BUYING LAND IN SPAIN
Buying urban plots (or land) is the first step you must take to make this investment. The choice of land is one of the main factors that will determine whether your business will succeed or fail.
The area where the land is located is very important. In the center of the cities, the land is highly valued. Generally, companies that are engaged in building buildings can cover this cost. Since its cost will be atomized according to the number of units that are built. Therefore, if you want to build a house, you will have to move a little away from the most central areas.
The price of a piece of land depends on many factors apart from the location, such as the building index, the maximum height, the minimum plot and zoning.
Also, you must take into account before buying land the situation regarding land use so that it coincides with your investment project.
VALUES TO INVEST IN PLOTS TO BUILD
Below we will provide some values for you to take into account when carrying out your financial project.
In neighborhoods located between 7 and 15 km from the city center, calculate an average of 500 euros per square meter. Therefore, a land of 500 square meters will have an approximate value of 230 to 250 thousand euros.
In addition to the price of the land, you must calculate the taxes to be paid. In the event that the seller is a natural person, they must pay the ITP (Property Transfer Tax): 10% of the value of the land.
If the seller is a legal person, he must pay VAT: 21% of the value of the land.
Tax on Documentary Legal Acts (IAJD): average approximately 1% to 1.5%.
To this you must add the notary fees and property registration fees.
If you want to build for your own home, the house project will have your stamp, since you will do it according to your needs.
BUILD THE HOUSE ON YOUR OWN PLOT
If the house is to be sold for a profit, you may want to let the professionals decide what is best for profitability purposes.
The first step is to order a project and choose the company that is going to develop the direction of the work.
Here we give you an idea of the costs that this first stage will demand. In the first place, for the architecture project and the construction management, you must calculate a cost of 20% of the total value. For example, in the construction of a house of 200 square meters with a value of 240,000 euros, he calculates that this value will be 48,000 euros. In addition, you will have to add energy efficiency engineer expenses, where you will spend approximately €1,300. For geotechnical studies, €800 and for topographical studies, €200 approximately. In total, the cost of these three items would be €2,300.
Subsequently, in the second stage the work is developed. The price per square meter built has an average value of €1,200. Of course, these costs are highly variable. If the project is for your own home, the cost will surely rise, because you will look for better quality, more exclusive and durable materials. In our example, calculating a house of 200 square meters, the value of the construction will amount to 240,000 euros.
You must take into account the following costs:
#Value Added Tax (VAT): 10% on the total value of the constructed area.
#Tax on Constructions, Installations and Works (ICIO): 4% on the price of the construction.
#Town Hall Building License: 4% on the construction price.
#First occupancy license: It has a value of 0.05% of the total.
In our example you should add to the total cost the sum of 43320 euros.
Other expenses to take into account are electrical, water and gas installations, which add up to approximately €3,000.
CONCLUSION OF INVESTING IN PLOTS TO BUILD
The project of your own house made to measure is an incredible idea. It's like building your own dream. But in addition, it can be a great investment in the real estate market. It all depends on getting the numbers right. Do not get too excited about the process and spend more than you should, respect the investment project and entrust all this to an architecture company that generates confidence in you and specializes in these issues.
All the prices that appear in this article are merely indicative. The margin can vary widely depending on your goals, the location of the land, and the quality of the construction above all else.
The important thing is that you keep in mind that, although the real estate market behaves in a changing way, investing in land has proven to be something safe and profitable in the long term. Go ahead with this adventure of investing in land to build on! Not only will you earn money, but you will have a great experience seeing your work grow from seed to full creation.
Our Real Estate Agents will help you find the property that best suits your needs (location and budget).
We accompany you at all times, in the buying and selling process, whether you want to buy or sell.
Enter – Real Estate Agency in Alicante:
+34 678 00 88 00
FORMENTERA MODEL- ECOLOGICAL HOUSING
Imagine a house with an impressive design in which outside noise is not heard,
the temperature is constant and there are no drafts.
We present the Formentera model in Mutxamel (Alicante).
WOOD, THE MATERIAL OF THE FUTURE.
There is a tendency to think of wood as a material with an expiration date, and without the ability to compete with its alternatives, concrete and steel. Although it is true that the latter have allowed architects and engineers to develop large-scale works and infrastructures, wood today, thanks to the optimization of its production and the enhancement of its capabilities, is, without a doubt, the best option for medium-sized works.
In recent decades, the view has been established among consumers that concrete and steel are the only way to build, mainly influenced by architectural fashion and high-rise works.
