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Buying and Selling homes in Spain

Protect Yourself with those Property Bargains in Spain.

It can be nerve racking or a breeze buying a property in Spain. We are an agency in Andalusia and different autonomous regions have slightly different taxes but all require 3 main things: a foreigner’s tax number called an NIE number, Title Deeds signed before a Notary and Land Registry of the property purchase.

An NIE number is something you get from the Police Station. If you use a lawyer for your purchase they will get this for you or you can apply yourself. Here are a couple of examples of how to fill the form out and each line translated. The reason for needing an NIE must also be stated.

English instructions how to fill out NIE form

NIE form translated

Title Deed Price and Amount Paid

There was a time when properties were sold for two different prices, coyly known as ‘A’ and ‘B’ monies. The ‘A’ price was on the Title Deeds and the ‘B’ was cash in hand counted with spit dampened fingers far from the Notary walls. Even today the Spanish tax office turns a blind eye on a 15 – 20% difference plus or minus from the normal market price. Don’t be tempted though. In general, they don’t trust you and suspect something is afoot if you get too much of a good deal or agree to a bad bargain on your part. A Buyer will end up paying tax on the amount the government thinks the property was really sold for, the imputed amount. The only way to avoid it is to get a property valuation done and take your claim to court. Costly and time consuming if you lose.

For those of you interested, the imputed amount or REAL VALUE is based on coefficients from town halls, the Title Deed Price and the Cadastral Reference – based on sometimes outdated surveys of land boundaries. By or before July 2018 a land law reform is being introduced. Current recommendations by a government commissioned think tank is to change the REAL VALUE to reflect only the Title Deed Price. Another idea being mooted is to start charging a local capital gains tax on rural properties as well as the current policy of applying it to urban properties on gains from selling your property.

As we’ve seen, sales have picked up, still not a high percentage of conveyances, although slowly improving. The years of recession from 2007 hit Spain well below the belt with repossessed properties and ghost towns of brand new housing estates. In the noughties so many people were dependent in one way or another on the construction industry. When it ground to an almost complete halt, so too did the country. Fortunately, people and things evolve; no-one wants to return to those dark days, but the unscrupulous soon left the industry – why would they stay? There were no longer any rich pickings. The agents and agencies that managed to hang on in there during the lean times came through with a limp and a smile. Many, like TMT Spain Real Estate, offer more to Buyer and Seller as a matter of course. We feel we have a duty to explain and inform, both to our clients selling and the applicant looking to buy. Clearly, both form part of the same process. Naturally, we believe we always have done and our team have transferred skills and knowledge accrued in other professions as well.

What is an Agent?

An agent is just that, an entity acting on behalf of another. When it comes to properties the relationship is a tad contrived. The Buyer is usually an interested party whilst our client is almost always the Seller – but both come together in a bargain of offer, acceptance and consideration. The process can be incredibly fast or proceed slowly and cautiously. We don’t mind, we’re there to help however long the journey. Our local knowledge and connections are relied on by Seller and Applicant alike. Whether it be by acting merely as a de facto tourist information service – every Estate Agent recognises that function, or making sure you understand how properties are bought and sold. Our neck of the woods is the autonomous region of Andalusia, Spain.

Buying & Selling Resale Properties in Andalusia.

There are many more Resale properties on the market than new builds, but you can once more see cranes along the skyline. This is happening because of unfinished promotions being revamped and also due to brand new green field sites being built – both courtesy of new Land Law Legislation for Developers and Promoters to take the plunge and invest in Spain.

If the house you want to buy has had others living there already, a Resale, termed ‘second-hand’ in Spain, you need to check the following documentation:

  • Title Deeds. Make sure the person selling the property really is the owner or authorised to sell. We check this as part of our general due diligence when we list a property.
  • Ownership and status of housing charges. (Simple Note of the Property Registry). For this you need to ask for ‘Datos Registrales’ which give ‘Finca, Tomo, Libro & Inscripción’ stating what the property registration number is and where it is filed – both literally and in which district. This information is on the Title Deeds or a copy of a ‘Nota Simple’
  • Last annual IBI receipt (Council Tax or Urban Tax, Impuestos Bienes Inmuebles).
  • Community of Owners’ receipts proving that the seller is up to date with payments of shared community expenses. (It’s a proprietor owned management company.)
  • Latest receipts of utilities: water, electricity, gas, etc.
  • Completion on Property. If the conveyance follows the normal convention the Seller pays the costs of cancelling his/her mortgage and the bulk of the Notary costs for drafting the new Title Deeds. The Buyer pays for the Title Deed copies, registration fees and, as appropriate, VAT or Property Transfer Tax. However, it is not mandatory to follow that convention although common.
  • The Seller needs to make sure they have a certificate of the energy value which they hand to the notary before sale.

