Buying
off-plan
Due to its high returns, this is the form of property investment currently preferred
by the majority of investors. Buying off-plan entails putting down a deposit
(usually between 25-40% of the purchasing price) on an apartment, townhouse
or
a
villa
in a carefully selected and sought-after new
development , at
the early stages of construction, and then selling on at an optimum time before
the
property in question is completed. Returns in excess of between 70-80%% have
been
realised
with this method.
Nowadays
the majority of developers have no objection to your
selling the property prior to completion, i.e. assigning
the rights and obligations under the contract of sale
to a third party, thereby recovering any moneys you
may have paid to date, including VAT, plus any potential
profit you are likely to make upon assigning the contract
(re-selling).
When
purchasing a newly built home, the lawyer will make
enquiries regarding the planning situation of the property,
to ensure that the developer has obtained proper planning
permission and a building permit in compliance with
building regulations.
Resale
investments
Bought primarily as a holiday home or full time residence, resale properties
(homes that are already built) are becoming increasingly interesting, given the
shortage
of land in prime locations. If resales have been performing well in the past,
they are expected to do even better in the future. A year-round season, with
beach visitors in the summer and golfers in the winter, produces excellent rental
yields.
Evidently,
our first advice is to employ a solicitor who specialises
in drawing conveyances, with extensive experience and
knowledge of all the legal and fiscal aspects of property
transactions in Spain. Your decision to employ a lawyer
will provide you with peace of mind and save you considerable
expense in the long run.
Once
a lawyer has been chosen we will, along with the lawyer,
guide you through the pre-contract enquiries and searches.
In broad outline these enquiries and searches would
include the following;
1. An
enquiry at the Land Registry to ensure that the person
or company selling you the property is the legitimate
owner and is entitled to sell the property. A land
charges search must also be made to reveal and adverse
entries and ensure that the property is free of charges
and encumbrances.
2. Furthermore,
enquiries must be made at the appropriate local authority
departments (urban district council
offices) to check that taxes and rates have been paid.
(Residential Property Tax, which is similar to Council
Tax, and refuse collection charges).
3. When
purchasing a property from a previous owner, the lawyer
shall ensure the vendor is up to date in payment
of condominium charges (service charges for maintenance
of the building or development), electricity, water,
telephone bills etc.
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