Frequently Asked Questions

A building survey, as it is understood in the U.K., is not necessary in Spain for mortgage purposes. It is nonetheless advisable when purchasing an older property. Common things to check for are the condition of the plumbing and electrical installations, waterproofing, roofing, and so on. These checks, as well as a full structural survey, can be carried out by a Spanish technical architect (aparejador) or indeed by a qualified British Chartered Surveyor. Any fees involved would be to the account of the prospective purchaser.

Spanish banks are highly competitive when offering mortgages on both new properties and resale properties. It is now common practice for most Spanish banks to offer mortgages to non-residents, although some banks do offer a wider variety of financing packages than others. Common terms offered are mortgages from 5 to 15 years, often of up to 70% of the purchase price, at around 1 point over current EURIBOR rates. The applicant must of course qualify for the loan, especially from the standpoint of having sufficient income to afford the monthly payments, and the bank must appraise the property value. The appraised value, generally speaking, coincides with the market value of the property.

A foreigner who is a non-resident of Spain has the right to sell his property to another non-resident foreigner entirely in foreign currency, with payment made outside of Spain. It should be noted that, since 1997, a 5% tax retention is effected by the tax authorities upon the sale of any property owned by a non-resident vendor, which is applied towards the capital gains tax (currently 18%). The profit on the sale is reduced by a small percentage for each year of ownership in compensation for inflation. If the amount withheld is greater than the tax due, it can be reclaimed in part from the tax office. Those sellers today who have owned their property prior to 1986 currently pay no capital gains tax on a sale.

The seller always pays agency fees.

It is the duty of the client or his lawyer to settle these bills via direct debit.

An urbanization is a planned community which has met the standards of the various governmental agencies with respect of the use of the land (residential, commercial, sports area, green zones), and to providing a specific set of services and a minimum level of quality in the construction of roads, sidewalks, drainage, sewage systems, electricity and water installations, and so on. Obtaining permission to develop land into an urbanization can take a developer up to several years and several million euros of expense. The most obvious advantage to the owner of a property within an urbanization is the fact that the land usage is strictly controlled. If one decides to build a house on a plot in a section of an urbanization zoned exclusively for single family dwellings, you are assured by law that neither an apartment block nor a rabbit farm can be located on the adjacent single family plot!

There are several zoning classifications for rural land outside of urbanizations. Marbella is in the process of updating its master plan, and great care should be exercised in purchasing land outside of an urbanization: under most circumstances, one may not be able to build upon land which is not within an urbanization.

In addition to the annual Impuesto sobre Bienes Inmuebles or IBI (the equivalent of Rates) paid on all property to the Town Hall, non-residents must pay a WEALTH TAX (impuesto de patrimonio) on their assets in Spain. The amount of tax is determined based on the individual wealth. The cost price of the property is usually the basis for the calculation of the tax.

Here are two examples on how to use the tax table below:

If you have assets in Spain of €150.000/£93,000 you simply multiply this amount by 0.2% and find that the tax is €300/£186.

If you have assets, of, let us say, €240,405, the calculation is the following:

On the first €163,848, you pay the fixed amount of €328.

On the difference up to the total amount of your assets (€240,405), that is €76,557, you apply 0.3%, that is, €230. Added to the fixed payment, your total tax payment for wealth will be €558.

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assets €	Fixed Payment €	Rest upto €	% on surplus
0	0	163,848	0.2
163,846	328	163,848	0.3
327,696	821	327,696	0.5
655,392	2,458	655,392	0.9
1,310,206	8,356	1,310,783	1.3
2,621,567	25,396	2,621,567	1.7
5,243,133	69,963	5,243,133	2.1
10,486,267	180,069	whatever	2.5

Non residents are wise to appoint a fiscal representative to handle all tax matters relating to ones assets in Spain. Official notifications regarding your property will be delivered to your fiscal representative, which is highly advantageous to the foreign owner as it protects an owner from having his orher assets repossessed by the Inland Revenue due to non-payment of taxes, for example. In previous years, there were cases of non-residents coming to Spain only to find their properties had been embargoed and even sold over, all due to the fact that the owner had been officially notified at a local address and found to be absent! To contract a fiscal representative one need look no further than one's own lawyer who will refer you to his own tax consultant.

Non residents who use their property themselves must also file for Income Tax and must pay tax for any income received in Spain at the flat rate of 24% (including real estate rental income) even if the income was received abroad. Every non-resident is assessed on income tax even if there is no real income (on the theory of derived benefit) at 24% of 1.1% of the rateable value of the property value (valor catastral), which is generally a fraction of a property's market value. This tax is not applicable if the owner is leasing the property to third parties, but it is applicable with respect to the rental income received, which is taxable at 24%.

Upon the sale of real estate (when the seller is a non-resident), there is an automatic tax retention of 3% of the sales price, payable against a 20% capital gains tax. If the seller is a resident in Spain, he must of course file Income Tax and declare the income he received regardless of source.

The amount to pay will be 20% of the first 6000 Euros, 22% of the following part between 6000 and 50000 Euros and 24% of the rest. For tax purposes, one is considered a FISCAL RESIDENT if one resides in Spain over 183 days per calendar year, regardless of whether one is officially resident or not.

Europeans from the E.U. can stay in Spain indefinitely. Visas are not required for some other countries such as the United States, but are still required in other cases, depending on one's country of origin, and with varying lengths of stay permitted.

There are several international schools in the area, including one in the Sotogrande area which provides weekly boarding facilities. Pupils are taught in English, and a choice of curriculum is offered between G.C.S.E.s and A-Levels, and the International Baccalaureate, the latter placing an emphasis on course work over exam results. For further information, check out the below links to nearby schools:

• Aloha College
• Swans School
• Calpe School
• Colegio Las Chapas
• St. Antony's College
• English International College
• Laude

All classes are naturally conducted in Spanish, the age at which a child can be expected to cope with a change ofLanguage and of curriculum should be taken into account. The younger the child, the easier they will pick up theLanguage. Most under-12s can become fluent in Spanish in 3 or 4 months.

Spanish state schools are based on the Baccalaureate system. Any pupil whose year's work is considered to be inadequate is relegated to stay in the same class for a further year and repeat the curriculum. In general, very goodresults are achieved, with a high percentage of pupils going on to University.

However, as all classes are naturally conducted in Spanish, the age at which a child can be expected to cope with a change of language and of curriculum should be taken into account. The younger the child, the easier they will pick up the language. Most under-12s can become fluent in Spanish in 3 or 4 months.

Marbella has the newest, most modern and well-equipped Regional Hospitalin Spain (Hospital Costa del Sol), in addition to a good, well-equipped Clinic with a substantial selection of general practitioners and specialists.

Private medical insurance is available through various groups such as SANITAS or DKV. This can cost about €65/£46 per person per month, depending on their age and the state of their health. Spain's social security system now allows E.U. residents access to the health network via a special form (E-101). For residents who are self-employed, own a company, or are employees, your social security contributions automatically entitle access to the Spanish health network.