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BuyPropertyInEurope.com
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The material available on this website is designed to provide general information only. Whilst every effort has been made to ensure that the information provided is accurate, it does not constitute legal or other professional advice.
A Brief Guide to Buying Property in Spain
When you have found a property be prepared to put down a deposit, probably between €2000-3000. At this stage it is important that any survey, inspection or enquiry is carried out.
An Escritura will be raised by the vendor’s notary. This will describe the property its title, any restrictions for use and specific consents. If not registered the buyers lawyer will wish to find out who claims to own the property – if a family unregistered title could go back more than one generation; also the exact square meters of the property and if desirable have the boundaries staked and agreed with vendor and neighbours before new title is registered.
Buyer and seller will sign a preliminary contract which outlines the terms of the purchase. A further payment of 10% of the purchase price will be expected. If the buyer wishes to change the use of the property, house to hotel, field to campsite and the purchase is dependent on consent include it in the contract as a condition. We recommend that all buyers take at least a small mortgage because it will harness the banks legal and inspection expertise to your side.
If a new property is being purchased off plan there may be provisions for stage payments usually 10% deposit, one or two stages of 30% or just one of 50% and the balance on completion. Often a mortgage will be automatically available, subject to status, on completion. Take the advice of your lawyer on stage payments, the development will usually be underwritten by the bank.
If a new property expect to receive:
- Deed of declaration of new construction
- Occupancy permit
- Certificate of rateable value of the property
If a resale property expect to receive:
- The title deed of the property
- Receipt of payment of the real estate tax for the last year
- Receipt of payment of the tax on the increased value of Urban Land
- Certificate that any community charges (if applicable) have been paid up to date
- Latest copies of domestic bills so that you can take over the services such as electricity and water
If the seller should default during this period he has to pay twice the deposit to the buyer. If the buyer defaults the deposit is forfeited.
When all searches, enquiries, surveys and investigations are complete a date will be arranged for the signing of the Escritura and payment of the balance of the purchase price. Keys are handed over and the property is the buyers to enjoy.
Fees:
As well as the cost of the property the buyer will be liable for:
- Transfer tax (IVA), which at present is 6% on a resale property 7% on a new one
- 1/2% stamp duty
- Around 300€ to change the title to the buyers name at the Land Registry
- Notary charges for copies of the 'escritura publica'
- Banks may also charge fees for mortgage loans
In total allow 10% of the purchase price for legal costs an additional sum for mortgage costs. Check who is responsible for the sellers fees but if this is asked for it is sometimes negotiable.
Annual Costs
The local town hall will charge:
- IBI which is an annual real estate tax
- If the property is part of a community sharing grounds, swimming pool and access hallways etc expect community charges to be determined by a committee drawn from the residents on which every buyer has the right to sit or take part in by Power of Attorney
- Wealth tax based on the value of the property
- Property owners income tax based on your income from the property
Clarify these details with your estate agent at point of enquiry.