Buy a home or vacation property in Sitges
We wish to set out on this page a summary of the services we can provide to you if you are considering purchasing a property in Sitges.
If you would like further information on any aspect of our service, or have any questions, please use the inquiry form at the bottom of these pages to get in touch with us.
An initial meeting and discussion to clarify the brief
Usually about one hour in duration, this can be conducted over the ‘phone, via fax, e-mail or in person.
This is to try and be certain that all parties walk away from the table with a clear understanding of what is expected from each party. This meeting is conducted free of charge.
We also set out our fees for any subsequent work on your behalf
We try to ensure that your expectations of the market and us are realistic and that you understand what you will be required to do. There are options in the way the process can be handled. We explain these and take your instructions.
Of course these may change and we remain flexible in our approach and attempt to tailor our service to your individual requirements.
After the free briefing you have two options:
OPTION A: Consultation
For a fee of €75 we will take you through the property purchasing process here in Spain. The process does change on a more regular basis than is typical in the UK or northern Europe. These changes are driven by EU law and Spain’s requirement to adapt to various directives and update its own variant of codified Napoleonic law. Several recent changes have been introduced as a requirement of money-laundering regulations and a pervasive thought that Spain is losing tax revenue both during the purchase and sales process and also from rental income accruing to foreign owners and not being declared to the relevant authorities. Changes to Capital Gains Tax treatment, Inheritance Tax, same-sex marriages etc have also had significant effects.
This consultation is generally a two-hour “chat” and covers the pertinent information and provides you with an opportunity to ask and understand in your own language. It is important that you understand what is the law and differentiate this from common practice, which may not be the same, and for a first-time buyer can be confusing and for the unsuspecting can be a problem. Especially when faced with bureaucratic hurdles and obstacles.
The law is designed to protect all parties and especially the unsuspecting but understanding its intricacies can be a potential minefield. We have handled, managed or in fact undertaken several hundred property transactions in the 10 years that we have been in Sitges and are better equipped than a number of agencies to assist you.
If you proceed to purchase and then wish us to “hand-hold” you through the process, attend meetings and provide spoken translation services with banks, agents, lawyers and Notaries after this consultation our work is charged at €50 per hour, inclusive of IVA (VAT).
It is also important that you understand the distinctions between residency, non-resident, tax domiciled and non-domiciled status.
OPTION B: Registration
If you wish to purchase property in Sitges, and are resident overseas, we would recommend this option, particularly if work commitments prevent you from regularly visiting Spain.
We charge a Registration Fee of €500. The two-hour consultation enables us to draw up and agree your brief.
We conduct a property search, inspect potential properties, and select a short list of four or five that conform to your brief. We will arrange for you to visit the properties and accompany you.
Upon successful purchase of any of the properties, we charge a fee in total of 0.75% of the purchase price, against which your registration fee of €500 is credited.
Introduction and instruction of Estate Agents
Dealing with estate agents can be a ‘hit or miss affair.’ 2008 has seen a contraction in the market with hairdressers now firmly outpacing estate agents in terms of the number of outlets, whereas in previous years these two groups always vied with each other for space!
Although there are voluntary associations of estate agents with sound commercial practices and rules when acting in an advisory capacity there is still no regulation of estate agents by the state, although there is a movement in place for a requirement for them to register and have their activities clearly set out in the Memorandum and Articles of association of their company set-up. The truth is that estate agency is a largely non-controlled activity in Spain and Sitges. The majority of agents are well intentioned and reasonably professional but there are rogues and unscrupulous agents.
We try to ensure that the estate agents have a clear understanding of the kind of property that you are looking for and the purpose, e.g. self-financing from a letting perspective; owner occupation; investment opportunity which may include the need for works or ‘ready to occupy’; holiday home; holiday home with occasional letting, etc.
Location: this may vary dependent upon whether you are looking for a longer-term home or something that is going to be popular with the holiday trade. Some areas of town have substantial re-development going on or planned. Property prices are changing at different rates in different areas. We will assist you with this information and tailor viewings to your brief.
We work only with those agents that we have found genuinely listen to instructions and work to meet them.
On no account should you pay or agree to pay, a fee to an estate agent – the vendor of the property does this.
Fees paid by vendors to agents start at 3percent and can escalate to 10percent! Some agents will work alongside other agencies, one with the vendor and one with the purchaser. As a purchaser you should not be asked for a fee for estate agency work.
