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Frequently asked questions about Spain

On many sites about living, working and holidays in Spain there are sections like "FAQ's" and "what to watch out for".
No doubt well intended but if you're looking for that "one" exception to the rule you might be scared off and you’re dreams shattered.
HipoteCasa tries to go the extra mile and will not be so easily put off if 2 banks sell you no.

With this site we will try to show you the difference between one broker and another, for instance, on www.hipotecasa.nl you'll find a large amount of information that's available elsewhere on the web as well but not in one place.
Few organizations take the trouble to place a complete list of all the relative information on their site. On this page we'll endeavor to react to a number of theses found on related websites.

The housing market is comparable to that in the UK.

There are two fundamental differences. 'What it's worth to a fool' is a far more common concept in Spain than it is in the UK. Secondly, the differences between locations are enormous.
Price hikes of ten to twenty percent are quite the norm in some areas, you'll see estate agents screaming for lots to sell.
While in the south 150.000 euros will get you a nice house with its own swimming pool, in Catalonia; this will not even buy you a decent apartment

Owning money is an absolute necessity when buying a house in Spain

Nonsense. There are ways where in case of evident sufficient income it is possible to take out a mortgage. While this will not be easy we will however list here 3 examples where a bank might go a bit further than in standard situations.

If your situation is exceptional it won't be fixed by a standard solution. HipoteCasa will explore the various possibilities for you.

A Spanish temporary sales contract is comparable to that in the UK

This misconception has cost a great many people considerable financial heartache. Very litle is actually settled in a Spanish temporary contract. We advise you to enter into an under the table agreement with the other party or realtor.
Ask us which construction would be most to your advantage. This would be your cheapest and best option. The estate agent has the sale of the property as his primary objective, he will therefore offer you his services free of charge.

A Spanish estate agent works for the person that hired him

Sounds quite logical and the way it should be, but Spanish law also requires the realtor to take the interests of the buyer at heart. If he is aware of certain things that would be to your disadvantage he is required to inform you.
No real news so far but do realize that things in Spain where quite different a few years ago. Where there is a big difference however, is that a seller can enter into agreements with multiple realtors but only has to actually pay one. A smart estate agent will tell you a few negative aspects of the property in order to win your confidence. Perhaps you'll appreciate this and will either put up with these inconveniences or turn to him for another house.

A realtor will get a 5 to 10% commission on the purchase

Oh, be sure, they'll try. Especially German and Dutch property sellers will inform you that 5% is "the absolute minimum." What they forget to tell you as a buyer is, that this sum has already been taken into account when the sales price was determined by the seller.
Lots of estate agents are prepared to negotiate on this, a previously determined amount is becoming more and more the norm, certainly in areas where house prices have gone through the roof.

It's necessary to make use of a lawyer when buying a house in Spain

We frequently enter into business with realtors who have no problem when lawyers are involved in the sale of property. It's only when a gestor shows up that they start being really careful.
A gestor knows the area and he knows who's involved. A lawyer will, in most cases, put to little time into studying your dossier. We advice you to first talk to a gestor, if afterwards you still feel in need of professional legal counsel you can always approach a lawyer through a gestor.

I sell my Spanish house myself so there will be no extra costs to the buyer

When something is sold the government usually wants a slice and so it is with houses in Spain, a transfer tax has to be paid, the notary will demand his fee and if you've engaged a realtor to aid you in the sales process he'll also wants to be paid.
The bill from the realtor will always be for the party that sought his help. So there are costs involved, both for the seller and the buyer.
It is common practice in Spain to not declare the full sum to the government agencies involved. Legal? No, but this falls under the category "everybody does it." This way buyer pays less transfer tax and the seller less revenue over any profit he made on the house.

Claimed real estate cannot be let out

If you rent out your house through official channels you are obliged to pay revenue over the income, if however, you rent the property out by means of a lease you may add the gains received to your other income. It may simplify your efforts to obtain a mortgage.
we don't really approve of this practice. If you buy a house you deserve to enjoy it, do realize that costs of renovation but also garbage collecting and utility bills are recurring features.
Banks are not bothered if you let out.

