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CASA DEL SOL step by step#2 12/3/03 9:31 am Page 2 Casa Del Sol Properties USEFUL INFORMATION ON BUYING IN SPAIN AND THE SPANISH ISLANDS CASA DEL SOL step by step#2 12/3/03 9:31 am Page 3 Page 2 A NEW LIFE IN SPAIN How does spending your winters in a warm sunny climate, relaxing on a sun-kissed beach or in the beautiful unspoiled countryside appeal to you? Sounds great doesn’t it, but owning your own home abroad need not be just a dream. Never before has it been more straightforward to set up home in Europe. Communications are excellent, air travel is inexpensive, single currency has made living and working in the EU far easier, together with the fact that the cost of living is much cheaper, Spain certainly has a lot to offer. The challenge of living in a new country with their customs, language and a slower pace of life is welcomed as a great adventure. It is greatly recommended when buying a home abroad to set up a Euro account, and as a property owner it is important to make a Spanish Will as should you become a permanent resident, (i.e. spending more than six months in the country), you would be subject to the Spanish tax system. Reviewing your English Will is also advisable at this time. INTRODUCTION At Casa Del Sol Properties our aim is to make the purchase of a home in Spain or the Spanish Islands trouble free and enjoyable. On the other hand, to those who follow U.K. press and T.V. reports, it will come as no surprise that the risks attached to buying property in Spain can be greater than those in the U.K. These so called “Horror Stories” are nearly always the result of British buyers failing to deal through a reputable company. Casa Del Sol Properties have many years experience in the market and can help avoid these problems. For example, we suggest that purchasers should always use a competent lawyer to safeguard their interests, and can recommend solicitors who have practices in both Spain, the islands and the U.K. and are experts at conveyancing. This guide has been produced by Casa Del Sol Properties to provide helpful information for clients who are interested in purchasing a property in Spain, and is intended as a step by step guide that leads a potential purchaser through the various stages of buying a Spanish property. WHY CASA DEL SOL The company was established in 1975 and thus has had almost 30 years of experience in selling properties in Spain and the Spanish islands. Over that period of time we have been able to develop associations in Spain with agents, developers and lawyers who we trust, who we can now recommend wholeheartedly. Casa Del Sol have four offices in the U.K. in Chichester (West Sussex) Emsworth (Hampshire) London and Northampton, and we strongly urge any prospective buyers to take the trouble to travel to one of our offices and meet senior personnel face to face where trust and confidence can be established rather than to merely talk over the phone. The full addresses of our branches and telephone numbers are shown at the back of this brochure. There will always be an opportunity to meet us at one of our fortnightly exhibitions around the country, please request a schedule to ascertain the nearest exhibition in your area. Our records show that over 90% of our sales have resulted from meeting clients rather than merely telephoning from the result of an advertisement. Casa Del Sol have on offer, literally hundreds of new developments and resale instructions from Sotogrande in the west, to Nerja and Denia in the east. We also specialise in such areas as Marbella, Nerja, Torrevieja and Moraira and in the new up and coming resort of Aguilas. CASA DEL SOL step by step#2 12/3/03 9:31 am Page 4 Page 3 INSPECTION VISIT We can arrange a tailor made Inspection Visit of 3/4 days duration, departing from Gatwick, Heathrow, or alternative airports any day of the week (subject to availability) from £99.00 to selected destinations The cost includes return flight, transfer to and from the airports, hotel, breakfast, lunch and dinner. Staff from our office will personally show you a comprehensive selection of properties within you price range. If you are interested in an Inspection Visit please contact the office to make the necessary arrangements. DECIDING TO PURCHASE - BUYING A PROPERTY - LIVING IN SPAIN Each of these sections are covered thoroughly and will provide the buyer with all the necessary information. For further specific information on matters not covered within this