Buying a property in Spain

Buying real estate in Spain is arranged slightly differently than in England. Is it more difficult? No, not that. However, proper guidance is highly advisable. On this page we explain what you need to take into account and what the correct order is to become a homeowner in Spain.

You naturally have a certain budget in mind when buying your second home or your permanent home. It is important to take the additional costs into account within this budget. These amount to approximately 13% of the property price and cover lawyer/estor and notary costs as well as taxes, stamp duty and property registration costs.

Additional costs of new construction properties

The IVA (VAT) is 10% for residential real estate and 21% for land, garages, etc.

The notary costs depend on the purchase amount.

Lawyer/Gestor costs amounts 1 to 1.5% of the sales price + IVA (VAT)

Stamp duty for the Costa del Sol is 1.2%

Property registration amounts to somewhere between 50 and 70% of the notary costs.

Brokerage commission: 3% – 5%

Additional costs of existing construction

Transfer tax 7%

The notary costs depend on the purchase amount.

Lawyer/Gestor costs amounts 1% to 1.5% of the sales price + IVA (VAT)

Property registration amounts to somewhere between 50 and 70% of the notary costs.

Brokerage commission: 3% – 5%

Mortgage

In most cases, the home is partly financed from your own resources and partly through a mortgage. Mortgages can be taken out in both the England and Spain. In both cases we can guide you throughout this entire process.

The purchase

Once we have found the suitable home, we will initiate the purchasing process. A good order is important here. First, a lawyer/gestor who specializes in Spanish real estate law must be chosen. We have this in-house as well as the accountant. Together they are responsible for the proper supervision of the purchase or sale.

You must then apply for a NIE number. This is an identification number for foreigners that is required for all financial transactions in Spain. This is also necessary to open a bank account and transfer electricity, water, internet, telephone, etc. in your name. We will fully guide you in this process.

If you are not present in Spain during the entire purchase process, it is advisable to appoint a legal representative. This could be your lawyer/gestor or another confidential counselor. He or she will then receive power of attorney to act on your behalf during the purchase or sale process. This power of attorney is signed before a notary and costs approximately €200, excluding IVA (VAT).

The reservation

Once you have found the suitable home, you naturally want to secure it as quickly as possible. You do this through the reservation agreement. You must make a payment into the client account of the lawyer/gestor.

Due Diligence

Once the money for the reservation has been deposited, the lawyer will inform the selling party that he is your representative and will request all necessary documentation from the selling party to verify the following points:

-Is the property free of debts and encumbrances?

-Is the property registered in the property register?

-Does the property have the required permits?

-The legal identity of the buyer or seller

-Does it comply with urban planning laws and has the municipality issued a habitability certificate?

-Have the construction specifications and quality provisions been handed over to the buyer and included in the purchase agreement?

Carrying out the Due Diligence can take approximately 3 to 4 weeks.

The purchase agreement

Once the Due Diligence has been carried out, the purchase contract can be drawn up and signed. The buyer currently usually pays 10% (this percentage may be deviated from in some cases) of the sales price, minus the down payment already paid upon reservation.

After delivery or release of the property, the final deed of transfer is signed at the notary. The remainder of the purchase amount will also be paid upon signing the deed of delivery.

At that point you are the legal owner of the property.

Real estate registration

From this moment on, the lawyer/gestor will take care of the registration of the property in the land registry and will also take care of paying the taxes.

After Sales

In addition to the above formalities, we also take care of the transfers of contracts or subscriptions such as gas, water, electricity, telephone, Association for Owners contribution, taxes, etc.