 Property Buyers Guide
Your Best Value Mortgages in Spain
Estate Agents
Once you have decided to make a purchase the first step is to choose an estate agent who has knowledge and experience of the property market in Spain in the area of your interest.
Once you have established your requirements, the agent will be able to guide you to the correct choice for your budget, quality, area and purpose.
An experienced and professional estate agency in Spain will be able to offer a first class service with expert knowledge of your chosen areas, They should speak the same language and be able to recommend tried and tested supplementary services, such as lawyers, financial advice and currency exchange.
Legal Advice
Choosing the right lawyer is essential in order avoid any unnecessary problems and is your guarantee and peace of mind that the correct Spanish legal procedure is adhered to. If you do not have your own lawyer, there are many excellent English speaking lawyers in Spain, who will be able to assist you and protect your interests throughout every step of the buying process.
The lawyer will make sure that the property is registered in the vendor's name; it is free from charges, debts or other liabilities (as any debt on the property will be passed on to the new owner).
Although, your estate agent will be working with you on your property purchase, it is your lawyer who will liaise with the vendor to negotiate the completion date, form of payment etc. and will ensure that the timetable of events is adhered to.
Legal Process
Identify a property
Once you have identified the property you wish to purchase, you should at this time employ the services of a lawyer.
Formal Offer/Reservation
Once both parties have agreed the terms of the purchase, a binding agreement is formed.
In Spain it is customary to pay a reservation fee. A reservation fee is generally between
3000 – 6000 euros.
Exchange of Purchase Contracts
Once all the comprehensive legal searches and checks have been carried out and your lawyers are happy for you to proceed, the Private Purchase Contract will be drafted. This will include all the terms and conditions for the sale and will also set the completion date for the transfer of the property. It is usual for a deposit of up to 30% to be paid over at the Exchange of Contracts stage with regard to new properties and between 10%-20% for a resale or older properties.
Property Completion
The purchase of your property is formally concluded when the public title deeds of the purchase are signed before a Notary Public and the balance of the agreed purchase price is paid to the Seller. Should the Seller fail to complete penalties are payable to the Purchaser. (usually, this is the amount paid plus 100%). It is at this stage that you will receive the keys to your new property.
Fees and Taxes Payable on Purchase
In general, purchasers should budget between 10% and 11% of the total purchase price to cover all incidental taxes and charges. Details of these charges are set out below.
Transfer Tax (ITP)
Where the property is a resale property (i.e. not bought directly from a developer) ITP of 7% is payable on the property price.
Value Added Tax (IVA)
IVA of 7% of purchase price is charged on all new properties bought from a Developer, Promoter or a person acting as a Trader of such properties.
Stamp Duty
Stamp Duty of 1% is payable on the property
Notary Fees
Notary fees vary on the complexity of the purchase and the value of the property, an average fee would be approximately 800 Euros.
Land Registry Fees
Land Registry fees are payable in order to register your legal title to the property in Spain. As a guide you should budget for fees at approximately 70% of the rate charged for the Notary fee
Lawyers Fees
Lawyer fees are generally 1% of the purchase price plus IVA.
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