However, recently, driven by prefabrication, the improvement of construction techniques and the optimization of resources, wood is once again experiencing a renaissance in construction. And not only for these reasons, wood also has a number of advantages:
• It is a renewable material and its use is much less polluting than any other material used in construction.
• It is a light and resistant material, this contributes to structural solutions with less material per surface unit.
In other words, if we compare a concrete structure with a wooden one, for the same resistance, the wood will use much less material.
• It is a thermally insulating material and acoustically absorbent.
• Well protected from humidity and biotic agents, it can last for hundreds of years.
All constructions are made with a load-bearing wall system.
This system, also called a diaphragm panel, is made up of a series of horizontal and vertical wooden studs that make up the skeleton of the walls and floors. These skeletons are closed on both sides with wooden boards, configuring a compact and lightweight element, with a very high load capacity and exceptional thermal and acoustic insulation performance.
This type of construction is detailed in the technical building code.
We are also proud that our panel is built 100% with wood from eco-sustainable forests, thus reducing the carbon footprint and making our contribution in the fight against climate change.
Our panels constitute the minimum unit of execution, and playing with their thickness and surface finishes allow us to use them for load-bearing walls, enclosures, interior partitions and floors.
There are two types of industrialized housing, those that are assembled on-site and those that are modular. Differences? Those for on-site assembly are finished on the plot, while the modular ones leave the factory assembled and only the finishes are made on the plot itself.
Which ones are better? Both are equally good, it is not better to do it one way or another, it depends on the conditions of the land, the accesses to the plot and some aspects of the design of the house itself. In less than 6 months from the start of the work, the house will be ready for customers to start enjoying it.
“MODULAR” 3D SYSTEM
We speak of 3D or "modular" construction when the house is divided into cubic fragments or modules that are finished both inside and outside from the factory. These modules are installed and assembled together on site. On-site execution times are considerably reduced, since the modules are 90% finished from the factory, incorporating windows, doors, roof waterproofing, installations, etc.
Another feature of this system is that the modules are self-supporting. This means that the foundation options are varied. From sanitary slabs and floors, to piles and even other more innovative systems offered by the market.
ADVANTAGES OF THE 3D SYSTEM
Minimum execution time on site.
Total factory control of the finishes.
Different foundation options.
Maximum dimensions by logistics
>Are the houses well insulated?
The panels provide insulation well above conventional work, achieving A/A+/A++ ratings, both on walls, floors and ceilings, and can reach Passivhaus standards.
>What type of heating can be installed?
Any heating and air conditioning system can be installed, as well as fireplaces, underfloor heating, etc.
>How long are these dwellings?
Structurally, they last longer than a traditional brick home. The traditional construction house is very heavy structure. All the weight falls on the foundation and load-bearing pillars. Over the years they weaken, and if it is not maintained it tends to collapse. Our light frame construction type has minimal structural weight. All the vertical walls function as a load-bearing wall, so the structure can hardly be demolished. A clear example is that the vibrations of the transport from the factory to the final destination, designated by the client, would be equivalent to a major earthquake, without causing any alteration to the home.
> Are they fire resistant?
Fireproof materials are used in the manufacture, both outside and inside.
>Do they resist the wind?
Due to its weight it is materially impossible for the wind to move it. By way of illustration, during transport, the houses withstand winds both due to the speed of the truck and the wind itself, and never suffer any alteration.
>Is it possible to install it on rustic land?
To install a house on rustic land, we recommend that you check with the town hall of the municipality where the farm is located and check what permits are necessary and what regulations apply to it.
BEFORE BUYING A HOME IN SPAIN
Please note that this is only a general summary of the different procedures. Property conveyancing – that is, the transfer of legal title of real property from one person to another, requires a sound knowledge of the Spanish legal language and regional regulations.
There are some more documents which you will have to get prior to signing the contract. The most important ones are:
BUYING A NEW BUILDING PROPERTY IN SPAIN
A construction permit and certificate from a competent expert verifying that the building matches both the licence granted by the town council and the project it approved.
A first occupancy licence, a habitability certificate and other administrative authorisations that establish that the dwelling is legally habitable.
Documents signed by the utilities supplying the essential services (electricity, water, gas and telephone).
The entry of the building in the Property Register (new buildings), together with insurance cover against hidden defects or flaws in the construction, as established by law.
A Property Registration Certificate setting forth the legal situation of the building.
The Owners Association Statutes (or inscription in the Property Register of the deeds of any new, finished and horizontally-divided building).
