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Buying a cave house

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Buying a cave house

Post by Tala Orchard on Tue Apr 19, 2016 9:15 pm

We have now had 3 viewing visits and the first two were very very frustrating but we did not give up hope. We had some idea of what we wanted and this last time it seemed that we had found the perfect place. So now a price has been negotiated and Victorio has approved the contract.

Are there any possible pitfalls we should now watch for? Or is it everyone's experience that it should be plain sailing from now on?
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Re: Buying a cave house

Post by DannyandJosie on Tue Apr 19, 2016 10:44 pm

Hi there,

I can only go on our recent experience of completing in November of last year. We had a couple of minor issues all of which were dealt with by Victorio and with no stress on our part. The process is reasonably straightforward. I have a blog running based on our purchasing a cave house and there is an entry both on our personal experience and the process in general. It may help/set your mind at ease. [You must be registered and logged in to see this link.]
Welcome to the world of cave ownership.

Danny

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Re: Buying a cave house

Post by pete_l on Wed Apr 20, 2016 7:46 am

Tala Orchard wrote:Are there any possible pitfalls we should now watch for? Or is it everyone's experience that it should be plain sailing from now on?
A few things come to mind.
Do sellers still ask for "black money" (i.e. part of the selling price to be paid in cash, off the books, so they can evade some tax? If so, just refuse and make sure the full price you pay is on the contract. Otherwise you will get taxed when you come to sell. You could also get fined for the tax evasion, too.

Remember that you are not allowed to make cash transactions for more than €2500. So if workers, etc. ask for cash make sure it is below that amount.

Also, getting utilities transferred into your name can be tricky. Apparently it's "not the spanish way". So I know of people who are paying the electricity bill with the former owner's name on the account. Even though they bought the house many, many, years ago.

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Re: Buying a cave house

Post by Radar on Wed Apr 20, 2016 8:49 am

hi there

you didnt say which agent you bought through, if it was through Sean at SIP you will have no problems we bought our cortijo/cave house last october and it was really easy thanks to Sean he arranged every thing for us,all straight and clear and also handled by Victorio,Sean also aranges for the utililities to be changed into your name.
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Re: Buying a cave house

Post by miron on Wed Apr 20, 2016 9:23 am

Make sure your escritura is correct! 6 years on and ours is still being sorted out in Granada!
The payment of black money is more difficult now as all sales are now checked against the value the Catastral (the land registry) has put on a property. If it's not a reasonable match the taxes are paid on what should have been paid, not what was officially paid. (My sister bought a house recently in Granada and was told this).

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Next question is...

Post by Tala Orchard on Thu Apr 21, 2016 4:51 pm

Has anyone any experience of selling property in UK in order to purchase in Spain? How do the two transactions marry up?
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Re: Buying a cave house

Post by Lurchio on Thu Apr 21, 2016 4:57 pm

My experience, they DON'T! They will be two separate processes entirely, that is, sell up in UK and then purchase in Spain, or already have the place in Spain and sell up in the UK when ready. Tax and Conveyancing Spain / UK for House purchase are NOT linked at all I'm afraid.
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Re: Buying a cave house

Post by pete_l on Thu Apr 21, 2016 6:36 pm

Tala Orchard wrote:Has anyone any experience of selling property in UK in order to purchase in Spain? How do the two transactions marry up?
I would say you should SELL your house in the UK before you move in permanently to a house in Spain.

The reason is that in the UK you are liable for Capital Gains Tax on the profits from any house sale, unless it is your primary residence. So if you have a house in the UK that you are living in, then you move to Spain your UK house is no longer your primary residence (since you moved out).

Obv. you can buy a house in Spain while living in the UK. Just make sure you only come to Spain for holidays - not for long periods (I don't know what the limit is).

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Re: Buying a cave house

Post by Lurchio on Thu Apr 21, 2016 7:28 pm

For tax residency its 183 days as a cumulative in any Spanish tax year January to December. Any more than that, you are deemed to be a Spanish tax resident. You are a tax resident (irrespective) immediately that you make Spain your 'Centre of economic interests' and each case for that on its merits. The other side of the coin is the EU/ Spain ruling that if you are here, or intending to be here, for more than 90 days (and that's a 'straight' 90 days, you can 'stop' the clock by just being out of Spain for a day and start the 90 days again on return) you will have to register at the Police Station in Baza. Its called 'residency', but its actually just asking to stay. For that you will have to prove income so as to be NOT a 'burden on the state' and health cover. (The EHIC is for emergencies only). Have a look on the Gov UK website, its all there under 'Living in Spain'.
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Re: Buying a cave house

Post by Lurchio on Thu Apr 21, 2016 7:37 pm

That's not to say that any 'BREXIT' will change things, mind. For example IF we are OUT, then we as Brits could lose our right to 'free movement' around the EU, and the 'Residencia' will be harder. Obviously early days, but there you go!
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Re: Buying a cave house

Post by Lurchio on Thu Apr 21, 2016 9:05 pm

Also, see if you can 'find' the property on the Catastral register, you'll see a link on the forum (thanks, Dave!). If theres a reference, you will find it on the escritura, so check it out. There will be a pdf file to download which gives a plan of the area and shows your property, if its not on the plan, ask why not! IF IN DOUBT, TAKE INDEPENDENT ADVICE!!! NOT anyone recommended by, or linked to the Agent, Independent.
Have you thought about renting in the area first, to see if it 'talks toyou' , cancel that if you are sure of things now!!!
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Thank you

Post by Tala Orchard on Fri Apr 22, 2016 12:05 pm

Thank you for all these replies.

1. We have not had a residential address anywhere since 2014. (long story)
2 We have been advised that there will be no CGT to pay on the land here in the UK.
3. Victorio, who was recommended here on this forum, is looking out for us in Spain.

So. basically, what it comes down to then seems to be that we stand to lose any deposit we pay regarding the purchase in Spain if the sale of the land falls through.

Dave - I am sorry if this topic seems to be in the wrong section, but I did not think before I started it and so if you wish to move it from cave chat to non-cave chat please would you do so?
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Re: Buying a cave house

Post by Lurchio on Fri Apr 22, 2016 1:53 pm

I hope it all works out for you. The reserva system is binding on all parties, BUT (always assuming you have done the reserva) it can be got out of, with an option of costs settlement. If you haven't gone very far down the legals, it won't be huge amounts like the UK!!!As I said, best of luck and hope it all comes right for you in the end, its all worth it!
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Re: Buying a cave house

Post by Tala Orchard on Wed Aug 03, 2016 5:26 pm

Just thought I would give the latest info. Firstly, the buyer of the land paid a sum equal to the deposit payable on exchange of contracts straight into our Bank account even though contracts had not been exchanged. So we were able to pay over the deposit payable for our Spanish cave house.

Today, we have heard that exchange and completion of the sale of the land is ready to take effect and so we should receive the monies due to us before the end of the week.

We have discovered that TransferWise should be called TransferQuick because the Euros reach our Spanish Bank account the same day, so with a bit of luck we will at long last be in a position to finalise the purchase of our cave house! Whoopee!

We left England on the 19th July having spent the previous day shaking out plants and putting them bare-rooted in plastic farmfeed sacks. They reached The Altiplano safely but some of the plants are now beginning to show stress despite being in a garage and being given water for their roots. Can't wait to see how many of them we can save.
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