Real-CostaBlanca.comCosta Blanca property finder |
Buy your property in Costa Blanca with Us.
Information to Buy Spanish properties
The Property Buying Process
The buying process is relatively simple although the fiscal and cultural variations between countries make it advisable to get your own independent solicitor for ease and peace of mind.
1. When you find the property you wish to buy, you will be required to pay a deposit payment or reservation fee of around 10% upon signing a private sale contract. The property will then be immediately taken off the market and the price is fixed. If the vendor pulls out of the sale, he is legally required to pay you double the payment in compensation. However, if you pull out of the sale or fail to complete on the date fixed, you will lose your deposit payment.
If you buy off-plan, payments are different and covered as staged payments throughout the development period. Your solicitor will keep you informed as to when these are due.
2. Be sure that the payment is refundable subject to legal checks as to ownership, planning permission, boundaries and legal description of the property.
3. Once the legal checks have been undertaken, the sale is performed before a Public Notary who acts as a legal representative of the State. The Notary checks the legal documents and witnesses the signatures. The final payment is made at the time of sale and this transaction is recorded in the Title Deed (Escritura de Compraventa) signed before the Public Notary.
If you are unable to appear in person at the signing you should give a Power of Attorney to your lawyer to act on your behalf. At this time, any existing mortgage should be cancelled. If you are taking a mortgage with another bank the loan amount will be paid directly to the vendor on completion. Many charges and debts incurred by the previous owner can be registered against the property. If these are left unpaid, it is your lawyer's job to ensure you buy the property free of any debts. Once completion has taken place, certain fees and taxes must be paid. See our Spanish property tax information to find the additional fees to expect during the purchase of a Spanish property.
4. Title deeds are sent to the Land Registry where the transaction is officially registered in Spain.
Initial Costs
As well as the cost of the property, the buyer will be liable for transfer tax (IVA), which at present is 6% on a second-hand property and 7% on a new one, plus 1/2% stamp duty. The property registration office will charge you a fee to change the new deeds into your name. This is usually around 300€. There will also be notary charges for copies of the 'escritura publica'. The charge is on a scale depending on the contract price. In total you should allow 10% of the purchase price for costs. It is often the case that the buyer also pays the sellers fees. Check this at the point of enquiry and it is often possible to negotiate. Banks may also charge an opening commission for mortgage loans.Annual Costs
The local town hall charge IBI which is an annual real estate tax. The previous owner is obliged to give you copies of previous bills. Community charges apply when you buy a property on a community development. These cover things like maintenance, swimming pools, gardens etc. You will also be liable for a wealth tax, payable annually and based on the value of the property and a property owners income tax based on your income from the property. You should clarify these in detail with your estate agent at point of enquiry.