Gecko Towers
Update 09.04.24: An announcement has been made by the leader of the Socialist Government in Spain, that his government plans to amend or repeal the “Golden Visa” legislation. Currently no timetable for these changes has been suggested and there is opposition to any revision. That said, this discourse, that started in May 2023, may result in some material changes. We will endeavour to keep you up to date with these as we are made aware of them and their precise impact.
Buying a property in Marbella is, for most, the culmination of a long term ambition. Such an ambition, over the last couple of years, has become more of a priority as we emerge from the gloom of Covid. The draw of a warmer climate, the ability to telework with excellent fibre-optic communications and an increasing expectation as to the quality of life to be lead, has cemented this ambition for many clients from around the world.
Vast amounts of research and planning go into identifying where you want to be located, what sized or configuration of property suits your needs. However, often, sadly, precious little time is spent making the key decision of selecting the independent Spanish Abogado (lawyer) who will represent and guide you through your purchasing process.
The mantra of most information services about the process of purchasing a property in Spain is clear, make sure that you retain a client centric and truly independent Abogado (Spanish Lawyer) from the start of your purchase process.
What lawyer is client centric and “truly independent” of the buying process? The concept of conflicts of interest is reasonably clear but it embraces the idea that your Abogado should be free to represent you without holding any allegiance to any other that would conflict – or potentially conflict – with them providing you with best practice advice.
A practical caveat to the above, is that you need to be able to trust your Abogado and have confidence in his/her representation of you. In addition, it really is very useful if you like your lawyer and feel comfortable asking questions and receiving experience-qualified, truthful advice.
Having selected your Abogado – and I would, again, recommend that you do that early in your property search – the following is a practical checklist of next steps in your property buying process in the Marbella region:
Practical Checklist:
The 1. Reservation Contract. Following your careful selection of the property that you’d like to buy – after no doubt some wrangling over price and other terms such as finishes, tiling and the like – it is entirely usual that your Estate Agent, who has shown you the property or the agent for the promoter, will ask you to sign a Reservation Contract.
Having engaged your Abogado, you will be able to run this past him/her before signing. There are good reasons for this. This document usually requires the payment of a reservation deposit – often circa €6000 – which will be deducted from the agreed purchase price in due course. The nature of this is that it is intended to remove your selected property from the market – reserving it for you.
The other element is that this payment is often forfeited and non-returnable should you not be able to complete the purchase for some reason.
At this stage its also vital that you ask your Abogado for advice concerning the getting of your NIE (Numero de Indentificacion Extranjero). Please understand that each party comprising “the Buyer” will need an NIE, which is obtained from the local Police Station, and, vitally, the sale cannot be completed without it – see 8. below.
At this stage you may, particularly if you are buying your property purchase totally from your own resources, consider engaging the services of a Surveyor (there are some RICS-qualified based locally) or Arquitecto Tecnico to advise on the state of the property. If you are purchasing with a mortgage a valuation will be sought by your mortgage lender (usually a Spanish bank) but it still may be prudent to seek a qualified professional view on its condition.
At this stage your Abogado should consider with you whether this purchase will be a personal purchase. Alternatively, when the property’s value justifies it, your personal circumstances warrant it or resulting from your proposed use of the property – especially if your plan is to undertake substantial rental activity – it may be advisable to make the purchase using a Spanish company.
2. Residency. If you hail from the UK it is important to check your residency status and investigate whether you could benefit from either a Non-Lucrative Visa, a so-called “Golden Visa” or the new “Digital Nomad” Visa. These could make all the difference to you in the post-Brexit landscape. EU passport holders – including those who have latterly acquired a second EU passport – will not be confronted with those challenges. Would an EU Passport assist your Marbella property journey?
3. Translation of Documents. Ask for a translation into your mother tongue – which may be verbal – of any documents you are asked to sign and a full explanation of terms. For a written translation there will a cost for this service but you may prefer to incur this. If you are taking a mortgage from a Spanish bank lender it is entirely usual that their documents are already in English or English and Spanish in what is called “a sword translation”.
4. Negotiation of Written Agreements. Ask whether any of the terms of the Reservation Contract or Private Purchase Contract (“PPC”) can be negotiated? You may seek to make the Reservation Contract, given your particular circumstances, expressed as being refundable in the event of, for example, an adverse property survey and/or unsatisfactory mortgage evaluation, if these are relevant.
The PPC is often more complicated and will require more detailed examination, explanation and comment by your Abogado. The PPC usually sets the timescale for the purchase to progress. Signature of the PPC by both parties can be regarded as “Exchange” in the English model and sets a date for the “Completion” of the purchase when the title deeds are signed before a Notary and any Mortgage Deeds, if relevant are also completed.