The Buyer should allow approx. 12% – 15% on top for costs. You pay Stamp Duty, Transmission Taxes, Notary Fees and Land Registry Fees. Plus, lawyer’s fees should you decide to instruct one. (It is not obligatory.) In the past, you also had to pay the mortgage lenders’ Notary and Stamp Duty costs for putting the mortgage in place – which with the admin fee added up to about 4% of the amount borrowed. But this practice has been ruled out by the Supreme Court as an unfair contract term and now you only pay an admin fee on taking out the mortgage, the valuation and any costs that fall directly to you. Those who paid this in the past can claim back these costs providing the mortgage is still in place or was paid up in the last four years. Refunds in Andalusia are on average 4,313 € according to the property portal Idealista and Legal Services Provider, Reclamador. (a ‘crowd complainer’ platform,). The protection available for the consumer does serve to underline how the legislature has acted to inject confidence in the property market once more.

Property Taxes are levied against the price of the property as stated in the Title Deeds. At the time of writing, assuming no special cases, THE BUYER pays 8% ITP on a property up to 400,000 €, 9% from 400,001 € up to 700,000 € and 10% thereafter.

Garages and Parking Spaces in Underground Garages can either have a separate Property Title Deed or be annexed to the Residence’s Title Deed. For separate Deeds it’s 8% tax up to 30,000 €, 9% to 50,000 € and 10% thereafter for a maximum of 2 garages or parking bays. Make sure you know which parking space belongs to the house or apartment that you are buying, it’s an area that can sometimes be overlooked. The applicable Property Taxes are the same as for properties when sold in the same Deeds.

como comprar a una casa en España

Property Sellers are responsible for:

  • Certificate of Energy Rating. ‘Calificación Energética’. Drawn up by an architect evaluating the energy consumption of the dwelling. In Andalusia, almost all resale properties rate as Grade E, with Grade A being the highest, it may not be perfect, but it is normal.
  • Town Hall Capital Gains Tax – Incremento del Valor de los Terrenos de Naturaleza Urbana (IVTNU), more commonly known as plusvalía municipal. The clue should be in the name – you have to make a capital gain to pay this. But many local authorities have been exacting payment form Sellers even when they sold at a loss, basing the value on the cadastral reference as well as the old inflated market prices and opting for whichever price was higher. Note, a Supreme Court decision enshrined in law 15th June 2017, has tried to make it illegal for town halls to invoice Sellers for this if they have sold their home at a loss. People who were forced in the past to pay it despite making a loss can now claim this tax back from the Town Hall. It’s an odd remedy called a revocation process (Procedimiento de revocación.) What makes it strange is how the decision to go ahead with the claim lays in the hands of the local authority. (IKR.) Court decisions are now starting to create their own precedent. And yet, we are still awaiting legislation that stops town halls from invoicing. This is the complication. They have up to 4 years to do so. This means that in practice the Seller needs to file claiming 0€ owed. But at present the town hall could challenge this in that 4 year time frame. Really not acceptable in our opinion when people have sold at a loss and it shows this on the title deeds.

Buying Off Plan or New Builds confirm the following:

  • Works Licence in place
  • Bank Guarantee to protect in case developer goes belly up
  • Occupancy Licence issued before completion
  • Building Specifications have been adhered to
  • Stage Payments where appropriate coincide with actual completion of construction stage as described
  • Snagging List done and signed by both parties
  • Utilities supply and connection paperwork formalised
  • Value Added Tax is 10%

Other than that, enjoy your home in the sun, next to a pool in summer and a wood burning stove in winter.

There’s never been a better time this decade to move home or shuffle portfolios.

And if you are looking to buy or sell a property in Southern Spain, get in touch with TMT Spain Estate Agents – we’re happy to help.

(Article updated 5th April 2019 to reflect changes in the mortgage law.)

