Is It Better To Buy or Rent Property in Spain ??

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11 Oct 2014 10:02 AM by scambuster Star rating. 144 posts Send private message

We rented an apartment on a golf course 7 years ago at only 400 euros per month and no bills, from someone who thought they had purchased it cheaply at 160k euros, originally sold for much more.

Earlier this year and having been taken back by the Bank, it re-sold for 45k euros, the owner lost his large deposit, a useless exercise. We effectively were paying his monthly outgoings, he was covering his costs with our rent.

So in this and many other cases renting was the best option by far. In that area of CDS things have not improved at all and purchasing is very much a risky business with increased community and other costs. From our point of view, the rent we paid for nearly a year was not dead money, not anything like as dead as the many Brits and others who'd purchased there and have been for sale or rent for the last 8 years and still lowering their prices or handing their keys back. Asking around why so many bought on these developments at that time, 'talked into it by unscrupulous agents/developers and believing the hype on some Spanish websites' this still continues sadly.

We take holidays in Spain when we like to different areas without worries about the property market, but our property purchases in the UK in that time have all risen in price, it's all about supply and demand and transaction costs.

Just our experiences with Spanish property.

 

 





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11 Oct 2014 5:06 PM by Hephaestus Star rating in The Peak District Na.... 1235 posts Send private message

Well at €45K it couldn't lose much more without it being free, didn't you consider buying it? indecision

 


This message was last edited by crookesey on 11/10/2014.

_______________________

I'm Spartacus, well why not?




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11 Oct 2014 6:32 PM by scambuster Star rating. 144 posts Send private message

It wasn't that price when we rented it and we had no intention of buying again in Spain, it was an extended break from Winter to see how it was in Spain for a lengthy periodno

 

So back to my view, it's safer and less expensive to rent than it is to buy with little or no investment potential, high transaction costs, and still a poor exchange rate for Brits compared to the 1.65 days which cancels out lots of the so called falls in prices. Would never buy there again but will continue pointing out pitfalls and scams that still go on, nothing much has changed apart from huge glut esceeding demand now.





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11 Oct 2014 10:56 PM by newworld Star rating. 941 posts Send private message

scambuster    Your coming a cross as a bit of a piss taker





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12 Oct 2014 9:35 AM by mariadecastro Star rating in Algeciras (Cadiz). 9348 posts Send private message

Legal Questions? Speak to Maria Direct

Rent to buy?

Legal tip 953. Purchase option and rent with purchase option in Spain 
21 May 2013 @ 16:21 
 

 
A scientific explanation of a legal figure which, again, might be a good way to go for property purchase in Spain. Option to purchase
 
AP Barcelona January 28, 2009 gives a precise definition of the purchase option:
 
"That  agreement by virtue of which one party grants to another the exclusive right to decide on the execution or not of another main  contract, to be done within a certain period and in certain conditions, which may also be accompanied by the payment of a premium by the elector, and constituting therefore its essential elements:
 
-the allowance to the elector of the unilateral decision regarding the execution of the purchase,
-the indication of the price stipulated for the future acquisition and
-the determining of the period for the exercise of the option;
 
being an "accessory" element the payment of the premium.
 
The optionor is who is unilaterally linked until the elector decides. It is governed by the general provisions on obligations and contracts except the rules that do not suit its own essence.
 
It is a preparatory contract. Among others, sentences of the Supreme Court February 14, 1997 and  May 18, 1995.
 
Therefore consists in granting the elector, by clause inserted into the urban lease, the sole authority to give consent within the period contractually stated, to the offer of sale
 
"Lease with purchase option"
 
The sentence of the Supreme Court dated July 6th, 2001, defines the lease with purchase option as the insertion of a clause by which it is fixed the sole authority to give his consent within the period contractually stated to the offer of sale, which by the primary effect of the option is binding for the promissor, who cannot takes it back during this time , and once appropriately exercised the option expires and is consummated and  the purchase agreement is automatically perfected without the possibility that the optionor or the grantor can do anything, to thwart its  effectiveness, because  it is sufficient  for the perfection of the sale with the elector, as in the discussed case has been proved , that he has communicated his will to exercise its right of option. In the same line, sentence April 3, 2006.
 
