One in every two house purchases (50%), made in Menorca is by a non-resident in our country. This percentage that the Bonnin Sansó group has recorded and which, more recently, has in fact gone above 50% (a little more than one in two purchases), leads us to talk today about mortgages for foreigners and to provide a list of always useful recommendations:
WHAT ARE THEY? They are a type of loan that the credit entities make to non-residents (foreigners or Spanish people whose tax residence is outside Spain) so that they can finance property purchases in this country.
NIE: Before starting any process, it is recommendable for the non-resident to obtain an NIE, the Foreigners Identification Number. It can be processed personally or through a representative of the Government Delegation office and/or Foreigners Office. This document facilitates opening a bank account in any finance entity in this country.
FINANCING: the maximum finance that is usually offered by banks to buy a home is 70% of the purchase value or valuation, and the repayment time is usually a maximum of 30 years. As always, each entity may be prepared to skip this regulation according to the type of client or operation.
DOCUMENTATION: To evaluate the awarding of a mortgage, the bank asks for specific economic documentation, which in the majority of cases, the bank itself will translate to avoid the costs of sworn translations.
COSTS TO TAKE INTO ACCOUNT: The costs and taxes that arise from a house sale are generally, Value Added Tax (VAT), or Capital Transfer Tax (CTT), depending on whether it is a new property or second-hand, Stamp Duty (IAJD) and finally, the notary, registry and bank fees. We are speaking of an approximate amount that may be between 12 and 14% of the total. These costs are the same for a resident as for a non-resident.
NOTARY AND REGISTRY: When the mortgage is awarded, the sale contract will be signed before a public notary and then the documentation sent to the Property Registry to record the operation. This type of procedure is usually done by the gestoría or legal agency, the equivalent of the high-street solicitor.
Did you know that in Menorca the British are the people who buy most, more than 30%? They are followed by the French, with close on 15%, Italians, almost 10%, Germans, almost 7% and then other nationalities such as Swedish, Swiss and Belgians.
