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BUYING IN SPAIN

WHY SHOULD I BUY IN SPAIN?

The assets that have made Spain the preferred investment in recent years, whether as a place to spend your retirement or as a holiday destination, are without a doubt:

The weather: very mild winters in the south.
Access facilities: many low cost flights departing from Belgium.
And an incomparable quality of life: assistance throughout the year and a cost of living below the European averages.
Add to that a real estate market that has fallen by almost 10 years in price, to reach price cuts that sometimes reach 50%, and has the perfect recipe for a medium-term investment without risk. The Costa Blanca and the Costa del Sol are particularly affected by these price decreases, since they were built and developed in abundance at the time when the bubble was about to explode.

Whether it is the largest financiers on the planet, such as PAULSON or BILL GATES, many investment funds or individuals, Spain is today the object of all wishes. So, why do not you like them?

WHY SHOULD I CHOOSE SUN AND LUXURY?

The strength of our group is to provide personalized follow-up and assistance during the entire purchasing process, from the taking of information to the signing of notaries (francophones).

Sun and Luxury is the only Spanish group that has a perfect command of the local market segments, namely: new products, bank seizures and “resale” products. This allows potential buyers to discover and, therefore, compare many properties.

Our employees speak Spanish fluently, which facilitates the process and prevents intermediaries in Spain.

Our services go far beyond the sale! Thanks to our offices on the site, we have a team of professionals who provide an excellent after-sales service. Do you want to update and repaint your property? Do you want to eliminate a bidet, organize your apartment or place a parable? No problem, our team gives you a quote and you can monitor the site for you.

We have also developed a rental management tool to make the most of your investment.

WHY SHOULD I CHOOSE SUN AND LUXURY?I DO NOT WANT TO INVEST I WOULD LIKE TO MOVE TO SPAIN

At Sun and Luxury we take care of any kind of client, from the retired young people who want to look for the sun, to the investor who wants to invest in a property with a certain profitability. It is also one of our qualities: our control of the market allows us great versatility! Our Belgian employees based in Spain can also share their expatriate experience.

Our services go far beyond the sale! Thanks to our offices on the site, we have a team of professionals who provide an excellent after-sales service. Do you want to update and repaint your property? Do you want to eliminate a bidet, organize your apartment or place a parable? No problem, our team gives you a quote and you can monitor the site for you.

We have also developed a rental management tool to make the most of your investment.

WHAT IS THE BEST MOMENT TO BUY IN SPAIN?

It is probably the best time to buy in Spain. In fact, specialized magazines, like economists, agree that 2019 is the beginning of a period of economic recovery for the country. The demand is again in line with the supply, and the quantity of goods decreases from month to month in the most popular areas. This rebound in activity was already announced in 2017. Regarding prices, they are again showing an upward trend in certain regions and for certain types of products.

Promoters and investment funds are once again in the driver’s seat, particularly after purchasing many portfolios of bank properties for the latter. There is also the resumption of “smart” construction for developers (although some regions, such as the Costa Blanca, have been developing new projects for 3 or 4 years).

If we also take into account the interest rates of historically low loans, we can better understand why 2019/2020 will be a good year for those who have not yet taken the step …

WHAT ARE THE FORECASTS OF THE SPANISH MARKET FOR THE NEXT YEARS?

We are seeing a stabilization of the market on the Costa Blanca and on the Costa del Sol, so there are still many cases to be done, even if it is clear that the stock in the coastal zone is decreasing from month to month.

TAX SYSTEM

WHAT ARE THE TAXES ON MY PROPERTY IF I AM NOT A RESIDENT IN SPAIN?

