The buying process
Our committed team is here to make purchasing a property in Spain easy and free from worry. At Casas Manuel, we're on hand to support you at every stage of the property-buying journey.
This page will provide helpful tips about what to expect when purchasing a home in Spain.
It's crucial to sort out your finances in advance, to quickly move forward when you find the ideal Spanish home. This not only sets your spending limit but also readies you to act swiftly upon discovering the perfect property.
Keep in mind, when you're considering properties in Spain, to factor in the buying costs, which are about 13% of the property's price. This percentage encompasses all the necessary fees.
- Resale Purchase Tax - Impuesto de Transferencia de Propiedad - 10% as of 05.08.2013. When purchasing a resale property the buyer is required to pay the transfer tax which is now 10% (8% in the Murcia Region).
- New-Build Purchase Tax (IVA) - 10% as of 01.01.2013 (Spanish equivalent to VAT) Payable as part of the payment structure or on completion of the property as detailed in the contract (10% of the declared value of the property).
- Notary Fees - Preparing the Escritura, registering the title.
- Land Registry Fees - To register the property at the relevant Land Registry Office.
- Plus Valia - Tax levied by the Town Hall in accordance with Spanish Law, the vendor is usually liable to pay the Plus Valia Tax. However, on new properties it is paid by the purchaser.
- Stamp Duty - Actos Jurídicos Documentados - Payable when purchasing a New –build property – around 1%.
Initial Steps
After selecting a property and agreeing on a price, it's essential to secure the property with a deposit, typically between 2,500 and 3,000 euros. This payment ensures the property is taken off the market, and the agreed price is locked in.
Following that, a contract is drawn up specifying the date when the final property transfer will occur. This date can vary according to individual needs. If the transfer date is set for more than 4 weeks away, an additional payment, often 10% of the total price, is usually required as a form of guarantee.
Once the initial offer is accepted, the deposit is made, and the contract is signed, the completion of the sale commonly takes between 10 to 12 weeks. During this period, we will coordinate with the legal representatives and organize all the necessary documents.
On the completion day, both buyer and seller, along with their legal advisors, meet at the notary's office. It's at this time that the final balance is paid (Typically with a banker's draft or via bank transfer).
After signing the contracts and exchanging the deeds, you will formally become the rightful owner of your new property in Spain!
Understanding the role of various legal figures such as notaries and solicitors can also significantly smooth the entire process.
Documents Required for Buying Property in Spain - Preliminary Checks
Before proceeding with a property purchase, conducting due diligence is key. The initial documents your solicitor should request include:
- Nota Simple - This is an extract from the Land Registry providing details about the property, such as ownership, property boundaries, and any debts or encumbrances.
- Property Deeds (Escritura de Compraventa) - he deed contains the property description, the identity of the owner, and the property's legal history.
- Latest IBI Receipt - The 'Impuesto sobre Bienes Inmuebles' is a local property tax. The receipt gives evidence that the taxes are up-to-date.
- Community of Owners Certificate - If the property is part of a community of properties, a certificate from the community president or administrator stating that the previous owner is current with all payments is required.
At The Time of Purchase
At the time of transaction, additional documents are required to complete the purchase:
- Contract of Sale (Contrato de Arras) - This is a pre-sale agreement securing the property and setting the terms of the sale (Price, timescale, furniture status etc).
- NIE (Número de Identificación de Extranjero) - This is a foreigner identification number necessary for all foreigners involved in any transaction in Spain. The solicitor will arrange this for you.
- Proof of Payment - This includes bank statements and other documents that prove you have the financial means to purchase the property.
- Mortgage Details - If you are buying the property with a mortgage, you will need a copy of the mortgage contract.
Understanding the Role of a Notary
In Spain, a notary is a public official who plays a crucial role in the legal process of transferring property. They are responsible for authenticating documents and ensuring that both buyer and seller fulfil legal requirements. The notary does not represent neither party and is present to ensure the legality and validity of the transaction. Once the notary has verified the documents and the transaction is complete, they will issue a new deed of sale.
The Function of Solicitors in Property Transactions
While it is not mandatory to hire a solicitor for property transactions in Spain, it is highly advisable. A solicitor will:
- Conduct all necessary legal searches.
- Ensure that the property is free of debts, charges, and encumbrances.
- Help navigate the complexities of local real estate laws.
- Draft or review contracts and ensure that all the terms and conditions are fair and legal.
- Represent your interests and act on your behalf in negotiations.
- Help translate official documents.
- Provide assistance with applications for NIEs and opening a Spanish bank account.
- Liaise with the notary to prepare the necessary documents for signing.
Together, the right estate agent and legal experts turn buying your Spanish dream home into an uncomplicated and pleasurable adventure. From property hunting to signing the deeds, our guidance is your assurance of a hassle-free experience.
Do not be scared! We are here to help you through :)