guide please contact the office and we shall be pleased to be of assistance. Every effort has been made to ascertain that the information contained herein, as far as possible, is correct. WHY SPAIN? Spain is my far the most populated country in Europe for a second home, and indeed similarly this applies to total emigration. There are many reasons, but without doubt the climate closely followed by the cost of living and some of the most beautiful and varied countryside in Europe. The Costa del Sol and Costa Blanca are within easy reach of a plethora of historical towns and cities, and of course the country is just over two hours flying time from most UK airports. WHICH AREA? Having chosen Spain, the next step is to decide the region. The main areas open for consideration are Costa Blanca, Costa Calida, Costa Del Sol, Majorca, Menorca and Tenerife.. ARRANGING FINANCE Many prospective purchasers any require finance which can be arranged through our associates using any assets or equity as collateral which they have here in Great Britain, or on the Spanish property of their choice. It is strongly recommended that before visiting Spain one should be sure that finance is readily available for an overseas purchase. EXAMPLES OF MONTHLY MORTGAGE REPAYMENTS AT 5% AMOUNT 5 YEARS 10 YEARS 15 YEARS 20 YEARS £20,000 £378.00 £213.00 £159.00 £132.00 £30,000 £567.00 £319.50 £239.00 £198.00 £40,000 £756.00 £426.00 £318.00 £264.00 £50,000 £945.00 £532.50 £398.00 £330.00 £60,000 £1134.00 £639.00 £478.00 £396.00 £70,000 £1323.00 £745.50 £557.00 £462.00 £80,000 £1512.00 £852.00 £636.00 £528.00 £90,000 £1701.00 £958.00 £716.00 £954.00 £100,000 £1890.00 £1065.00 £796.00 £660.00 CASA DEL SOL step by step#2 12/3/03 9:31 am Page 5 Page 4 The following information is supplied by an independent advisory company - Elkcrest Limited - trading as King and Company PURCHASING A PROPERTY IN SPAIN There are three options available when considering the purchase of a property in Spain. These are: a) Purchase for Cash. b) Raise the money on a UK property. c) Negotiate a Spanish Mortgage. The general rules for raising a mortgage are the same both in Spain and UK. In other words the maximum you can borrow is related to your disposal income. Normally 2.5 times income minus any existing mortgages. Raising money on a UK property Co-located with King and Company is King and Company Financial Services, a fully authorised and registered Financial Advisor. All queries on re-mortgaging a UK property, Life Assurance, Investment or Offshore Investments should be addressed to Barry Painter on 0870-777-0545. Raising a Spanish Mortgage:- There are two main sources for raising finance for the purchase of Spanish Property:- a. UK Lending sources based in Gibraltar. b. Spanish Banks. In general the minimum mortgage available from these sources is £12,500 with a maximum borrowing of 70% of the declared purchase price. Terms can vary from 5 - 20 years, but must usually end by age 65 or 70. Interest rates are typically 1.5% - 2% above the European Bank Base Rate which is currently less than the UK Bank Rate. The mortgage will be nominated in Euros. As a guide to the costs of repaying a Spanish Mortgage the following figures are calculated on a loan of £20,000 at an interest rate of 5% on a Repayment Basis:- Period of Mortgage Monthly Repayment (£ Sterling) 5 years £378.00 10 years £213.00 15 years £159.00 Costs of raising the money could be a maximum of:- Arrangement Fees: up to £650 Lenders Fees: up to 1% (minimum £250) Some Spanish lenders will require life assurance to be assigned. The survey fee is based upon property value, but as a guide is generally around £220 for a property under £100,000. Solicitor’s costs are typically 0.75% - 1% of property value. CASA DEL SOL step by step#2 12/3/03 9:31 am Page 6 Page 5 Remember that solicitors and taxes, combined with currency fluctuations, can add up, normally to a maximum of 10% of the declared price of your property. This amount can vary a little depending on the location of your property in Spain. Procedure and documentation for purchasing a property in Spain In all instances we recommend that the Purchaser utilises the service of an Abogado, a Spanish lawyer, a member of the Spanish Bar Association, the Colegio de Abogados. The Abogado will deal all matters relative to the purchase and associated matters including the transfer contracts for Water, Electric, Gas and Telephone, if applicable plus preparation and submission of an application for the Purchaser’s N.I.F.