Of course the above may not apply if you are looking for specific properties or have a particular use in mind, e.g. guesthouse or commercial use, such as bar or hotel.
Introduction to Bank or Mortgage Providers
Some providers of finance are happy to lend to the non-resident market whereas others charge premium rates for doing so.
Although Spain has been relatively unaffected by the sub-prime catastrophe and banks in general are very conservative in their lending approach the market for home finance has tightened in 2008. Whereas in previous years lenders would have made a loan of a maximum of 80 per cent of a property valuation/purchase price this is now changing with some only lending to a maximum of 50 per cent of loan to valuation (LTV.) In the past as well it was generally possible in a rising market to get lenders or valuers to massage a valuation so that a loan percentage to actual price could be accommodated. This is most definitely not the case in 2008.
We know and work with a number of banks and lending institutions and keep abreast of their current lending criteria. This can save you countless wasted trips around the banks.
Some providers will charge different fees (usually more) for work on behalf of non-resident applicants.
Some banks charge high transfer costs or offer low exchange rates for remission of funds from abroad. Yet again some banks hold on to remitted funds for excessive lengths of time before allowing you use of your money!
We can help you through this minefield and make introductions to banks that provide well-costed and transparent services.
We can also help with the completion of mortgage application forms and tell you what you will need to supply for your application to succeed.
Generally you will be required to provide a statement, usually from an accountant (or for UK applicants Inland Revenue statements or P60s or equivalent) showing your last three years' earnings and showing evidence of your ability to service the debt and taxes on the property.
Also at this time you normally open a bank account with a minimum injection of funds to cover the below item.
The Bank (lender) will instruct an independent certified valuer to carry out a valuation. This generally takes two to four days and the bank will then make an offer in principle based upon this valuation, generally about 10 days later at present after the paperwork has been examined by the banks risk office. The valuation fee is payable immediately and is generally between €300 and €600, depending upon the valuation, plus IVA tax at 16%.
If you accept the valuation and mortgage offer and have agreed the price with the vendor then you can proceed very quickly to purchase.
Introduction to a lawyer
We strongly recommend the appointment of a lawyer to check the sale contract, which will be written in Spanish (he/she can also draw up the sale contract but this is usually done by the vendor) and along with the bank he/she will check the title and outstanding charges against the property. If you are purchasing without the need for mortgage funds this is doubly essential. It is important that the sale contract includes commitment to discharge these - otherwise you can be liable for them!
The lawyer will also check local taxes and service provisions and certifications and the provisions of the communidad (co-operative of owners of properties in the case of an apartment) or management company should one have been appointed (this is unusual but not unknown). It is also important to ensure that utility bills are paid up to date and that the property has a current certificate of habitation (Cedula de Halibilidad.) If the property is a new build then it is also important to know the status of forming the Communidad, if an apartment, and the service charge percentage that you might be responsible for and what this does and does not cover. Also with new build property it is important to ensure that you will be supplied with the certificate of the final works to the property being approved (Certificat de fin de obres) alongside the habitation certificate. Otherwise you may find it impossible to have utilities connected or transferred into your name.
It is possible that the vendor will ask for a portion of the sale proceeds to be "black" i.e. unofficial and thus not included in the price entered into the escritura or sales document. This is for agreement between you (with us as advisors) and the vendor. Our advice would be to minimise such payments and in any event not to exceed 20 per cent of the sales price as black money as your eventual capital gains tax will be severely impacted.
There is also increasing vigilance from the authorities over declared values of property transactions and they can declare their own valuation (and impose fines and taxes based upon this) if they don't believe the declared price. We would look to negotiate this with the vendor on your behalf, should you so instruct.
The consultation also includes:
- Introduction to realtors
- Explanation of mortgages and possible mortgage models
- Explanation of potential rental income
- Tax management and effective tax registration
- Management charges
- Financial spreadsheets we provide each month
- Explain banking arrangements. We deposit monies into Spanish accounts and clients leave signed cheques with us for larger purchases as necessary
- View marketing material
- Brochures, websites and databases
- Property Maintenance and Servicing
- Universal standards i.e. bed sizes, kitchen equipment
- Pre purchase surveys
For More InformationIf you are interested in our services, or would like further information, please fill out our simple inquiry form and we will be happy to help.