Gecko Towers
“Money makes the World go around…..“. Well no it doesn’t, of course. If you are making the acquisition of a property in the Marbella region it is something that you are going to need to take care of! Not only having it available, but having it easily to hand at the right point in your purchasing transaction.
Your Abogado (Spanish lawyer) should provide you with a detailed schedule of how much money you’ll need available and when. If you are making the purchase of an “off plan” property, for example, you will be guided by the Private Purchase Contract (PPC) that you have signed to give a deposit at the outset and then various stage payments over a number of months. Being ready to make these payments with the readily available Euros is hugely important to your proper performance under the PPC.
If you hail from outside the Eurozone – and only 20 counties of the EU actually use the Euro – then you will need to convert your £/$/Krona to Euros (€). To do this most people use a regulated (in UK – Financial Conduct Authority or in Spain – Banco de Espana), bonded and trusted Foreign Exchange (or shorthand “Forex”) company. There are various reasons why you may prefer to do this rather than progress your exchange to Euros through your high street bank.
Usually the Forex company assists you to “buy ahead” meaning that if the current exchange rate is unappealing and you feel that it is going to improve – oddly it often dramatically improves in July and August – then you can then reserve your funds for a time when it’s more convenient to you.
You may become aware that there is currently a much improved exchange rate than in previous months, for example, but you don’t need the funds until later in the year, you will therefore be able to lock the price you buy your Euros at. This allows you to be sure that you will have sufficient Euro’s when you need them. Most Forex companies will deliver your Euros, upon your instruction, to a Spanish bank account that you will have opened.
If you opt for purchasing with a mortgage and you receive your salary, pension or income from other investments in your home currency, you also can set up a monthly arrangement whereby your funds are received, converted and loaded into your Spanish account ready to meet your monthly commitments
Whatever your rationale it’s important to compare your regular bank rates with those of a Forex specialist. High Street banks that don’t specialize in foreign exchange work invariably have rotten rates. So watching what your bank is offering and how you may be better off using a specialist Forex dealer may become self evident.
Generally, as the Forex company does nothing other than exchange funds for those in another currency, they are usually able to offer more appealing rates particularly for larger transactions. Nothing will prevent you from discussing with your Forex the rate that they can offer you for your particular transaction.
Always remember, the larger the transaction the greater the incentive there may be for the Forex dealer to negotiate a more attractive rate for you. I challenge to try to do that with your High Street bank!
An issue that you should be wary of and on the lookout for – to avoid a serious culture shock – is that many Spanish banks charge receiving fees to take money into your account. These may be a flat rate or a percentage of what you are sending to your bank. The net effect of this is that you may underestimate – by the loss of the charge made – the amount that you need to send to your account to settle the upcoming cost for a particular element of your purchase transaction or other amount that you need to pay. So it may be worth discussing this with your Spanish bank to ensure that you are not left short of funds.
Remember as an owner of a property in Spain you will be incurring both annual taxes – non-resident income tax – and monthly expenses, mortgage and utility bills an annual costs including IBI and Basura. So establishing a responsive relationship with a Forex company who delivers you a good rate of exchange and a great service is a really good idea.
If we can be of assistance to introduce you to a Forex broker that we’ve known for a number of years please, just ask.
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@biznagapartners.com
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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.
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