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Buying a Property in Spain
A Step-by-Step Guide: More people are choosing to purchase property on the Costa del Sol as a second home, for rental purposes, an investment opportunity or for retirement in an excellent climate with sun almost all year round.
Serious thought is required to first identify clearly in your mind the type of property you need and the area you would like to be. Once armed with this infomation you would be well advised to contact our office to establish what is available and the costs involved in purchasing in Spain, as detailed below: |
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USING OUR SERVICES
We can be very helpful by providing a wide selection of properties and local knowledge. If we do not already have it listed, we can seek out your ideal property. We have the experience to answer all your queries and guide you through the negotiations and sometimes complex procedures to the completion of your purchase. |
APPOINT A LEGAL REPRESENTATIVE
The legal representative, who should be fluent in your language, will carry out the necessary checks on the property and complete the legal requirements of the sale. |
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1. The first check is to obtain from the Property Registry a "Nota Simple" which will identify the registered owner and provide details of mortgages or embargos on the property.
2. Receipts for payment of the IBI (Impuestos sobre Bienes Inmuebles), the annual real estate tax, should also be obtained. These will show the "Valor Catastral", the assessed value of the property on which your property tax will be based upon.
3. If you are purchasing a new property, your legal representative should ask to see the Declaración de Obra Nueva" and the "Declaración de Alteración de Bienes Naturaleza Urbana" as proof of legal requirements have been passed.
4. Receipts for community charges should be obtained where there is a community involved. It would be a good idea to chat with neighbours and other residents to identify any possible problems.
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HOLDING DEPOSIT
After the price has been agreed and the "Nota Simple" has been checked you will be required to pay a small holding deposit to hold the property off the market in reserve until completion. Your legal representative will prepare a formal offer and agreement for this purpose |
EXCHANGE PRIVATE CONTRACT
After the formal acceptance of an offer and searches have been completed, the exchange of private contracts or the signing of an option to purchase will normally take place within three weeks.. |
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COMPLETION AT THE NOTARY
On the assigned date, both the purchaser and seller (or their legal representatives) will attend the offices of the Notary to sign the "Escritura de Compraventa" (the title deed) which should state the property is sold free of charges, mortgages and tenants. |
| The Notary does not check the terms, as the legal representative should have done so beforehand, but solely certifies that the parties are in agreement. At this point the balance of payment is made and possession passes to the purchaser. |
THE COSTS INVOLVED
There are five main costs involved in this transaction:
Lawyers Fee: Usually around 1% of the purchase price plus 18% I.V.A.
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Notary Fee: Fixed by law and normally in the range of 300 - 900 Euros.
Registry Fee: Approximately 40% of the Notary fee.
Transfer Tax (ITP): Is 8% of the purchase price but, when buying from a developer, this is replaced by 8% plus 0.5% stamp duty.
Plus Valia: This is local municipal tax and is based on the officially assessed increase in the value of the land since the last time the property changed hands. This can vary from a few hundred to thousands of Euros. The exact amount can be obtained from the Town Hall.
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WHO PAYS WHAT?
It is normal practice for the purchaser to pay the above fees and taxes with the exception of the Plus Valia". However, everything is negotiable and should be stipulated as agreed in the contracts.
The seller will pay his own Capital Gains Tax and the Estate Agent's fee.
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