ALL TOO often British people living in Spain assume that Spanish banks operate in a similar way to the UK. This is not the case.
In today’s current market place many people looking to sell a Spanish property will have had to reduce the price of their property to be able to negotiate a sale. With all the associated costs and taxes that need to be paid out, maximising the amount of sterling that you finally receive for your euros is vital. Clients need to be aware of two important factors that can cost you dearly when converting your euros into sterling and moving those funds out of Spain.
Spanish bank charges
Once your sale has been completed you will receive a cheque from the Notary. Many Spanish banks will charge a fee based on the value of this cheque to accept and clear the funds. They will then look to charge a further percentage fee to send your funds out of Spain. To put this into perspective, on the amount you receive, you could incur fees just to clear your cheque and transfer funds out of Spain. As most clients close their accounts when they leave Spain, there is little room for negotiation. If you do manage to reduce the fees it is often based on leaving a lump sum on account for up to a year.
Exchange rate risk on repatriation
The agreed sale price of a property is often based on the amount of sterling that the seller hopes to receive, according to the exchange rate at that time. However, a Notary / completion date can take place some weeks or even months after the contract of sale has been signed. This means that sellers run the risk of the exchange rate moving against them and thus reducing the amount of sterling that they receive. For example, with an exchange rate of 1.20, a sale value of 150,000€ will give you £125,000. Should this exchange rate rise to 1.23, a rise of just 3 cents, this would give a return of £121,951 – that is £3,049 less sterling hitting your UK account.
Moneycorp offers a range of service that allows clients to lock into favourable exchange rates at the time of the signing of the contract, taking away the risk of the exchange rate moving against them in the future. Using Moneycorp will also allow you to eliminate or significantly reduce bank fees leading to even greater savings.
For more information on how Moneycorp can help you to save on your Spanish bank fees as well as helping you get more pounds for your euros, contact us on 902 887 243 or email Moneycorp directly at [email protected]