Buying a property in Gredos.

Buying a property in Gredos.

Buying a property in Gredos was a very popular thing to do, till current recession. 
The area has a pleasant, healthy climate and in past years the local authorities made great efforts to increase the number Spaniards to invest in the area. In general, Spain still derives more of its foreign income from tourists than any other country in Europe. Due to current low European interest rates and a high number of properties for sale at low cost, now is a good time to buy property in Gredos. There is a very wide selection of standards, from farmhouses and plots through to villas, townhouses and new apartment developments. There is no shortage of properties in Gredos and it pays to rely on a well establish company to care for your requirements. Before you buy a property in our area, you should use our website to look at the different type of properties, then consider visiting them before deciding what to buy. Many people also rent a property in that area first. Here's a simple guide to get the most out of buying a property in Gredos:Set your budget limit and stick to it. Visit the property at least twice before you make a decision. Check what amenities the property has such as electricity, water, gas. Have our builders or architects examine the structure of the building. Talk to your prospective neighbours about the area. If you are unsure about a property, take photos and draw sketches to take home with you. As your legal advisor, we will check ownership of the property before you sign anything (check out our conveyance guide). We will also check outstanding debts on the property before you sign anything.

Finance. As developers of new properties, and depending on your income or assets, our banks will offer up to 80% over 20 years for residents. If you are European resident, our local banks will offer anything up to 60%. Most loans are long-term and secured on the property. When seeking a loan, make sure you are aware of the interest rates and if they are fixed or floating. Our banks will ask for passports, residence permits, payslips, sale contracts and copies of the title deeds. There are many advantages to taking out a mortgage loan to purchase your property, in the form of tax allowances (check out our tax guide). You may need to transfer money into Spain and you need to protect yourself: When you buy a property in Spain, you will know the price of the property in Euros but you will not know the actual cost until you buy all of the currency to pay for it. This means that the property could either cost you more than you had planned (if the Euro strengthens) or the property could become cheaper (if Sterling strengthens). Recently Euro has fluctuated more than 10% against the Sterling within a matter of months, so it’s the right time to start buying. On the basis that you are buying a property and not speculating on the currency markets, it is worth fixing the exchange rate for all of your future stage payments of the mortgage loan. To fix the exchange rate: 1/ Buy all of the currency now, and hold it on deposit and send regular payments when they are due from your Sterling to your Euro account. To do this you need a “spot contract” to have full funds available. 2/ Buy as much currency as you can afford now (e.g. for initial payments) and reserve an exchange rate for the remaining payments. To reserve an exchange rate you need to buy a 'forward currency contract'. In effect you are buying currency now but paying at a later date when you have the funds available. The exchange rate that you achieve on a "forward contract" is not quite as good as that for a "spot contract" but it does guarantee that you know the cost of the property. You will be required to pay 13% of the value immediately and the balance by the date that you have reserved the currency for. As agents, developers & builders, we work closely with most of the local banks, in helping private clients buy currency for overseas property purchases. Our banks can offer you: Commercial exchange rates, transfer of money to Spain; Guaranteed exchange rates for up to 2 years (subject to a 10-15% deposit).

Initial Costs. As well as the cost of the property, the buyer will be liable for transfer tax (VAT), which at present still is (till June 2010) 7% on a second-hand property or new one, plus 1/2% stamp duty. The property registration office will charge you a fee to change the new deeds into your name. This is usually between 20,000 and 50,000pts. There will also be notary charges for copies of the 'escritura publica'. The charge is on a scale depending on the contract price. In total you should allow 13% of the purchase price for costs. Banks may also charge an opening commission for mortgage loans.

Annual Costs. The local town hall charge IBI which is an annual real estate tax. The previous owner is obliged to give you copies of previous bills. Community charges apply when you buy a property on a community development. These cover things like maintenance, swimming pools, gardens etc. You will also be liable for a wealth tax, payable annually and based on the value of the property and a property owner’s income tax based on your income from the property. We will clarify these in detail at point of enquiry

Legal matters. All property in Spain is registered in the Registro de Propiedad where you will see who owns the property, the exact size of the property and if there are any mortgages etc on it. Only the people named on the title deed have the right to sell the property.

As agents or developers of a new property, we will provide you with Deed of Declaration of new construction, for which a municipal Occupancy permit Certificate of the property will be required. Normally, before the purchase of a property is made official, there is a prior agreement drawn up between the buyer and seller. This document will identify the two parties and set out the terms of purchase. We will advice you before signing this, in order to reassure that it is the property you want to buy. You can lose any deposit you have paid if you pull out of the purchase and there is a penalty clause in the contract. In the case of the seller defaulting then he has to pay twice the amount. When it comes to complete the purchase, this has to be before a notary, in the form of a public deed. This ensures that the details are entered onto the public records.

Home Insurances are compulsory by law when taking out a mortgage. Comprehensive household insurance is available to protect your home and contents. Alternative Life insurance can be taken out to guarantee payment of the loan in the case of death.

The cost of property. As builders, we are offering on average new property a price of around 1,200 Euros per square metre. An average villa of 100m2 with 3 bedrooms will cost 120,000 Euros.