General aspects involved in the purchase process

The purchase process has three basic steps: Reservation of the property, signing of the Private Contract and Completion.

RESERVATION OF THE PROPERTY

Before reserving the property chosen by you, we will carry out all the necessary searches and investigations with the relevant authorities in order to ensure that it satisfies all the necessary legal conditions and is free from free from any charges, debts or pending amounts.

Once everything has been checked we can complete the first stage, the signing of the reservation document with the developer or private owner, so that the property is taken off the market. This will involve the payment of a holding deposit, which is normally €3.000, but may be greater for higher priced properties.

PRIVATE CONTRACT

All searches are complete and we are absolutely certain the property is legally declared in the best conditions. The terms and price have been discussed and agreed with the seller. We can therefore draft a Private Contract and have it signed by both parties. This document sets out all the details of the agreement, payment terms and completion date.

COMPLETION

Completion on the purchase takes place in the presence of a Spanish Notary. It is the Notary’s duty to certify that the Title Deed (Escritura de Compraventa) has been signed and that the purchaser and seller have been advised of their tax obligations. By the Notary’s signature it is certified that all legal requirements are in place and that the completion money is paid to the vendor.

PAYMENT OF TAXES AND REGISTRATION OF YOUR PROPERTY

By this stage you already own the property, but the new ownership must be duly registered at the Land Registry office so that you appear as the new legal owner. Now, we clear the taxes on your behalf and apply for registration. The Land Registry will complete the necessary procedures and return your registered Title Deed within a period of one or two months.We then collect the Deeds for you and keep them secure until your next visit.

UTILITIES

We set up your utilities(electricity, water etc.), changing to a new name or contracts. We inform the local administration of these to enable the payment of annual taxes and direct debits.

We also inform the bank where you hold your Spanish account to authorise these payments.

INSURANCE

We can also arrange for your home insurance to cover the risks related to the property. We recommend Liberty Seguros, as they have full expatriate services, a multi-speaking call-centre and all contracts in English.

REMINDAL OF COSTS INVOLVED IN PURCHASING A PROPERTY

Remember that there are 3 fees and 2 or 1 taxes to pay when purchasing property in Spain. As a rule of thumb, you should budget the combined total of these amounts will be around 11% – 12% of the purchase price without mortgage and 12% – 13% with mortgage (all included).

The fees are as follows:
1) Solicitors Professional Fees: Included
2) Notary fees: the scale is fixed by law and may range from €300,- for lower price properties to €900,- for higher priced properties, and depends on the Notary.
3) Property Registry: as a rule of thumb, 70% of what the notary charges.

The taxes:
– Transfer tax (ITP) at 10% (August 2013) when buying form a private owner or VAT (IVA) at 10% when buying from a promoter, developer or habitual trades, plus Stamp Duty (AJD) at 1.5% (C. Valenciana August 2013). The VAT rate of 21% is applicable when purchasing parcels of urban land, commercial premises, or garage spaces.

We would like to thank you for your trust to assist you with your property purchase in Spain.