– BUYING A PROPERTY IN SPAIN!—
Are you a first-time buyer in Spain? Don´t you worry, your personal real estate agent as well as your lawyer will help and guide you through every phase of the process. The different steps involved in the purchase of a property in Spain are listed below.
The first thing to keep in mind when looking for your new home is to ask for the Habitation Certificate (Cédula de Habitabilidad), a document issued by the Town Hall to ensure the building is built according to plan and fulfilling all construction regulations.
All properties must have the Habitation Certificate in place. Without it the house may have legal impediments and any bank will refuse a mortgage. The utility companies also need it to transfer the use of electricity and water to the new owner´s name.
When you have found your dream property, there are a few steps to complete before you have the key in your hands.
The Reservation Contract is a standard procedure to reserve the property for a specified period of time during which the lawyer conducts the Due Diligence. The reservation contract is a temporary reservation document and would set out the basic terms and conditions of the purchase to be approved and signed by both the buyer and the vendor.
This contract would include:
full name of buyer and vendor
price of the property
date to sign the Private Purchase Contract
other special conditions
the deposit amount placed in order to reserve the property.
The deposit amount varies between 3000 – 10 000 euros, depending on the price of the property.
The reservation deposit is fully refundable in the event that your lawyer should discover any legal impediments pertaining to the said property.
Should you continue with your purchase after the Due Diligence the deposit will be used towards the purchase price.
We recommend to have a lawyer representing you when buying your property in Spain. She/He will do the Due Diligence on the property, arrange the registration and help getting all the utilities put in your name.
Your lawyer will make sure the property has no contingencies, that the seller is the owner of the property, that there are no embargoes or debts or any other legal impediments tied to the property.
In order to buy a property in Spain you must have a tax identification, NIE, number (Número de Identidad de Extranjeros), to be able to open a bank account and pay taxes, legal fees and living costs such as water and electricity. If you do not have a NIE number your lawyer will help you with the application.
We can help you open a Spanish bank account if you do not already have one.
A Private Purchase Contract (Compraventa) is a contract between the buyer and the vendor which will be prepared by your lawyer, setting out the terms and conditions of the contract and will contain:
The full names and identity numbers of vendor and buyer.
A legal declaration from the vendor that he/she is legally positioned to sell the said property.
The exact address and dimensions of the property and its features as set out in the “Referencia Catastral” Government registration of the property.
The completion date and hand over of the keys etc.
The agreed terms and conditions as agreed buy the buyer and the vendor.
At this stage, the buyer pays 10% of the purchase price, less the deposit already paid. If the buyer should withdraw from the purchase during this phase, they will forfeit the deposit to the vendor. If it should happen that the vendor decides to withdraw, they will be obliged to pay double the deposit amount to the buyer, unless otherwise agreed.
The Title Deed (Escritura) is the final step in the process. The document is signed in front of a public Notary. When this is completed, your lawyer will register the property in your name.
The buying costs in Spain vary from about 10% to 14% of the purchase price.
Firstly there is the Property Tax, which for new properties is 10%, and on re-sales it´s 8% to 10%, depending on price category.
(Purchase price up to €400 000 8%
€400 001 – 700 000 9%
€700 001 and over 10 %)
(When buying commercial lands and garages the transfer tax is 21%).
There are also approximate Notary and legal fees as follows:
1% Notary fee (notarization of property cost)
1% Legal fees (a fee charged by your selected lawyer to conduct the Due Diligence)
If you should require a mortgage, you should calculate an average of 1- 1.5% cost for the set up fee of a mortgage with a local Spanish bank.
As a foreigner you can apply for a mortgage in Spain. The rates can vary depending on your nationality and your choice of bank. Talk to us or your lawyer about advice.
Alternatively you can also apply for an extra mortgage on your current property in your home country.
Should the vendor be a non-fiscal resident in Spain, it is the buyer´s duty to pay 3% of the purchase price to the hacienda. This amount should be deducted from the purchase price, hence the buyer does not pay any extra fees.
We will be happy to help you find the best financing solution that suits your situation.
RUNNING FEES FOR A PROPERTY IN SPAIN
When owning a property in Spain there are some fees that apply; such as communal tax, property tax and costs for disposal of garbage. For every property we will provide the full information, as the fees can vary due to the size of the property and also from one municipality to another.