We also recommend:
Ask the developer for: a Certificate from the Commercial Registry accrediting the legal existence of the company, details of its registration, the administrators and/or their representatives, the company's registered office, its fiscal identity number, confirmation that bankruptcy proceedings have not been registered, and a declaration that there are no claims, lawsuits or any other contingencies that might affect the development.
BUYING A SECOND HAND PROPERTY IN SPAIN
Check the legal position of the property by contacting the Property Registry
If the option is to buy a used or renovated apartment, it is advisable to have the title deed and the certificate of ownership and charges, as well as the plan of the house at a scale of 1/50. In the case of second-hand homes, the certificate of occupancy is important because it confirms that the property meets the minimum requirements to be inhabited. In addition, it should be remembered that this document expires 15 years from its issuance, so you must check that it is up to date and in force.
Likewise, the seller is obliged to supply other documents if they are requested. This is the case of the registration bulletins in the service network, the home guarantees, the registration data of the apartment or the deed of sale, and the receipt that confirms the payment of the last IBI. The cadastral value of the property must appear in this last document.
If there are doubts, as it may be in the case of real estate located in undeveloped areas or near the coast, it is important to request the urban qualification to verify its legality. Another document is the book of the building, which collects the identification and construction data of the property, the maintenance tasks to which it has been subjected and, if any, the reforms carried out.
BUYING AN OFF-PLAN PROPERTY IN SPAIN
In the majority of the cases, the first agreement for the purchase of the Spanish properties is done when the construction is projected, and works are not started yet.
Off-plan projects demand a long term purchase/construction process which may create insecurity in the investor’ side, specially when they have to deposit and pay amounts of money in account of a final price of a property when, on that moment is only a “project”. This uncertainty is even higher when the buyer/investor does not know essential aspects of the project as: the Builder´s reputation or credit score, the economic situation of the building’s project, etc. And, the most important, which kind of guaranties are offered to secure the required payments in case the project is not finished.
– Legal and Administrative construction documents: When buying a new property, there are several documents which must be studied and properly checked in order to control the legal situation of the plot and building, and the proper development of the construction.
This is a task which must be done by recognized and construction specialist lawyers, and it must be done in every step of the construction process: From the earliest steps of the process till completion. So, in every step, there are documents and information which must be supplied and obtained from the purchasers, or by their lawyers, in order to confirm that all the legal and administrative requirements are fulfilled properly.
If you are thinking of buying a home, it is best to ask for the help of an expert, since, as you have been able to verify, the purchase of a property has legal implications.
Enter – Real Estate Agency in Alicante:
+34 678 00 88 00
Make sure you pay the corresponding taxes
If you're planning to take the plunge and buy real estate in Spain, you’ll want to consider the various taxes you’ll have to pay when planning out your budget. These taxes may vary depending on a variety of factors—such as the type of property you want to buy, the municipal jurisdiction it’s located in, and the total floor space.
Buying a new building
If you want to buy a brand new property, you'll have to pay two types of taxes:
Value Added Tax (IVA—Impuesto sobre el Valor Añadido): Value added tax (or VAT for short) is a general, indirect tax levied on the purchase of goods or services. Value-added tax on new buildings carries a reduced rate of 10% on the sale price of standard properties, and 4% in the case of publicly-subsidized housing. If you purchase a property in the Canary Islands, you'll either have to pay the Canary Islands General Indirect Tax (IGIC) of 7%, or a tax of 5% for a “primary residence” purchase. This second tax is applicable if the taxable base doesn’t exceed €150,000 (though the limits for large families are higher) and you aren’t already a home or usufructuary owner. If you're buying a house in Ceuta or Melilla, you'll have to pay the Tax on Production, Services, and Importation (IPSI).
Stamp Duty (AJD—Impuesto sobre Actos Jurídicos Documentados): Stamp duty is levied on public deeds and is part of the Conveyance Tax and Stamp Duty—an indirect tax applied to transfers of property for valuable consideration, corporate transactions, and notarized legal acts. This tax is applied to the purchase price, and rates vary in each region.
Buying a non-new property
Besides the purchase price itself, taxes are one of the most significant expenses to consider when buying a formerly-used property. Here, you’ll need to pay transfer tax (ITP—Impuesto de Transmisiones Patrimoniales) instead of VAT. The ITP rate varies according to your region as well as your personal circumstances, with rebates for those under 30 years old, first home buyers, real estate in rural areas, or those with large families. You’ll need to calculate what you owe using an official tax self-assessment, and then transfer the amount to the Spanish Tax Office account via one of its partner banks.
To give you an idea of the figures, the following table shows the ITP transfer tax rates for several regions:
Castilla La Mancha
Community of Madrid
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