British and other foreign vendors on the Costa Blanca are being urged to familiarise themselves with the local conveyancing process as well as the implications of being a non-resident seller, to benefit fully from the growing resurgence of foreign buyers in Spain.
The percentage of Spanish property sales to foreigners doubled between 2012 and 2011, according to recent figures from Spain’s College of Property Registrars, which also revealed that 33% of all property sales in the Alicante province last year were to foreigners.
Kieran Byrne, MD of HomeEspaña: “Our market is at the very least a European one, but it’s increasingly international. For a foreigner, selling a Spanish property, whether it’s a primary residence or holiday home, comes with different considerations to the ones you would have when selling your primary residence, for example, in the UK. For starters, there’s a high chance your property will attract non-resident buyers, especially as foreign buyers constitute such a significant portion of the market on the Costa Blanca. Then, for example, you have to think about currency and repatriating funds.”
HomeEspaña has compiled a five-point checklist for anyone planning to put a Spanish home on the market:
1 Be realistic about price, especially if you want a quick sale, and remember that as a private vendor, your property could be competing with bank repossessions on price and finance availability. Anticipate completion to take 6-8 weeks from the point of accepting an offer, however if you have a cash buyer who is happy with the paperwork, you could have a sale wrapped up within two weeks. If you are resident in the UK, it’s likely you’ll need to make a trip to the Costa Blanca, not least to be at the notary’s for completion if you haven’t granted power of attorney. Try to remain available to make a trip out to Spain if it means keeping a sale opportunity alive.
2 Agency fees in Spain vary, depending on the estate agency. It could be an agreed rate of commission paid on the purchase price, sometimes also by the buyer. Another typical model is an estate agency agreeing to achieve a certain price for a vendor and then adding their fees to that price when they advertise the property. For example, as a vendor wanting 100,000 euros from the sale of your property, you might see it advertised for 105,000-110,000 euros – the difference is your agent’s fee. So long as all parties are aware of the fee structure, including the buyer, there should be no disagreements.
3 Usually, it’s best to include all furniture and appliances in the sale of your property, unless you are a resident on the Costa Blanca and moving into an unfurnished home nearby. Even if you are moving back to the UK, the cost of bringing things with you, and possibly having to store them, isn’t usually worth it.
4 Don’t waste money unnecessarily when repatriating the proceeds of your property sale to the UK. Too many vendors are not aware of the hidden costs that come with transferring money to a UK bank from a Spanish one, until it’s too late. For starters, just paying the banker’s draft from your buyer into a Spanish bank account usually incurs a charge, typically 100-200 euros. Once the draft has cleared, asking your Spanish bank to exchange the euros into pounds and deposit them in your UK bank account will mean you get stung again – firstly, by a transfer fee, typically around 1% of the value of the transaction, then by a poor exchange rate.
“Fortunately, you can eliminate these unfair extra costs,” said Kieran Byrne of HomeEspaña. “Part of the after sales service we offer our vendors is showing them the cheapest – and safest – way to repatriate funds to the UK. We work with a specialist currency firm that has a partnership with a Spanish bank that is able to waive most, if not all, of the usual fees associated with currency transfers. The currency firm then provides very competitive exchange rates when exchanging and depositing clients’ money back in the UK.”
5 Be mindful of any fees and capital gains tax that will be deducted from the proceeds of your sale. Even if no capital gains tax is owed, as a non-resident vendor your notary will take a 3% withholding tax, which can be reclaimed using a tax representative in Spain.
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