There are several types of taxes to which you will be subject as an owner in Spain:

  • Property tax: between € 400 and € 800 / year depending on the type of property.
  • Tax of non-residents: Spain applies a tax on the income to the second residences called “tax on the income of non-residents”. You are subject to this tax, whether you grant the rent of your second home or not. The rate for the 2016 declaration is 19% of the 1.1% of the cadastral value of the property.
  • The tax on capital gains is fixed for non-residents and is 19%. Local tax on the appreciation of the value of the land when you buy a property from a non-resident. The amount depends on the cadastral value of the land, the period during which the previous owner owned the land, as well as the municipality.
  • Attention: it is mandatory to declare the fictitious rental income, reduced by a fixed fee of 40% of the charges, on your Belgian tax return (which may or may not influence your tax category).

I HAVE TAXES IF I AM NOT A RESIDENT IN SPAIN?

No, but nevertheless, you must make a spontaneous statement after your purchase. In fact, it is mandatory to pay the tax of non-residents, whose declaration is made spontaneously. Do not forget to make this statement.

SHOULD I PAY MY TAXES IN MY COUNTRY IF I AM NOT A RESIDENT IN SPAIN?

No, if you have chosen to establish your tax domicile in Spain, you will have to return a Spanish tax return. Also, since most countries have signed a double taxation agreement, there will be no tax obligation in your country for the property in question.

IF I WANT TO RECEIVE MY PENSION IN SPAIN, WHERE SHOULD I PAY MY PROFESSIONAL PREMIUM?

You will pay your retention in Spain. This option is very advantageous, since the withholding of taxes is lower in Spain: direct debit is, therefore, an advantage for you.

HOW CAN I REPORT THE REAL ESTATE INCOME OF MY SECONDARY RESIDENCE?

Since 2018, the amended legislation on this subject has been simplified.

You must declare an amount equal to 2% of the cadastral value of your Spanish property (cadastral value)

You will find this value in the payment document of the IBI (Real Estate Tax or “cadastre income”) that you receive each year in Spain. This “income” is completely exempt from taxes in Belgium, but through the mechanism of the progressivity reserve, it may slightly increase the tax burden on other income of Belgian origin.

When mentioning this amount, you should not significantly increase your taxation in your country, and avoid a notification of rectification of the statement with respect to taxes on income, with all the inconveniences that this document may cause.

MARRIAGE: HOW TO DISTRIBUTE THE REPORT OF REAL ESTATE INCOME FROM OUR SECONDARY RESIDENCE?

If the property was acquired by two spouses without mentioning a particular part in the deed of acquisition, regardless of the spouses’ matrimonial regime, the amount to be declared will be recovered to half of each spouse.

If the act of acquisition mentions a particular part for each of the spouses, this distribution key will be used to determine the respective amounts that will be declared for each spouse.

STEPS: BEFORE PURCHASING.

I WOULD LIKE TO BUY A RESIDENCE IN SPAIN- HOW CAN YOU HELP ME?

A) in your country of origin

The first contact with Sun and Luxury: we will make an appointment in one of our offices or on our web site, in your home or in one of our many conferences throughout the European Union (see calendar)
We will study your objectives with you: do you want to make your property profitable, move to Spain or use it as a holiday home? Which region suits you best depending on the relief, the type of property you are looking for?
We organize the trip to Spain with you: preparation of the trip (flights, hotels, transport, …).
We recommend several hotels in the chosen region. It is also possible to rent the apartment of one of our clients who has already trusted Sun and Luxury

B) in Spain

We accompany you from your country of origin or you are received on the spot by one of our agents.
Appointment at the Sun and Luxury office in Spain to confirm the visit program.
A Sun and Luxury employee accompanies you on personalized real estate visits, and we make you discover the region (find our “good restaurants, tourist sites …” on our site)

DO I HAVE TO REMOVE MY CREDIT IN MY COUNTRY OR IN SPAIN?

You have both options, you can get the loan in your country of origin or in Spain, which is around 70% maximum financing, or 100% in some cases. Sun and Luxury will help you throughout the mortgage process from the beginning to the signing of your home.

IS PURCHASE SAFE IN SPAIN?

If you call Sun and Luxury, yes. Our team will put you in touch with a law firm in which they speak your language for greater understanding that will guarantee the security of the real estate transaction to make a purchase in peace.