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July 2018 Housing Figures INE

Property Sales Registered July 2018

Property Sales Nationwide Buoyant

The national statistics for all of Spain are again positive news for the ongoing recovery of the property market. In July, 169,683 properties were registered at land registry, 14.5% up on the same month of 2017.

Of these the number of property conveyances was 89,092, which is an annual increase of 13.5%.

Sales registered at Land Registry

The breakdown of rural and urban properties shows a high percentage of urban property sales in July of 87.8% and 12.2% for rustic properties. Among urban properties, 58.7% were housing sales.
In July, the number of rustic property sales was up by 8.3% year on year, while that of urban properties rose by 14.3%. This was an annual increase of 16.2% for urban property.

Council Owned and Private Property

In July, 90.5% of the dwellings transferred by sale were free-market dwellings and 9.5% had protected affordable housing status. In annual terms, both the number of free-market dwellings transferred by sale and that of protected dwellings increased by 16.2%.

New and Resale Properties

In July, 16.9% of the dwellings transferred by sale were new and 83.1% were used. The number of transactions on new dwellings increased by 11.4%, while that on used
dwellings increased 17.2% as compared with July 2017.

Figures for Andalusia July 2018

There were 27,743 property transfers recorded in the land registries for July 2018 and of these, 8,730 were free market sales. In percentages, this shows an increase year on year of 20.4%. This equates in Andalusia to 132 transfers per 100.000 inhabitants for sales. And 421 per 100,000 for transfer of title as a result of inheritance, free market sales, and other changes in property title. Andalusia came just a little above the national average, significantly below Aragón (32%) but only 6 – 7 percentage points lower than the next top performers Galicia (28.6%) and Castilla–La Mancha (27.1%).

July 2018 Housing Figures INE July 2018 Housing Figures INE July 2018 Housing Figures INE July 2018 Housing Figures INE

The figures for June 2018 are available here:

Source INE

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property sales June 18 Andalusia

Land Registry Figures Spain June 2018

June 2018 Property Transfers Spain

Nationwide, in June 2018, there were 172,265 properties registered at the land registries in Spain, that is 3.6% up on the same month last year. Of these, residential property sales were up by 1.8%

As we are based in Andalusia, our focus is on this autonomous region. Naturally, the figures taken from the INE are there for all to see and extrapolate as they wish for all areas of Spain.

The graphs below show a combination of rustic and urban properties, (STPR1), then a break down of only rustic, (STPR2), only urban, (STPR 3), and finally the figures for residential property, (STPR 4).

property sales June 18 Andalusia

Property Transactions June 2018 Andalusia

As we can see, in June 2018 in Andalusia, of the 30,356 property transactions, more than three times as many were in the urban sector compared to rural. Andalusia recorded the highest figures for urban plots of land transferred with 1,624. This compares with Cataluña in second place showing 1,366 transfers of land. In third place, with 624, lies Castilla & León – a long way behind, relatively speaking. In Andalusia this rush for buildable plots coincides with the hunt by constructors and promotors of new off plan projects – such as The Pier. This is a new off plan development in Sotogrande Port by a famous UK company with a stalwart reputation. Nationwide, 18.2% of properties sold were new builds – a clear indicator of the confidence returning to this sector.

property sales June 18 Andalusia

Rustic Property Conveyances Andalusia

The number of rustic properties transferred to new owners reached 4,650 in Andalusia. For the second consecutive month there was a high acceptance of inherited property in Andalusia. As commented last month, this will be heavily influenced by the relaxed rules on taxation of inheritances when between close blood relations. Per stirpes succession laws operate for intestate estates in Andalusia and throughout Spain. So, 1,727 inherited rustic properties were claimed and this amounts to almost 40% of the total for Andalusia. This compares with 1,850 sold on the open market which is a healthy balance to guarantee a fluid property market. The nationwide figures for sales of rustic properties were around 35% so sales for Andalusia were above average. This is not hard to understand when we see properties such as this, with a quarter hectare, 2 beds 1 bath on sale for only 190,000€ There is real value to be had there.

property sales June 18 Andalusia

Urban Residential and Commercial Andalusia

Looking now at urban properties, it is clear that this pattern repeats itself with healthy property market sales. More than half of the property transmissions, residential and commercial, were on the open market with 14,745 out of a total of 25,706 in Andalusia. There is healthy interest in investment opportunities such as land and property to convert to rest homes. This offering here would be ideal.