Once duly exercised the option expires and it is consummated and the purchase agreement is perfected automatically, without the owner or grantor can do anything to thwart its effectiveness, because it is enough for the perfection of the sale that his will to exercise their right of option has been communicated.
 
The price is an essential element of the sale and it is a fundamental requirement to be fixed or determinable. By contrast, the option can be by price or free. Therefore the payment of the premium is an accessory element 
 
The option right cannot be assigned by the elector in favor of third parties without the consent of the grantor. The reason for this is that it is not a true subjective right but only an authorization. The consent must be express but from a civil standpoint the tacit consent is admitted.
 
 
Beach of Chipiona, Cádiz, Southwest of Spain.
 

 

 


This message was last edited by mariadecastro on 12/10/2014.

_______________________

Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



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12 Oct 2014 9:44 AM by scambuster Star rating. 144 posts Send private message

When you come up with a banal comment like that neworld is it because what I say is affecting you in some way, maybe you have vested interest in Spain? What don't you understand about posts that warn others of scams and pitfalls?laugh





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12 Oct 2014 9:49 AM by mariadecastro Star rating in Algeciras (Cadiz). 9348 posts Send private message

Legal Questions? Speak to Maria Direct

and the related taxes for rent to buy:

Legal tip 685. Taxes in rentals with option to buy 
18 January 2012 @ 23:47 
 

 It depends on the way the contract is agreed, there is NOT just ONE formula for this type of agreements but can be tailored according to parties wishes:

-If you pay an initial amount for the option, this and rentals will be taxed with VAT 18%. Once the option is exercised, you will substract the amount paid at the beginning and will pay either transfer tax or VAT- depending on first of subsequent transmissions- at the applicable rate ( 4% or 7%)

- Same if you pay nothing at the beginning but the contract clearly stablishes that rentals will be counted as part of the price if the option is exercised.

- If the contract states that amounts are partially rent and partially will be considered part of the price. Each part will tribute correspondingly ( rentals- 18%,part of the price 4% or 7%).  If the option is not finally exercised the taxpayer will be reimbursed the amounts paid as part of the price and its corresponding taxes.

Algodonales, pueblo aceitero.

"Algodonales, pueblo aceitero", Cádiz, Spain, by maesejose, at flickr.com

 
 


_______________________

Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



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12 Oct 2014 10:01 AM by newworld Star rating. 941 posts Send private message

scambuster--Your wrong again, I have NO vested interest in Spain, apart from waiting for my 3% tax back from selling my property. Whats your story ?





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12 Oct 2014 10:20 AM by scambuster Star rating. 144 posts Send private message

What do you mean I'm wrong again, I've only answered you once? Are you wumming? As for my story, read my post it tells you my story, oh and go back to when I first started posting, you will see much more of my story from many years ago.laugh





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12 Oct 2014 2:14 PM by Hephaestus Star rating in The Peak District Na.... 1235 posts Send private message

Do you two want someone to hold your coats? cool 



_______________________

I'm Spartacus, well why not?




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12 Oct 2014 5:44 PM by Susanspain Star rating in Mijas, Malaga. 145 posts Send private message

Susanspain´s avatar

I have lived in Spain since 2000. I always rented (mainly as I could not afford a mortgage being self-employed and single.)

I then met someone (another Brit) who was coming up to retirement age and had always been a property owner. But initially we decided to rent together to see how it went ;) 

We paid Eu 6,600 pa (Plus all utility bills) for a small 1 bed finca in the campo (just inland from the Costa del Sol.) The crisis then came and the landlady refused to lower the rent depsite numerous requests. This is what then prompted us to buy. (With a bit if help from my partners youngest.) We had paid Eu33K in 5 years renting. Our modest (but ours), 1 bed town house in a medium sized inland town, and still only 15 mins from the coast only cost us Eu35k.  (Plus taxes and fees.) 

We know what we should have done earlier! (Although I admit we might have been very pushed to find a newly rennovated property at this price earlier when the market was still bouyant.) 

The daughter is the legal owner (with us as life long tennants), so she will not have a huge inheritance tax bill when the time comes. 

