Buyers Guide to Purchasing a Property in Spain

Below is a guide to purchasing a property in Spain, we advise Clients to have an independent English speaking lawyer, this we can advise you on. If you have any questions on the process of purchasing a property, please do not hesitate to contact us, we have been in the property business in Spain for 15 Years.

Purchasing a Resale Property.

When you have decided on a property you wish to purchase you will be asked to sign a reservation contract and put a small holding deposit on the property, this takes the property of the market and fixes the price. We would suggest that this holding deposit is placed in the lawyers client account until he has checked the contract and done his searches. For this he will need a Nota Simple from the Land registry.

The lawyer will also ask for the last IBI bill this is from the local town hall and is the equivalent to rates, the last community bill if this applies and also the last Water, Electricity, Gas and Telephone bills so he can make sure they are paid. Once the lawyer is happy you will need to make the deposit up to 10% this normally is within 10 days and sign the purchase contract, this is none refundable should you not proceed with the purchase. However should the vendor pull out he is liable to refund you double your deposit, thus avoiding gasumping.

Completion is an agreed date between the purchaser and the Vendor normally 30 to 60 days from signing the purchase contract, on that date you or your legal representative must appear at the notary to complete the purchase and sign the Escritura. You will be expected to pay the balance of the purchase price plus 7% transfer tax and around 1.5% for Land registry and Notary fees on top of the purchase price. Normally the vendor has to pay the Plus Valor tax unless stated and also if he is a non-resident 5% of the purchase price will be retained by the Notary towards the vendors Capital Gains Tax.

Purchasing a New Build Property

Should you wish to purchase a property from a developer who owns the land, then the land and the build is under one contract and you would do the same as above and put down a holding deposit, engage a lawyer who would check that the land is owned by the developer and that he is allowed to build what he says he can and that there are no debts on the land. If this is OK then you will be expected to sign a contract and pay in stage payments as the construction progresses ( each developer will have different stage payments ).

On completion the lawyer will make sure that all the paper work is in order and that he has the final certificates from the architect and the local town hall. Again on completion you will meet with the constructor in the Notary to complete the purchase. The taxes you pay on a new build are similar to that of a resale property, there is 7% IVA ( VAT ) this is collected at each stage payment, there will be Land registry and Notary fees around 1.5% to pay and a duty of 0.5%.

Should you purchase an individual plot where the owner is not the builder you would be expected to complete on the purchase of the plot first as a resale above. The tax on this depend on who the owner is, if it is a private person then the tax is 7% but if it is owned by a company then the tax is 16%. Once the plot is purchased you can then build and this will be paid in stages as above.

We can help you with Lawyers, Architects and Builders.

Should you have any questions please do not hesitate to Contact Us.