We’ve decided to get stuck into the serious nitty gritty of buying a property in Spain this month and this newsletter is brimming with tips on the buying process, Aftersales and even building your own home. They say knowledge is power and we’d rather all of our clients knew all the facts before they parted with their hard earned cash. Next month we’ll delve into the realms of taxation in Spain, but if you feel there’s anything we’ve missed just drop me a line on adam@duchyspain.com Now put that kettle on and have a good read... Adam Gale, Managing Director, Duchy Estates Click the headlines to read more... Duchy Estates Aftersales Department Put us at número uno in your speed-dial. Buying in Spain a step-by-step guide from the experts, law firm Martínez-Echevarría, Pérez y Ferrero Abogados. Duchy Estates’ Favourite Five From beachfront bliss to golfing heaven, all for less than 400,000 euros. Finca Cortesín a magnificent Andalusian country-club style golf resort. The Duchy Estates Team More names to remember. Build Your Own Why go off the peg when you can have bespoke? Duchy Estates Aftersales Department There’s no doubt that the Spanish can be a quirky bunch, particularly when it comes to official business. Many a foreigner has looked for the nearest brick wall to head-butt when battling with the stifling bureaucracy. Official offices may only open for a few hours on certain days, have intolerable queues, change the rules on what paperwork you need at whim, rarely lend you a pen, never photocopy but ask you to fill things in twice and certainly claim ignorance if you attempt to speak anything other than Spanish. The laid-back mañana syndrome is not a fallacy, it’s very much alive and kicking. This is why Duchy Estates’ Aftersales Department will undoubtedly become number one in your speed-dial. With Duchy Estates’ experienced Sales Team, finding the ideal holiday home or property investment is likely to be the easy part; the headaches can start when you’re nearing completion. Unfortunately most estate agents consider you to be 'old news' once they have your deposit and therefore their commission, at Duchy Estates however, we see this as just the beginning of an ongoing relationship. Our Aftersales service starts by providing you with photographic and written updates about your property. This is especially useful if you have purchased a unit off-plan that won't be ready for a year or so, thus saving you the time and cost of flying back and forth. Next, there are a number of tasks that need to be undertaken prior to completion namely securing an NIE number (mandatory for tax purposes) and dependent on requirements maybe visiting a mortgage broker, signing over power of attorney to your lawyer at a notary and perhaps a site visit to your property to discuss furnishing options. Duchy Estates can plan an itinerary in advance, guide you through each of these tasks and arrange both airport transfers and hotel accommodation should you wish. Once the title deeds bear your name the real work starts. Without an understanding of the language or those infamous Spanish systems, seemingly simple tasks such as connecting to utilities, reporting 'snags' to the developer, arranging contents insurance and finding competitive quotes for any additional work, can become troublesome. Duchy Estates is all too aware of this, all of us have been through it ourselves, and this is where the support of the Aftersales Department will become invaluable. The array of services on hand for you through Duchy Estates is unlimited. Our bilingual staff can negotiate favourable pricing for furniture packs, satellite television connection, air-conditioning, alarms and so on. An annual maintenance package is also available to include regular checks, key-holding and pre-stay spring cleaning etc. For those that wish to make a permanent move, Duchy Estates can take things a step further and assist in finding schooling for the children, guide you through the bureaucracy of applying for residence and recommend private healthcare schemes. From the simplest translation of a letter to the most complicated home cinema installation, our Aftersales Department is at your service. Contact Aftersales Manager Lara Demkes now on 00 34 952 906 944 or email lara@duchyspain.com Buying in Spain a) Purchase to developer (new property) - A reservation document is drawn up, which confirms the buying price and sets a deadline for signing of the private purchase contract. A nominal sum of 3.000 - 6.000 euros reserves the property and takes it off the market for a period of at least 30 days, although the latter is subject to agreement. - Signing of the private purchase contract normally takes place 30 days after reservation. All relevant elements of the transaction are confirmed herein. These include: the naming of the purchaser and vendor, identification of the property, the agreed purchase price, form of payment, consequences for non fulfilment of contract by either party, date of completion of the building works and delivery of the property, agreement