Q. Is buying property in Spain a safe investment and is proper title obtained?
A. Spain has a secure and modern legal system in keeping with its status as an important EEC member state. Residential property is transferred with full freehold title using the notarial system and land registries located in each municipal district.

Q. What are the buying costs involved?
A. As a rule of thumb approximately 10% of the value of the property should be allocated for buying costs, which are transfer tax, notary fees, land registry fees, local authority "plus-valia" tax and lawyers fees. New property attracts Vat @7% on mainland Spain (5% in Canary Islands) rather than transfer tax @ 6% which applies to second hand property in all parts of Spain.

Q. What are the ongoing costs associated with owning a property in Spain?
A. There are a number of annual taxes payable, two to Central Government (Patrimonio and Renta) and one to Local Government (I.B.I.) often referred to as rates. These taxes are calculated by formulae related to the official value of the property. In addition to taxes, properties in a Community of Owners (viz. apartments and houses where there are communal facilities) are liable for Community charges to cover the upkeep of these communal facilities, such as gardens, swimming pools, elevators, communal lighting etc. The only other running costs are electricity and water based on usage.

Q. Is it possible to obtain mortgage finance in Spain?
A. Yes. Most Spanish banks will accept applications for mortgages from non-resident buyers. However, many banks will only lend 50% to 60% of the value of the property. Loans can be repaid generally over periods of 15 to 20 years and interest rates are quite competitive at present. An alternative method of obtaining a higher percentage loan is to avail of the developers finance which is incorporated in some promotions. Here the buyer would take over the mortgage originally obtained by the developer from a Spanish Bank and these mortgages can be up to 80% of the value of the property.

Q. Is it risky to buy property in Spain "off the plans" and with stage payments to the builder?
A. A lot of property in Spain is sold on this basis. Providing your lawyer satisfies himself that the builder has the appropriate building license for the project and that the contract provides a guarantee under Spanish Law to cover the stage payments, this method of purchase is quite safe.