If you are seeking a mortgage to fund your purchase there is an earlier Notary’s appointment for the signing of a document that reflects that you have understood the conditions of the mortgage. There is then a “cooling off period” prior to completion and the drawing down of the mortgage.
5. “Off plan” Deals. If you are an off-plan purchaser aside from ensuring that the correct planning steps have been taken by the PPC you will be expected to make payments over a given schedule of weeks and months upon the happening of certain events. These payments should be backed by all important Bank Guarantee – which require detailed consideration and comment from your Abogado – but they are intended to ensure that all of the sums you place towards the total purchase price of an off-plan, or not yet built, property, are protected from any failure by the promoter to deliver the finished apartment, town-house or villa.
In addition, are all the particular “deals” offered by the Sales Agent specified in detail in PPC? These may include additional equipment over and above the usual Specification, particular wall or floor finishes, a furniture pack, sports club membership or the terms of any rental guarantee.
6. Deposits Paid. Ask for clear proof that any deposit that you have made is logged and signed for by either the seller or their Abogado on their behalf.
7. Photocopies. Take photocopies of all important documents and keep them handy at home – your Abogado should keep the originals on your file.
8. Power of Attorney. If there is a chance that you will be unable to make appointments in Spain, which may be at short notice but require your attendance it may be sensible to ask your trusted Abogado if they would be happy to be granted a Power of Attorney to most effectively represent you in your purchase process. This will be drawn specifically for your needs in relation to your purchase. For opening of bank accounts and for the initial application for the all important Numero Identidad de Extranjero (NIE), these may require your attendance in person but next steps can often be processed by your Abogado under the Power of Attorney – provided that it’s correctly executed and Appostiled in your home country.
9. Taxes – Your Abogado will prepare for you a break-down of what Taxes need to be paid and when. As a rule of thumb the costs of purchase tend to be around ten percent of the purchase price perhaps a little higher if a mortgage is used.
10. Bank Transfers At some point in your purchase journey you will need to send funds for various deposits, taxes or completion funds to your Spanish bank. While Spanish banks are generally quite efficient they will rarely inform you of the sums they take by way of receiving commissions when deducting them. As a result when sending money to your bank for a specific payment you may think you have transferred sufficient to cover the outgoing. It makes sense to check that the sum has been received the bank – and many now have good online account facilities – and to send extra to cover the commissions to avoid being short of funds when you need them.
If you come from a jurisdiction that is not part of the Euro you will need to give some thought to the bulk transfer of funds and the costs of currency conversion from your home currency to the Euros required for your Spanish purchase. Most bank based exchange rates are very unfavorable. As a result, there are businesses that offer attractive rates of exchange for the processing of funds for international property purchases. You can “buy forward” to mitigate exchange rate fluctuations and if you have a pension or other regular payment that goes towards a Spanish mortgage, for example, you can set up a regular transfer plan to deal with the economically.
You need to make sure that the foreign exchange business you are using to transfer your funds is formally regulated in their operating jurisdictions. You will need to ensure that they are an entirely reputable large players who can provide you with all necessary comfort that your funds pre and post conversion are held in an account in your name. We have access to such established forex dealers, as required who can fully explain the required steps. They can make the process of transferring large or small sums highly favorable and cost effective.
11. At The Notary – a piece dealing with this key step in the Completion of a Property will follow shortly.
12. Wills – Having purchased a property you will now be the owner of a Spanish asset. There is an amazing well ordered system for wills in Spain that includes a Wills Registry in Madrid. It is very sensible to complete a Spanish will dealing with your Spanish assets.
There will be other steps that need to be undertaken – including furnishings, utilities and identifying preferred local suppliers – but the above is intended as a route-map at the start of your journey of making your purchase of a property in the Marbella region. Our aim is to help you at all stages and to make the property buying process as stress-free as possible.
Should you be interested in discussing the legal process involved in buying a property in the Marbella region, we would be delighted to assist you. Our multi-disciplinary team of bi-lingual, highly experienced and wholly independent Abogados (Spanish Lawyers) and Asesores Fiscales (Tax Accountants) are ready to help you.
We are not estate agents, but we know some hard-working and reputable ones, if needed.
Please call me, Mark FR Wilkins, during usual business hours on +34 600 343 917 or, if you prefer, or e-mail me at mark@roslegal.es
You may also be interested to subscribe to my interactive FaceBook Group “Costa del Sol – The Best Place to Live in Europe” – please click this link – https://m.facebook.com/groups/3658510954433358/?ref=share
Please note that our posts are for general interest. There is no substitute for proper legal advice tailored to your specific circumstances as provided by a qualified Abogado who is experienced in the application of the Spanish Law.
Nothing contained in this article should be seen or taken as the writer or the publisher providing legal, tax or financial advice.
All details have been reasonably fact-checked and all efforts have been taken to ensure that facts are accurate as at the date of publication.
© Mark FR Wilkins 2023. All rights reserved.