for payment of expenses inherent to the purchase transaction and stipulation of guarantees from the developers relating to payments made on account. At this stage the structure of regular payments is set out and agreed upon. - The public title deed transfers ownership to the purchaser once the property has been completed and full payment has been made. b) Buying a resale property - A reservation document is drawn up, which confirms the buying price and sets a deadline for signing of the private purchase contract. A nominal sum of 3.000 - 6.000 euros reserves the property and takes it off the market for a period of at least one week, although the latter is subject to agreement. - The private purchase contract is normally signed 30 days after reservation. All relevant elements of the transaction are confirmed herein. These include: the naming of the purchaser and vendor, identification of the property, the agreed purchase price and form of payment- at this stage a 10% deposit is required. - The public title deed of purchase is signed before a notary within a period of 30 or 45 days from the date of the private contract, and ownership transfers to the purchase upon the payment of the balance of the price. EXPENSES ARISING FROM THE PURCHASE PROCESS These expenses and taxes will become due at signing: a) Notarial fees. b) Transfer taxes. c) The Municipal tax on the increase of land value or the municipal “Plus Valía” tax. d) Fees for registration in the Land Registry. The notary fees for preparing and signing the deed of sale are determined by the scale of fees approved by the appropriate Notary Bar. These fees refer firstly to the basic notary deed and secondly to the issuing of the first authorised copy of same. In line with what is provided for by section 1,455 of the Civil Code, the fees corresponding to the basic deed are payable by the vendor and those for the copy are payable by the purchaser, unless otherwise agreed. This agreement is legally permitted and is normal practice and it is therefore usually the purchaser who pays the full amount of the fees. Normally, the cost of the basic notary deed is 85 or 90 per cent of the fees charged by the Notary. The Transfer Tax, which is ALWAYS payable by the purchaser, can be specified in two different tax figures - Value Added Tax (VAT) or the Transfer Tax (ITP) and Stamp Duty (AJD). The purchaser has to pay the VAT in those transactions where the vendor of the property is considered a Business Developer, who has to pay VAT, and/or it is the first time that the property is being transferred. The VAT applicable will depend on the nature of the property being transferred, as detailed below: Dwelling-houses............................................ 7% Unbuilt plots of land....................................... 16% Commercial premises.................................... 16% Garage parking space and storerooms............ 16% or 7% The acquisition of garage parking spaces and storerooms is a taxable event with 16% VAT when they are conveyed separately from a dwelling-house, while the applicable VAT will be a 7% when transferred at the same time and in the same title deed in which a dwellinghouse is transferred to the same purchaser. In all instances where VAT is payable, the purchaser must also pay Stamp Duty (AJD), whose tax rate is 1%, unless the purchaser is under 35 years old, the property acquired is designed to be the usual residence and the value thereof does not exceed 130,000 euros (Law 10/2002, of 21st December of the Autonomous Region of Andalucía, whereby norms on the subject of assigned taxes and other tax, administrative and financial measures are approved). Both the VAT and the Stamp Duty are applicable on the price declared in the public deed of sale. Whilst the VAT will be passed onto the purchaser by the vendor, the latter paying the former the amount due at the moment of the signing of the deeds together with the sale price, on the other hand the Stamp Duty (AJD), must be paid by the purchaser to the Spanish Treasury in a maximum period of 30 working days, which are counted as from the day after the signing of the public deed of sale. In all the cases where the vendor cannot charge the VAT to the purchaser, i.e. in all cases where the vendor is a private person (not a business developer), being either a resident or non-resident of Spain, or when dealing with cases that are a second transfer, the Transfer Tax payable by the purchaser is the ITP (Transfer Tax), at the rate of 7% of the sale price declared in the deed, unless the purchaser is under 35 years old, the property acquired is designed to be the usual residence, and the value thereof does not exceed 130,000 euros, in which case the tax rate will be the 3.5 % (Law 10/2002, of 21st December of the Autonomous Region of Andalucía, whereby norms on the subject of assigned taxes and other tax, administrative and financial measures are approved); and which will be paid by the Purchaser to the Spanish Treasury, within the aforesaid time limit of 30 days. In calculating