1. THE PRIVATE CONTRACT

Initially, a suitable COMPLETION DATE will be agreed with both parties. The date will be fixed and inserted in a Reserve Contract. All details relevant to the property will be included in the contract, i.e. description, price, form of payment, etc. Your Estate Agent or Lawyer will establish whether you may wish to complete the transaction with Notarised Powers of Attorney. Contracts will be drawn up and given to you, your Estate Agent , or your legal advisor. On signing of the Reserve Contract, a deposit of 6.000 € will be required. A final purchase/sale contract will then be drawn up between the Developer and Purchaser reflecting all conditions and payment details including mortgage terms, if apllicable. This contract to be signed within a period of thirty days.

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2. SEARCHES AND ENQUIRIES

During the period of the Reserve Contract and prior to the signing of the final purchase/sale contract, it is necessary to have the contract checked out by your legal advisor or agent, who will obtain a "NOTA SIMPLE" to ensure that the Developer is the registered owner of the land, by carrying out a search at the local Deed Registry, and will ensure that all taxes have been paid, that all licenses have been issued, and that clear title exists.

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3. BANK ACCOUNTS

For foreign purchasers there are two basic types of bank accounts available:

NON-RESIDENT EURO ACCOUNT - If you are likely to eventually earn Euros, through letting or some other form of modest activity, you can pay Euros into this account. Upon completion of the property on-going running expenses can be paid using this type of account.

FOREIGN CURRENCY DEPOSIT ACCOUNT - These accounts are for the deposit of foreign currency in it's existing state without conversion to Euros. The funds are therefore freely convertible into other foreign currency and are outside the Spanish Exchange Control regulations. Interest rates vary from one currency to another. It is recommended that an account in Spain be opened at the earliest opportunity. Accounts in Spain can effect deposits and withdrawals from abroad without limit.

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4. MORTGAGES

Purchasing a property in Hoya de La Mora is made easy with the pre-arranged mortgages available from the La Caixa Bank in Salobreña (Granada). Multi-lingual staff are available in their branch to explain all aspects of their loans. We have negotiated an 80% mortgage facility for Spanish nationals and foreign residents and 70% for non-resident.

Please see our prices and payment plan:

Phase One - Terraced Town Houses
Phase Two - Detached Villas.

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5. MAKING PAYMENT

Full payment is required before the title deed can be transferred into your name. Ensure that when transferring money to Spain the funds arrive in enough time to enable the transaction to take place on the agreed date. When buying a property under construction, follow the payment schedule in the contract, according to the stage reached. Purchasers will be advised when stage payments become due and will receive a written communication and an architects certificate confirming the stage reached. When buying a new property in foreign currency you must ensure that all payments are registered through your Spanish bank, in order that the funds can be repatriated upon the eventual resale.

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6. SIGNING OF DEEDS

On final completion of the property, the next stage is to complete the purchase at the Notary's office, where the Escritura (title deed) will be signed. A number of purchase costs and taxes now need to be paid:

PROPERTY REGISTRY FEES
Your Escritura de Compraventa must be registered with the Spanish property registry to make it Escritura Publica and fully install your title to the property. The fees are based on the official registered value of the property, which are now much higher than in the past but often below the actual market value. The length and complexity of the deed and other factors are also considered. These fees do not normally exceed 0.2% of the registered value.

NOTARIAL FEES
These are collected by the Notary for preparing the title deed and presiding over it's signing. His/her fee is on a set scale according to the property value. Allow 0.2 - 0.3%.

PROPERTY TRANSFER TAX (I.V.A. - V.A.T.)
You must pay this tax before the escritura can be registered into your name. In the case of a new property the tax is 7% ( I.V.A.) of the registered value, (a commercial property is 16%). When buying a new property there is also an additional tax of 1% to cover "Actos Jurídicos Documentados" (A.J.D.). On second and subsequent transmissions of a property the buyer has to pay the 7% tax again but this is now called ITP: [Impuesto de Transmisiones Patrimoniales] [Transfer tax]. These percentages are based upon the value declared in the "Escritura".

"PLUS VALIA" TAX
This is a tax relating to the increase in the value of the land only, and is calculated and applied by the local town hall according to the increase in value between the present purchase and previous sale, the value or size of the building does not affect this tax. This tax will be paid for by the developer.

LAWYER'S FEES
These will depend upon the services rendered. The normal custom is for the purchaser to pay these fees and taxes. A lawyer's fees would not normally exceed 1%.

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7. TAKING POSSESSION

Handing over of the property and its keys will take place once the local town hall has issued the "first occupation license" and the FULL PURCHASE PRICE has been paid.

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8. TRANSFER OF SERVICES

Having completed the purchase it is necessary to engage or transfer services. Both electricity and water meters need to be transferred into your name. Where possible all regular bills should be paid by a direct debit "standing order" through your bank.

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9. INSURANCE

This becomes your responsibility upon POSSESSION OF THE PROPERTY. Normally, Spanish insurance companies offer a split policy, whereby the property and its contents are assessed separately. Note, that in the case of some property owner's associations, community fees may include cover of the building and/or third party risks.

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10. RATES AND TAXES

These are similar to the taxes in your own country, and become your responsibility upon completion.

LOCAL RATES
Known as I.B.I., these are payable to the town hall on an annual basis. Payment can be arranged through a local bank account or your appointed agent.

PATRIMONIO TAX
Literally translated as a "wealth tax", paid annually, it is calculated at 0.2% of the value declared in the deeds.

TAX REGISTRATION NUMBER
All property owners in Spain, whether resident or not, must obtain this number from their local tax administration office or the "foreign" department of the national Police. This number must be obtained prior to the signing of the title deeds to the property. A tax administrator or "Gestor" can deal with this task along with payment of "Patrimonio" tax.

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11. PROPERTY OWNERS ASSOCIATION

Upon completion of the entire development a residents association will be established, which administers general maintenance of zones of common ownership, such as streets, gardens, lighting, and swimming pool etc. An annual budget is calculated to cover these costs, which is divided between all owners according to the size of their properties. All rules and regulations pertinent to the urbanisation including the annual budget will be revised annually at an AGM.

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So, there you have it...

Congratulations on moving into your new home!

Guide prepared by:

Grupo Inmobiliario ESPMAR
Calle El Barrio, 53, 1º
Nerja, 29780 (Málaga),
Costa del Sol, Spain.
Tel. (00 34) 95 252 8424 / 2661
Fax: (00 34) 95 252 2661
web: www.espmar.com
Email: info@espmar.com

(NOTE. This guide, although accurate, has been kept as brief as possible. Please do not hesitate to enquire further on any point. Please note, also, that the guide is not a substitute for proper legal advice. The contents herein are correct at the time of publication. Grupo Inmobiliario Espmar cannot be held responsible for any changes in the law, or legislative practices in Spain.)

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