property sales June 18 Andalusia

Residential Sector Sales June 2018 Andalusia

Finally, focusing on the residential sector in Andalusia for June 2018 compared to the same month year on year. 9,165 properties were bought and sold at arms-length trading on the open market. This accounts for almost 60% of all activity and inheritances amount to around 17% There is growing interest in properties that require moderate reforms especially where they are well located in the centre of popular villages. For example this one in Jimena de la Frontera

With savings in bank accounts still not yielding investment income, it seems for those that have the ability to buy Spanish property, now would be a great time to do so.

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ventas suben mayo 2018

Land Registry Busy May 2018

Transfer of Property Rights (STPR) May 2018

  • 183,748 property transfers recorded in May 2018
  • Up almost 10% year on year compared to May 2017
  • Sales of Residential Properties up almost 5% May 2018 compared to May 2017

Spain Official Figures May 2018

These are the official figures released by the Spanish National Statistics Office with reference to the Property Market in Spain. Sales nationwide account for 93,366.

Property Transfers May 2018 Spain

 

Less Properties Sold May 2018

The property boom has settled down with many of the bargains now snapped up. Traditionally May is a popular month for buying and selling of properties so these figures are indicative of a slowly re-emerging market where the distressed sales are now dissipating. There are still bargains to be had, but fewer than the same time last year. These figures reflect that reality.

Statistics on May 2018 Property Rights

Andalusia Figures May 2018

In Andalusia in May 2018, a total of 32,761 property titles changed hands.  This shows an increase of almost 20% which is double the national average. It is important to note that not all of these were property sales. Conveyance sales also showed an increase year on year in Andalusia of almost 5% with 47,177 properties acquired by notarised title deeds.

Property Sales May 2018

 

Rustic and Urban Sales May 2018 Andalusia

As can be seen from the tables below, 5,261 rustic residences changed hands as well as 17,104 urban homes in the autonomous community of Andalusia. Of these, 2,145 rural properties were bought and sold compared to 14,925 urban dwellings.

Property Sales May 2018

 

Property Sales May 2018

 

Property Sales May 2018

 

Beneficiaries Claim Properties Inherited in Andalusia

the Inheritance Laws changed in Andalusia with more generous allowances based on personal income. this could well account for the higher than habitual number of beneficiaries claiming their inheritance. In previous years it has not always been worthwhile paying the taxes levied against the bequeathed property. Roughly 25% of the conveyances have been bequests compared to purchases.

 

Property Sales May 2018

In summary, sales of properties in Andalusia are continuing at a relaxed pace and have fallen off slightly from the same time last year as a probable result of bargain properties being scooped up. there are still bargains out there, especially in rural areas where properties with minor reforms required could yield great deals in the short to medium term.

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Housing Sales Rise in Andalusia amidst Buoyant GDP figures for Europe.

Housing Sales Rise in Andalusia.

Andalusia came second in sales increases for November according to the Spanish Institute for National Statistics. INE. This is because house prices are extremely inviting and it is a lovely place to live or come to for holidays. Property prices are still lower than what they should be. Take advantage now.

Winners and Losers

The Autonomous Communities that registered the greatest annual increases in the number of housing sales in November were Aragón (24.7%), Andalusia (24.3%) and Castilla–La Mancha (23.7%). In comparison, Extremadura (–9.7%), País Vasco (–1.3%) and Asturias (3.5%) registered the lowest annual rates in November.

 

 

GDP grew by 2.5% across Europe

In Europe the fourth quarter of 2017 shows GDP up by 0.6% in both the euro area and the EU28 up +2.7% and +2.6% respectively compared with the fourth quarter of 2016.

Seasonally adjusted GDP rose by 0.6% in both the euro area (EA19) and in the EU28 during the fourth quarter of 2017, compared with the previous quarter, according to a preliminary flash estimate published by Eurostat, the statistical office of the European Union.

In the third quarter of 2017, GDP had grown by 0.7% in both zones. Compared with the same quarter of the previous year, seasonally adjusted GDP rose by 2.7% in the euro area and by 2.6% in the EU28 in the fourth quarter of 2017, after +2.8% in both zones in the previous quarter.