these 30 days one excludes only Sundays and bank holidays. CONSUMER’S GUARANTEES Of the many components of the legal framework that regulates the Spanish real estate sector the following are of particular interest: Guarantee of the amounts paid by the purchasers during the construction by means of bank guarantees or insurance policies. One-year period insurance guarantee against defaults and minor repairs once the property is completed. Three-year period insurance guarantee for proper functioning of technical installations. Ten-year insurance as guarantee for structural defects. See www.martinezechevarria.com for more information and see next month’s newsletter for their guide to taxation. Duchy Estates’ Favourite Five Beachfront Bliss – this two bedroom two bathroom apartment occupies an enviable beachfront location with nothing between it and the splashing waves below. Just to the west of Estepona, this development is renowned for its vast terraces with phenomenal sea views as well as exceptional standards of construction and finish including Bosch appliances and Porriño granite worktops. A large swimming pool and putting green set in colourful gardens with direct access to the beach complete the picture. 395,000 euros. Sunny Spot – a large three bedroom two bathroom apartment sited between Estepona and Marbella and close to shops and a selection of restaurants. The bright south facing lounge opens onto a cosy sunshinefilled terrace taking in some of the best views on the complex. Two large swimming pools and lovingly maintained gardens round off this keenly priced package. 299,000 euros. Golfing Heaven – south facing two bedroom two bathroom garden apartment within one of the most sought-after residential communities on the Costa del Sol, La Quinta Golf. The property is finished to a superior standard with cream marble floors, a fully fitted kitchen with Bosch appliances and hot and cold airconditioning. The bright terrace and private garden enjoy plenty of sunshine whilst the communal pool nestled into landscaped gardens is set against an incredible mountain backdrop. 360,000 euros. Sporting Excellence – a brand new luxurious ground floor two bedroom two bathroom apartment within a few minutes’ stroll of the beach and close to the chic resort of Puerto Banús. Inside the home boasts every creature comfort, outside the resort has infinite appeal for sporty types from communal swimming pools and gymnasium to tennis courts and a lavish outdoor Jacuzzi. 300,000 euros. Private Health Club – close to the beach on Marbella’s New Golden Mile, this two bedroom two bathroom apartment is in a contemporary project with stylish glass balconies and bright sea views. Well appointed with granite worktops and marble flooring, the community also boasts an outdoor swimming pool and sumptuous indoor health club with heated pool, gymnasium, sauna, Jacuzzi and his ‘n’ hers changing facilities. 395,000 euros. Finca Cortesín Finca Cortesín is a magnificent estate of over 200 hectares and set to be one of the most coveted resorts of the Costa del Sol. The development comprises detached villas on 2,000m2 plots, luxury apartments and penthouses and boutique hotel suites all set within a multi-faceted golf resort. Finca Cortesín features a championship standard 18-hole Cabell Robinson designed golf course together with a Jack Nicklaus Golf Academy with driving range, practice greens and state-of-the-art golf simulator, both recently opened in October 2006. At 7,000 metres, the par 72 is one of the longest in Europe and the golf Clubhouse itself is also noteworthy, a 1,200m2 mansion with five metre high ceilings, exposed wooden beams and Travertine marble floors. The resort will also feature a five star hotel, Gran Hotel Cortesín, run by the Stein Group (already responsible for the management of some of Europe's most distinctive luxury boutique hotels in locations such as Monaco, Italy and the Balearics), plus a luxurious Spa, gymnasium, tennis courts, indoor and outdoor pools and exclusive shops and restaurants. In fact, the shopping area located on the fringes of Finca Cortesín is under the design control of César Leyva and will share similarities with the world-famous Marbella Club Hotel. Uniquely, all of these commercial facilities will be in place before even the first property is completed. The hotel, with 60 one and two bedroom suites, will be open by the end of 2007 and represents a safe investment as the Stein Group will manage rentals of the suites whilst the owner is absent. Alanda Cortesín consists of just 45 spacious two and three bedroom apartments and penthouses built in Mediterranean style over four blocks. With large sun terraces, the properties have stunning golf and sea views, meanwhile interiors are bright and contemporary with clean lines, open plan kitchens and strong use of natural materials such as marble, stone and wood. Top brand fittings, appliances and sanitary ware will be found in the kitchens and bathrooms. The development will also incorporate video entry system, two communal swimming