I think if you have cash to buy a modest place and don't over stretch yourself that it is cheaper to buy if you are intending to stay long term. (But renting to see if you like Spain first is definately a good idea as it is not for everyone.) 





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12 Oct 2014 5:59 PM by Hephaestus Star rating in The Peak District Na.... 1235 posts Send private message

Susan and her partner appear to have it nailed, unless investment interest rates go through the roof buying what you can afford is the smart option. yes



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I'm Spartacus, well why not?




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24 Nov 2014 1:00 PM by starfox Star rating. 58 posts Send private message

I would happily buy a property but in the last year of searching, negotiations and failure after failure I have come to the conclusion that it is nearly impossible to find a legal property. That isn't even half of the issues we have encountered and have found the whole process surreal.

Of course we could do what I assume most do and turn a blind eye or ignore the regulations but then that is the reason the property market is in the state it's in in this area.

In the end we gave up. We will continue to rent and save our money and look elsewhere.





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24 Nov 2014 1:13 PM by amogles Star rating in El Campello (holiday.... 170 posts Send private message

Where have you been looking that you cannot find a legal property?

There is no doubt there are plenty of illegal properties out there, but to suggest there aren't any legal ones doesn't square with my experience.

Maybe you should find a different agent?





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24 Nov 2014 1:25 PM by mariadecastro Star rating in Algeciras (Cadiz). 9348 posts Send private message

Legal Questions? Speak to Maria Direct

I agree with Amogles there are hundreds on legal properties in Spain.

Where have you been looking at?

Cheers

María



_______________________

Maria L. de Castro, JD, MA

Lawyer

Director www.costaluzlawyers.es

El blog de Maria



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24 Nov 2014 1:33 PM by starfox Star rating. 58 posts Send private message

We have been looking within around 30 minutes of Alicante.

Honestly, we have only seen one property that was legal and frankly are kicking ourselves that we missed out on it. Every other property has something that ultimately becomes a stumbling block, there may be a lot of legal properties but none of them appear to be what we are looking for since we haven't come across them and I don't think it's wise to buy something you don't really want just because it's legal. I'm not saying they don't exist but from what we have seen they are the exception.

I suppose legal is a bit of a broad term as well as there are a number of areas it covers whether it be the catastro, escurita or even town hall planning permissions but at the end of the day as a purchaser all of that is the sellers responsibilty to have sorted, preferably before they even market the house.

We probably know most of the agents by now and have experienced the good ones and the truly shocking ones, it's not the agents fault the properties have problems.





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25 Nov 2014 11:55 AM by Hephaestus Star rating in The Peak District Na.... 1235 posts Send private message

If say someone from the USA attempted to make sense of some of the jargon and antiquated practices of UK estate agents, you could forgive them for not trusting the system. An old friend (sadly no longer with us) was the senior partner of a very small single office UK estate agency, he never allowed any member of his staff to negotiate on a sale until they had visited the property, something IMHO that ought to be a prerequisite throughout the industry.

If you come up against a rougue or incompetent agent a good lawyer will more than equalise matters, my advice for what it's worth, is to find your lawyer before you even start to look for a property.

Good luck whatever course you decide to take. yes 

 


This message was last edited by crookesey on 25/11/2014.

_______________________

I'm Spartacus, well why not?




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25 Nov 2014 12:39 PM by starfox Star rating. 58 posts Send private message

Yes, but a US buyer in the UK can with a fair amount of certainty presume they can buy a home that is as advertised and not in danger of breaching any number of regulations, demolitions, debts and new works on the property being blocked.There is a level of security in home purchases that is not seen in Spain, so as you say a lawyer is a must because they are your security.

Here there are so many different variables the mind boggles and rogue estate agents aside you are still up against it.

Definitely a good lawyer is a must I agree, I would also advise anyone to get one above a gestor or let an agent handle the transaction but there comes a point when you are just throwing good money after bad and enough is enough.

It's unfortunate, it may just be bad luck or the area but the only thing I can say is if someone is a seller then get everything in order and make it available before they even consider putting it on the market, even if they  believe it is easily fixable during the sale process it is their  responsibility and not the buyers.





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