to a bank to pay for the associated taxes (this is around 10€). If you are doing this at Vilanova you can the Banco Sabadell which is 10M away. Once paid they will stamp you form and you return it to the office, where you will be able to finalise your paper work. You will then be issued with your NIE, which you pick normaly pick up the following day.
Opening a Spanish Bank Account
To open a Spanish bank account you will need to provide the bank with 2 documents, one is a NIE and the other is a valid passport
You can choose from a wide range of banks within the area, do little research into this, the main ones are Banco Sabadell, La Caixa, Santander.
Finding a suitable property within your budget
That is where we can help you!!!!
Signing the reservation Contract
This is the very first step of the contract process so be aware you will know be entering into a contractual agreement. It is an agreement between both parties the vendor and the purchaser, where both concerned agree to commit and allocate their time and resources to the sale of the property. The purchaser will pay a deposit and the vendor will withdraw his property from all advertising outlets, such as estate agents, websites and advertising avenues. This means the vendor has confirmed his intent to sell and the buyer has committed to his purchase.
Before completion of the reservation contract it is important to make sure you have all funding in place in order to complete. We must emphasize that as a buyer it is hugely important to ensure you are capable (financially) of completing the sale, it for any reason you fail to complete, the seller will have every right not to return your deposit, which is non-refundable.
If the buyer is not familiar with the Spanish legal system and is unsure of how to conduct the necessary background checks, we highly recommend that they hire a lawyer specialised in this area BEFORE any documents are signed.
When you have done the reservation of the property, then your NIE and a Spanish bank account are needed. The reservation fee is normally around 3000€ + IVA
Signing of Arras Contract
Once the reservation contract has been signed by both parties the next stage of the process can commence which is the signing of the Arras Contract. This contract is to determine a final sale price and a set date in which the final payment and transfer must be completed by. The Arras contract determines and is an agreement between the involved parties.
When this contract has been signed, the buyer must pay a deposit which normally covers 10 percent of the sales price. Oncethe Arras contract has been signed, both the the buyer and the vendor are legally bound to the sale of the property, there will be penalties if either of the parties deviates from the terms and conditions of the contract.
The Arras contract should include article1.454 of the Spanish civilcode, which states that in the event of the buyer backing out of the deal, the full amount of the deposit will be lost, but on the other hand if the vendor reneges, he must pay the buyer 2 times the amount of the deposit that was put down when the Arras contract was signed.
Hiring a Notory
It is a must to have a notary for the purchase of a property. In to complete the transaction and receive the official paperwork and documentation stating that you are the owner of the property, you will need a notary to do this for you.
The basic notary package will cost you around 400-500€ they will only assist the Escitura (Final Deed).
A more comprehensive notary package which will help you with paying the registration taxes, simplifying the process and getting integrated and also the Escritura can you cost around 800-950€.
Signing the Escritura contract- Final Deed
The siging of the Escritura is the final contracr of the buying process. When the Escriturahas been signed, the title deed will officially be transferred to the buyer and the seller will receive the full payment for the property. Normally, the seller will receive his payment through bank transfer or by bankers draft.
This final transaction must besupervised by a notary, who will ensure that the agreement will be executed properly and within the Spanish legal framework.
What needs to be checked before this transaction is that the owner has:
- The title deed of the property
- Proof of IBI payments in the past
- Proof that community fees (gastos de comunidad) have been also paid to date
- A document which provides an overview of the utility costs
- Proof that the property is debt free
- Your lawyer
- Cedula de habitabilidad ( Permission of residential use)
- Energy Performance Certificate.
When signing the Esrictua, you are stating that you are fully aware of the conditions of the property. We advise to you study the contract with your lawyer before completing this sale. There are some sections of the contract which are complex and hard to understand especially if you are not familiar with Spanish law. It is your responsibility to make sure you have understood everything in the Escrutira so make sure you have taken legal advice on it before signing and investing your property.
Once this document has been signed and the payments made the keys will be handed to the new owner and the buying process is then complete. From this point the buyer must then pay a series of mandatory taxes. All this is explained in the section costs and Taxes.
The Golden Visa
As from the 18th September 2013, the Spanish government modified the Spanish immigration law allowing what is called the “The Golden Visa” by granting the resident visas to non-EU National who invest in Spain.
From the 18th September 2013 Spanish Government updated Spanish immigration law by permitting what is known as the " The Golden Visa” which approves resident visas status to non EU Nationals who invest in Spain.
- For qualification for this visa the investor must meet one of the following requirements:
- To qualify for a visa the investor is required to meet one of these prerequisites:
- Share acquisition in Spanish companies with a value greater than 1,000,000€
- Spanish government bonds when purchased to the value greater than 2,000,000€
- Creation of a business project(s) of common interest.
- Property(s) acquisition which exceeds 500,000€ in value.
The visa is initially granted for 2 years and then are renewable after the 2 years if the criteria are still been met.
The initial period that the visa is granted is 2 years, thereafter, one of the above conditions is still met
Purchasing real estate in Spain to obtain a residency visa
If you are a Non EU national you are able to apply for a residency permit if you have purchased property(s) in Spain with a total value exceeding 500,000€.
Before submitting your visa you need to prove ownership of all or any real estate. certificates of proficiency from the Land Registry are sufficient evidence but must be dated within 90 days of the application.
The Applicants must also:
- Not be illegally living in Spain.
- Be over 18 years old.
- Must not have a Spanish criminal record or a criminal record in any countries where they have resided during the last 5 years.
- Not be eligible of refusal of entry by any country which Spain has a treaty of entry.
- Possess private healthcare insurance contracted with an insurer authorised to operate in Spain.
- Demonstrate that they have the financial means to support themselves and their family whilst living in Spain.
- Pay the necessary taxes to obtain the Visa.
If you require any assistance at all on any of these matters please do not hesistate to contact us at Sitges Quality Properties.