Over the whole year 2017, GDP grew by 2.5% in both zones.


GDP and Property Prices Rise

Residential property price indices (RPPIs) directly and indirectly influence economic policy.

From an individual household’s perspective, real estate often represents the single largest investment in their portfolio. It also accounts for the largest share of wealth in most nations’ balance sheets. We do not need to be told how changes in house prices can have far-reaching implications for individuals.

House prices influence home improvement and renovations expenditures and there are property bargains out there to buy and reform. Even some minor reforms can significantly increase the value of the property.

Understanding Supply and Demand

House prices also influence the decision to build new houses (the supply side) as well as the decision to become a homeowner (the demand side). Investors turn to house price indices to measure wealth and to help assess current and future rates of return.

From a broader perspective, analysts, policymakers, and financial institutions follow trends in house prices to expand their understanding of real estate and credit market conditions as well as to monitor the impact on economic activity, and financial stability and soundness. For instance, mortgage lenders will use information on house price inflation to gauge default risk. Central banks often rely on movements in house price indices to monitor households’ borrowing capacity and debt burden and their effects on aggregate consumption.

It is still a buyer’s market in property in Andalusia, but, to quote Bob Dylan,  times they are a changing . . . which is great news for those owners trying to sell their properties.

For those looking to buy, invest now or spend more later.

For those looking to sell, it could be that your property is on the market at a price which undervalues it.

Get in touch with us to arrange a tour of properties or to get a valuation of your property with a view to selling it.

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Property Prices Slowly Rise

Property Prices Slowly Rise in Spain

Andalusia once more posting strong results as property prices continue to rise in Spain.

Good news from the Institute of National Statistics for Spain (INE) – the property market continues to bounce back. House prices continue to rise albeit slowly. Andalusia strong in new builds and climbing steadily in Resales. The first quarter of 2016 is still the highest average figure for sales, notwithstanding, the Real estate Market is moving again. If you are considering buying a property, now is the time to commit, before prices rise even higher. Those of you thinking about selling, the average time for sale of a property is approximately 9 months – beat the trends and list with us!

HPI – SECOND QUARTER 2017

  • Housing prices are up two points over the previous quarter.

Annual evolution of housing prices

  • The annual variation of the Housing Price Index (IPV) in the second quarter of 2017 increased by three tenths and stands at 5.6%.
  • By type of housing, the annual rate of new housing prices is 4.4%, more than one point lower than the previous quarter, with consistent growth in property sales for Andalusia.
  • Meanwhile, the annual variation of Resale housing rose by half a point, to 5.8%.

Property Prices Slowly Rise

Quarterly evolution of housing prices

  • The quarterly variation of the general HPI in the second quarter of 2017 is 2.0%.
  • By type of housing, new housing prices rose 2.6% between the first and second quarters of 2017. Whilst, ‘second hand’ or ‘resale’ home prices rose 1.9%.

Property Prices Slowly Rise

Results by Autonomous Community. Annual variation rates

  • A total of eight autonomous communities increased their annual rate in the second quarter of 2017. The highest increases are recorded in the Balearic Islands, the Basque Country and Cantabria, with increases of 1.9, 1.2 and 1.1 points, respectively.
  • Andalusia is up 0.3 points over the last quarter.
  • In contrast, the greatest decreases of the annual variation occur in Aragon, Principality of Asturias and Castile and Leon, with declines of 2.1, 1.7 and 1.0 points, respectively.

Annual HPI Rates Second Quarter 2017

Property Prices Slowly Rise

Results by Autonomous Community. Quarterly variation rates

  • Most of the Autonomous Communities have positive quarterly rates in the second quarter of 2017.
  • Community of Madrid, Cantabria, Basque Country and Catalonia recorded the highest increases (of 3.4%, 3.2%, 2.9% and 2.9%, respectively).
  • Andalusia once more posted a strong quarterly variation rate of 1.6%
  • For their part, Principado de Asturias (-1.0%) and Extremadura (-0.2%) are the only communities with negative quarterly variations.

Property Prices Slowly Rise

 

These statistics are taken direct from INE’s Press Release dated 8 Sept 2017.

If you are thinking of re-entering the property market in Andalusia as either a Buyer or Seller and are in the provinces of Cadiz or Malaga, get in touch to see how we can help.

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