pools, landscaped gardens and underground parking / storage. Set in the district of Casares, a privileged elevated location halfway between Marbella and Sotogrande, Finca Cortesín offers superb views of the Mediterranean and the North African coastline and is just 1.5km from golden sandy beaches. The entire 200 hectare resort is gated, with a single entrance/exit, and enjoys 24 hour security plus a range of on-site services from gardening and maintenance to housekeeping and rentals. Prices start from 388,978 euros for a two bedroom two bathroom first floor apartment. Contact Duchy Estates now for further information on 00 34 952 906 944 or email spain@duchyspain.com The Duchy Estates Team - More Names to Remember We’ve gone for ‘new’ and ‘old’ this month introducing both a fresh face for the team and someone who has been with us more than a year, but deserves recognition for his key role in the business. Customer Service Supervisor Daniel Zartash-Lloyd was born and raised in Cambridge and only moved to the Costa del Sol just a few weeks prior to joining the Duchy Estates payroll, however he’s no stranger to Spain and certainly no stranger to Customer Service. Daniel was Sales Team Manager for Dataforce, the UK’s leading marketing services provider, for three years before being poached by one of his property investment clients to work in-house. However, inspired by his parents who run a boutique hotel in an Andalusian mountain pueblo, Daniel opted to make that move to Spain. With extensive experience in the property investment market, Daniel is an instant asset for Duchy Estates. Daniel can be contacted directly by email daniel@duchyspain.com or via phone 00 34 952 906 944. Jacob Vogh has been with Duchy Estates for little over a year in the vital role of Valuations & Listings. The Dane from Copenhagen cut his teeth as a freelance photographer and assistant in the demanding and fickle world of fashion but ten years ago Jacob fancied a change of scenery and flew to Marbella. He continued his camera work although this time snapping bricks and mortar as opposed to leggy models. Duchy Estates has provided Jacob with a stable role after years of freelancing and he enjoys his days out and about nosing at Marbella’s finest properties. Jacob can be contacted directly by email jacob@duchyspain.com or via phone 00 34 952 906 944. Build Your Own Modern society is going bespoke. Tailor made holidays, tailor made clothes, so why not a tailor made home? Land values are pretty exorbitant in northern Europe, and in countries such as the UK development land is in short supply, but in southern Spain some prime countryside and coastal plots are still available for affordable self-build projects. Of course self-build rings some alarm bells for those who have always bought their homes off the peg, but that is why Duchy Estates has an in-house Project Management facility to make sure that your home grows from foundations to furnishings without a hitch. Duchy Estates MD Adam Gale comments, “The number of people wanting to create their dream home from scratch has grown over recent years and we’re now able to oversee the sourcing of the land right through to handing over the keys. Clients can mark their personality on the layout, architecture, landscaping, flooring, you name it, and the sense of achievement when you see the fruits of your own imagination is priceless. Price is also another factor as self-build carries an enormous cost saving as you’re not having to top-up a developer’s profit margins.” The Duchy Estates Project Management facility has two main goals, to make sure that your home adheres to ‘best practice’ and is delivered ‘on time and within budget’. Best practice encompasses everything from topographical surveys and health and safety on site to securing planning permission and tough quality control. On time and on budget is self-explanatory, but requires intelligent contractor selection, regular site meetings and a tight grip on the cashflow from client to suppliers. Attempting to assemble your own crack team of architects, builders and plasterers would undoubtedly be a costly mistake without an experienced, bilingual Project Manager at the helm used to Spanish working practices and the workings of the local authority planning departments. Duchy Estates currently has several villa projects underway and we would be happy to discuss your hopes and budgets to see if we can create your ideal home. Email spain@duchyspain.com or telephone 00 34 952 906 944. It’s not long now until the Christmas Lights get ceremoniously switched on in London’s Oxford Street on 7 November and everyone begins that mad, panic countdown to the big day. Why not save the biggest present for yourself this year and buy yourself the perfect retreat to spend Christmas in the Spanish sunshine. Visit Research Trips and book a trip to come and see us... Adam Gale, Managing Director. Contact Duchy Estates by phone 00 34 952 906 944 or email spain@duchyspain.com or visit our website www.duchyestates.co.uk for further information.