Buyer's guide
This section describes the process of buying
a property in Spain. For more details on all the financial
transactions and the legal side, please see our Legal Advice
section.
Cost of Purchase
In addition to the cost of the property, you
should allow for all the fees and legal costs to come to approximately
10% of the price of the property. This will cover solicitor's
costs, land registry fees, notary's charges, stamp duty and
VAT. 10% is the maximum, it may well work out less at around
7-8%. A breakdown of all the costs involved is provided below.
Lawyer
It is advisable to employ the services of a
solicitor (abogado). The lawyer should tell you in advance
what his fees will be, typical is 1% of the purchase price
of your property, plus VAT (IVA @ 16%).
Contract and Deposit
Once you have decided on a property, you will
need to make a purchase contract and make preparations for
the deposit to secure the property. The standard deposit is
10% of the purchase price. The deposit is payable when you
sign the purchase contract (Contrato de Compraventa), which
will state a completion date and the conditions of the transactions,
which should usually contain an assurance by the sellers that
the property is sold free of charges, tenants and mortgages.
Once both parties have signed this contract
and the deposit has been paid, you have secured the property.
The contract is binding for both sides, and there are penalties
for breaking it or for failing to honour the terms of the
contract.
Preparation
It is essential to review the important legal
details, your lawyer should check the receipt for the paid
IBI, (the Impuesto sobre Bienes Inmuebles), the annual real
estate tax. This receipt shows the Valor Catastral, the official
assessed value of the property, on which your property owner`s
income taxes will be based.
Check with the local town hall that the receipts
have been paid, if there is an outstanding balance you can
request that this should be settled by the vendor before the
sale is completed, or it can be deducted from the overall
calculation of what you will pay the vendor. If you are employing
the services of a lawyer, he should check all these details
for you.
All property in Spain should be registered with
the land registry (Registro de la Propiedad), where you can
obtain the exact details of the owner, the size of the property
and details of any mortgages, debts or judgements against
the property. Only the persons or company named on the title
deed (Escritura Publica) have the right to sell the property.
You or your lawyer should request the Nota Simple (this is
an extract from the title deeds) from the Registro de la Propiedad
before you buy the property.
The Notary
After the purchase contract has been made (“Contrato
de Compraventa”), the next stage is to complete the
purchase at the Notary`s office. (Notario). Your lawyer will
make an appointment with the Notary, and the title deed (“Escritura
Publica de Compraventa”) will be signed in his presence.
The notary's job is to check that all the paperwork is accurate
and to certify that the contract is officially made. You will
be required to pay the balance of the purchase money, the
taxes and the Notary`s fees.
The Notary charges are collected by the Notary
for preparing the deed and presiding over the signing. The
fee is fixed by law, on a fixed scale depending on the property
value, and whether the property is mortgaged or not. It is
not normally more than 1% of the purchase price (including
16% VAT).
Property Registration
When the title deed is signed, you will become
the new owner, and the final step is to have the Escritura
Publica registered in the Property Registry Office to prevent
a mortgage or other charge being registered against the property,
while it is still listed in the name of the seller.
Legal Advice
Please see our Legal
Advice section for more information.
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