This is really a complex market that is very different from one region of the country to another. For example, in Spain, it is the lawyer who verifies if the property is free of mortgages or charges, and not the notary. The passage against the latter is obviously mandatory to approve the acts.

Sun and Luxury opens your eyes to mistakes so as not to commit … Only a perfect domain of the market allows our team to find you the rare pearl!

DOES DEBT CONTINUE TO PEOPLE OR PROPERTY IN SPAIN?

One important information you should know before buying an apartment in Spain is that all property debts, including mortgages, local taxes and community fees, remain related to the property. As a result, the new buyer will have to pay all the remaining debts as soon as he buys them. This is why it is essential to verify the financial status of the property with Sun and Luxury. At Sun and Luxury, this verification is done automatically through the law firm at the signing of the preliminary contract, and a few days before the final signature.

MY HOUSING IS IN A GHOST AREA?

Not if you buy with Sun and Luxury. The problem of the deserted villages was one of the consequences of the Spanish crisis, since some promoters went bankrupt due to lack of liquidity. However, Sun and Luxury guarantees optimum quality and safety, working in particular with renowned developers and banks.

PROCEDURES: AT THE TIME OF PURCHASE.

I FOUND THE GOOD THAT I WANT TO BUY. HOW CAN YOU HELP ME IN THE PROCEDURE?

Once the property is found:

We put you in touch with a French law firm to answer practical questions, real estate, …
We arrange an appointment with a rental management manager if necessary.
We make an appointment with an after-sales service manager to define the changes that will be made in your new acquisition (various installations, furniture, renovations, interior decorations, …) if necessary.

WHAT ARE THE LIMITS OF ACQUISITION IN SPAIN?

The peculiarity of Spain is that there is no legal or fiscal deadline as in most European countries (4 months from the date of signing the sale agreement). The term is contractual and, therefore, constitutes an agreement between the parties. The delay in Spain is therefore much shorter than in their country of origin.

In practice, delays often range from 1 to 2 months from the signing of the booking contract and it is usually very difficult to negotiate additional time with the seller. Being the latter, in most cases, rushed to sell.

The fact that this period is so short can be understood, in particular, by the fact that the urban planning and / or tax investigation of the property carried out by the law firm can be done only in a few days.

On the other hand the delay also depends on the type of sale. While banks tend to have very rigid and short time limits, promoters are generally more likely to accept more reasonable terms.

Therefore, it is essential to master the financial package before traveling to Spain, especially for a loan in your country of origin. We strongly recommend that you anticipate the financial problem with the collaboration of Sun and Luxury.

HOW MUCH SHOULD I PAY AT THE TIME OF PURCHASE?

Expenses at the time of purchase are 14% of the sale price.

  • 10% VAT
  • 1.5 registration fee
  • 1.21% of the IVA attorneys fees (minimum € 1,200)
  • Complementary costs (Notary, registry, tax stamps …)

HOW MUCH SHOULD I PAY FOR THE RECURRENT COSTS, EXPENSES. INSURANCE, TAXES ...?

It is necessary to have a budget that ranges between € 1500 and € 2500, annual recurring rates for a 2-room apartment.

These include:

Condo rates: varies according to the residences, infrastructures and services included in the condominium: swimming pool (s), elevator (s), security guard (s), gardens, …). Based on a 2-bedroom apartment, charges usually range between € 30 and € 140 / month.
Fire insurance / civil liability: costs approximately € 200 / year in a 2-room apartment.
Municipal tax: street lighting, garbage collection, … Between 100 and 120 € / year.
Real estate tax: variable between € 400 and € 800 / year depending on the type of property.
Non-resident tax: notional income tax calculated as follows: 24.75% of the property’s cadastral value of 1.1%. Example: if the cadastral value is 100 000 €, the tax will be 24.75% of the 1.1% of 100 000 € = 272.25 €

WHAT ARE THE MAIN ADMINISTRATIVE STEPS IF I WANT TO BUY A PROPERTY IN SPAIN?

