Nerja Property
Nerja is excellently located. It is 40 minutes from Malaga's international airport and only an hour from Granada and its ski slopes. The town is close to several national parks and there is world class fishing in the inland lakes which are only 1.5 hours away. Nerja now offers the perfect setting for anyone wanting to live somewhere on the coast that still retains its Spanish charm but has the amenities of a busy cosmopolitan town.
The prices in the Nerja good value
compared to the more well known coastal resorts of Marbella and Torremolinos.
If you are prepared to travel in land a bit, property is even better value, you can snap
up a bargain 30 minutes into the mountains in
Competa for example. For more information on
prices review the Kyero website
(Nerja is in the Malaga Province).
If you are looking to rent or buy Nerja Property, there are many estate agents you can use. Most have websites allowing you to get a feel for what is on offer and set up viewings before you turn up, it is also worth walking through the town when you are there and talking to a few more agents.
Be aware that in Spain it is usual for homes to be sold with
more than one
agent, as a result prices may vary depending on the agent, so shop around.
This also means that agents may not know for sure if a property is still on the
market or what the current price is - always get them to specifically confirm
this information before you travel to see any property you have set your heart
on. Agents fees do differ and can be very high. Ask what they are
and make sure that they are included in the sales price (this is the normal
practice). Some Spanish sellers will set an unrealistic price which bears
no relation the market and they will not accept offers, however most will - so do
try to bargain.
Mortgages, Valuations and Declared Values
If you are buying for cash then lucky you! A popular way of funding a
Spanish purchase can be to re-mortgage in England and use the money released to
buy in cash in Spain. If you do not have piles of ready cash then you have
to try and
arrange a mortgage.
Several British banks do offer mortgages on properties abroad, they tend to be for a maximum of 70% of the value though. The benefits here are that you will be dealing with a trusted English speaking company and will in most cases pay your monthly amount in Sterling. However you should always get a quote from a large reputable Spanish bank too. They normally offer a maximum 80% on the value of the property (unless the property is a coastal new build) and you will have to pay the monthly amount in Euros - however these mortgages are very cheap and if you go into a coastal branch you are likely to be dealing with someone who's English is very good.
One heavily marketed option is to get a broker to negotiate a Spanish mortgage on your behalf. Before approaching a Spanish bank direct we tried several of these, in our experience they are not that useful if you not buying a new build and they are expensive, adding 1 - 2% to your total costs. In our experience Spanish banks prove to be more helpful and in most cases they will not charge you anything until the sale has successfully completed.
When arranging a mortgage in Spain the property valuation is much more important than it is in the UK. In the UK the banks tend to take the valuation as market price, whereas in Spain this is not the case. The valuation can be lower than the market price and if, for example, you have agreed a mortgage valuation of 50% you will only get 50% of the valuation irrespective of market price.
Why is this? The legally
declared value in Spain is often not what you actually pay. This is a
widespread tax fiddle - the seller has to pay a type of capital gain on the
difference between the price they purchased the property at and the sales
price - so they want the official taxable
value
(which is the declared value) to be low. The declared value of homes is
therefore normally lower than the actual cost and as mortgage valuations are
partially based on the declared value of recent sales this can be lower than
market price.
The declared value in Spain should be bargained with in addition to the sales price and should be agreed clearly up front. The seller will want to minimise it - the risk to you is that when you sell the property, if you can not agree on a reduced declared value with the person buying from you, you will have to pay tax on the difference between the sales price and the declared value when you bought it, rather than the amount you actually paid. The good news is that lowering the declared value reduces the cost of the initial purchase. In addition to the capital gains tax the seller pays, you the buyer also have to pay 7% (more for a new build) tax on the declared value - if this is lowered your costs go down too.
On the day of purchase you transfer the 'declared value' by bank transfer or cheque and have to pay the balance in cash semi-secretly! Although, the notary knows it happens they should not see it!
Although property in Spain is good value compared to the UK the process is more expensive, you will see estimates of 10% of sale price which may rise to 12% if you arrange a mortgage. Plan for costs of around 10% but these estimates are at the top end - if you have the confidence and time to shop around you can make some savings and total costs of 8% of your property price are feasible.