It takes a lot longer to take out a mortgage in Spain than in the UK

To he contrary. If you are able to turn over all the required documents a bank director can often give you a decision in two days. Bank smart people know that if you've been with the bank for a number of years the the possibilities increase and the rules are applied with less rigor.
What can take months in the UK can sometimes be processed in weeks in Spain.

The Spanish mortgage is old fashioned

As the mortgage was originally designed but in many countries has been overdeveloped into something nobody understands anymore, the Spanish kept it simple.
Either you pay interest and pay off or you pay interest and don't pay off! How much simpler can it be? The Spanish mortgage might seem old fashioned but believe me, it's not.

A life-insurance policy is compulsory

Banks love to tie you down, and what better way to do this than with a life-insurance policy. Like as in the UK, your pension is something that's between you and your bank, besides this, many of course make use of a financial advisor.
If you have enough verifiable income or a turn over a large amount of money necessary to buy the land or property you might not need a life insurance policy. The bank first and foremost looks for guarantees.

Taxations can be done by almost anyone and their judgment will be good enough to satisfy any bank

Spanish banks have in their possession a list put out by the National Bank of Spain, otherwise known as the National Spanish bank. When a valuator is not found on that list his appraisal will not be accepted. There have been too many contrary interests in the past among valuators, for instance them being tied to local councils and/or landowners.

You're obliged to take out a home content insurance policy in Spain

No, but if you need a mortgage or loan a building insurance policy will be required.

You must apply for a N.I.E. number in person

Well, personally yes but not on location and you can hire someone like (HipoteCasa!) to apply for you. You will have sign the application form personally but the actual processing takes place in Spain through the person you hired to mediate in this affair.

The interest I pay can be deducted from the income tax I pay in the UK.

No, if you're registered in the UK you're obliged to pay taxes there and can never be the primary resident of a house in Spain. If you are (when you reside more than half a year per calendar year in Spain) you automatically become a resident there and will pay your income tax to Spain. There you can deduct the interest you pay if of course you receive some sort of income there.
Since you can never obliged to pay income tax in two EU countries at once it is inconceivable that you can partly finance a holiday house (as that's what it is than) from tax deductions in the UK.

A building fund is as easy to get access to as in the UK

When you buy a yet to be build house in Spain the salesperson is usually the builder. He will employ an estate agent to sell the place but it's him that you're doing business with. He will propose the financing, the interest will generally be a little lower than the banks will offer you. One thing that builders are not fond of is that a notary has to register the house to your name.
Payments are made in short terms that bridge the time it takes to build the house. Each time a term passes you pay more interest because a larger part of your house is now build up. Large sums of cash are transferred while building is in progress.
Banks are reluctant to finance building funds and will not always be willing to put up the full amount.

It's impossible to pay taxes twice

If, for instance, you pay property tax in Spain, you can also be hit in the UK for your Spanish real estate. You're obliged to declare your house to the British taxman but not required to pay property tax in Spain.
So you see, there are ways in which you don't pay property tax over your Spanish holiday house at all.

Anyone can sell my house once I loose the Escritura

Official documents like the Escritura will remain in the possession of the notary, they'll never be turned over to you. At every needed occasion all parties need to show their passports and be present in person. This way it's almost impossible for unsavory persons to hijack your house.
In case you of your demise your heirs will have a problem if they cannot find the necessary documents proving your ownership. It then has to be legally reestablished that you were the legal rightful owner.

A will and testament is not strictly necessary if I own a house in Spain

Always have legal documents (preferably in the possession of a notary) in order clearly stating who your legal heirs are. An English will may not grant you the assurance that the transfer of property will go of without a hitch. Prevent any extra suffering for those you leave behind.

When I take care of everything myself I'm:

Just keep on dreaming!

Never say in hind view: "I just didn't know!"

HipoteCasa will enable you to look before you leap and save you from expensive mishaps!

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