The ins and outs of obtaining a mortgage in Spain
If you’re planning to take out a mortgage in Spain, the first thing you need to understand is that there are many differences with the process in the UK. It can be somewhat complex, but with the right advice from those in the know on your side it can be done smoothly and efficiently. Finding a good, locally-based advisor is perhaps the most important first step.
It’s worth noting that the Spanish taxation laws in regard to property purchases can be financially damaging to those who want to sell soon after they’ve made the purchase. Capital gains tax is charged on the profit that you’ve made, and this is around the 20% mark. Therefore, if you buy for €200,000 then sell for €300,000, you’re liable to pay around €20,000 in tax.
There are also a number of costs involved when buying a property in Spain. They include:
- Transfer and stamp taxes
- Notary fees
- Registry fees
- Payment to a bank assessor
The stamp tax in Spain can vary from region to region, so you’ll need to find out the local costs involved. In general, you should expect to pay taxes and fees that amount to around 12% of the purchase price of the property. Going forward, it’s worth bearing in mind that some future costs, such as repairs, maintenance and mortgage interest can be tax-deductible.
Get all the right paperwork in place
There are a number of documents that you need to have in place before applying for the mortgage, including a NIE, an identification number that all foreigners will need for such a process. You can apply for mortgages, some of which are designed for ex-pats just like you, at various banks, including Santander, Central Hispano and Caixa Bank.
In most cases, foreign buyers aren’t usually allowed to borrow as much as Spanish residents are. Locals will usually be able to apply for loans up to 80% of the property value, but for non-residents that figures drops to between 60% and 70%. This isn’t the case with all mortgage products, however, so it pays to shop around.
As a general rule, in Spain you find the property before you get the mortgage in place, but again it’s a good idea to start asking questions in advance about what you might be allowed to borrow. Buying a new-build property via Simply Costa Developments brings with it a number of advantages, including full insurance, a 10-year builder’s guarantee and a high rating for energy efficiency.
To find out more about the complexities of obtaining a Spanish mortgage and moving another step closer to your dream of living on the Costa del Sol, speak to our experts today. The friendly, knowledgeable team at Simply Costa Developments are waiting right now to have a chat with you, so call +34 682 66 22 89 soon.
We’re looking forward to working with you towards that all-important move.
Words from our customers
Thank you both for your efforts and we shall certainly pass on your name to anyone we know who wishes to sell in the future. My best regards
A huge THANK YOU to you and Neil for everything out have done for me, you have been BRILLIANT. Wishing you both all the joys of Christmas and may 2018 bring you Health, Wealth and Happiness.
Love Pat xx
Thank you so much for all your help in getting this completed so efficiently. Best regards