Purchase offer: The Reserve / The Offer
The sale agreement: The Private Purchase Contract.
The authentic act: The Scripture.
The Reserve / The Offer:
When you sign the offer to buy a deposit, you pay until the sale agreement is signed.
This deposit is usually paid in the third account of your Spanish lawyer. The sum of this deposit generally varies between € 3,000 and € 6,000. In case of withdrawal, the amount paid is recoverable as long as it is still in the lawyer’s account.

The Private Purchase Contract:
This is a private document signed by the parties. Of course, the signature of this document is prior to the signing of the public document before the notary.
By this law, you agree to sign a public deed before a notary within a specific period. If you do not fulfill your commitments, you will lose your deposit.
Depending on the time and conditions negotiated, a second deposit may be required.

Writing:
The authentic deed of sale (The Public Deed of Sale) is a public document signed before a notary. In this act, the parties will demonstrate before the notary their willingness to sell and buy and the conditions provided, the notary will validate these statements and guarantee the “materiality” of the sale through various controls (legitimacy of the seller, payment of taxes, seizures , debts, easements, etc.). During this act, the parties can be represented: at Sun and Luxury it is a point of honor that our clients are always accompanied by a lawyer. It is at the time of the Deed that the key will be delivered to the buyer against payment of the balance owed by a certified Spanish bank check.

Attention: in practice, the notary rarely takes measures to secure the transaction, so it is essential to work with the office of a lawyer who will secure the transaction. The lawyer will verify that the property is free of charges and mortgages, and that it is in order at the level of urban standards.

CAN I DECIDE ONCE IN MY COUNTRY?

Clear. In addition, it is possible to advance the process from your country, but this, however, requires more time (it will be necessary to guarantee with Sun and Luxury that the seller of the good allows a reasonable time).

It will be necessary, in this case.

Or, grant a power of attorney to the Spanish lawyer’s office through a notary in your country and then through the Ministry of Foreign Affairs to validate the power of attorney.
Contact the Consulate of Spain in your country to formalize the same power and / or obtain your NIE (foreign identification number), mandatory at the latest for the execution of the acts. This is the cheapest and easiest solution.

From Sun and Luxury we will also help you with the whole process.

WHAT ARE THE COMPULSORY FORMALITIES THAT MUST BE COMPLETED BEFORE YOU BUY A PROPERTY IN SPAIN?

You must :

Be represented or followed by a specialized lawyer.
Obtain a NIE (foreigner identification number). The lawyer’s office takes care of it if you ask when you are there. If this is not the case, you must request it at the Spanish consulate in your country.
Open a bank account in Spain, ideally to do when in place
If you are married under the property separation regime, make a sworn translation of your marriage contract.
Keep a record of your credit in your country or Spain and make sure that the deadlines are kept under control with the Sun and Luxury team and the law firm.

WHY DO I HAVE TO USE AN ATTORNEY OFFICE AND NOT ONLY A NOTARY?

In Spain, the notary does not perform exactly the same role as in his country, in fact, only deals with the verification of identities and the transfer of the acts themselves. That is why it is important to work with a law firm that ensures the transaction. The lawyer will verify that the property is free of charges and mortgages, and that it is in order at the level of urban standards. If the lawyer’s office gives you a certain serenity, it protects you mainly legally through your civil liability (insurance that covers your actions).

Your exact paper:

Securing the transaction
Verification of planning documents.
Verification of the ten year warranty.
Check if the property is free of mortgages and other debts (condo debts, mortgages, tax debts, …)
Administrative procedures (opening of account, obtaining the NIE, payment of taxes, modifications to the cadastre in anticipation of the date of the act, signature of the various purchase documents, commitment to sell, appointment with the notary)
After the act, opening of the water and electricity meters and registration of the act.
At no additional charge, most clients grant a power of attorney to the attorney’s office to carry out the various steps. This same power can also be used to issue documents for those who want it.