Buying a Property in Spain
After you have contracted the services of a Spanish Lawyer (See section: Important Steps Before You Buy A Property In Spain) ) the process guidance will be the following:
01 > Reservation Contract
This takes the property off the market for a temporal period of time. A minimum of 4 weeks would be needed as during this time your lawyer can make all the necessary checks on the property before you sign or make any other payment.
The reservation fee is is typically between 3.000 to 6.000 euros.
It is very important to check this contract by your spanish lawyer, as if you do not proceed because of a legal problem you should be contractually entitled to the return of your deposit, but if you don´t go ahead because you have changed your mind you will lose the deposit.
02 > Private purchase contract
It is one of the most important documents in the transaction as will oblige the parties for the future.
This is a full contract to buy the property, which serves to settle all the conditions and agreements accepted by the parties, the buyer should discuss with his lawyer all the agreements in order to have all placed in the contract, otherwise there will be no chance to claim anything that it is not estated in it.
The contract need to have attached the Quality list of building materials to be used and a Drawing plan with the location and measures of the property.
Althought this is not the final contract, which shall be signed before a Notary on a public deed, this one will sett up the responsabilities and the legalities of the process, anything you want to be done has to be settle in the purchase contract, otherwise the chance to claim will be limitated.
03 > Bank garanties
All the payments done to the seller must be insured, the law estate that needs to be done by a bank garanty or a duly registered insurance company, in order to get the return of all money paid in advance plus the legal interest of penalization in the event the developer does not commence the works of the propety on the date scheduled, or in case of non-completion of the property, this is regulated under the LAW 57/68 and the LAW 38/1999 from november the 5th.
If completion does not take place on time, all the damages, costs, rentals.. suffered could be claimed as a compensation for the delate finishing the building works.
04 > Signature of the tittle deeds in front of a public notary
Once the property has been finished or in case of resale property as soon as everyone is ready to proceed, an appointment in the Office of the Public Notary will be needed in order to go both parties and sign the Final Contract/Deed of Sale, this will transfer with public effects the right to ownership to you.
This is one of the most important moment in the process, in the off plan purchases, it will be vital to check that the property it is fully legal finished, that the 10 years insurance garanty it is on place and the Habitation Certificate or First Occupancy Licence it is granted, in the resale properties, would be important to get the last bill from the electricity and water and the Town Hall tax plus other documents to prove that all it is on place.
05 > Land registry
After the tittle deeds signature, some taxes are needed to be payed no later than 30 dates:
(Please visit: Taxes & Cost section for further information)
Once all it is sorted the tittle deeds will be sent to be registered into the land registry office, this will create a fully protection of your ownership against any third parties.
05 > Power of attorney
If you can´t attend in person to sign any of the purchase process phases, we will arrange to make a power of attorney, this could be sign in the UK or in Spain empowering us to act on your behalf in the purchase process avoiding you any inconveniences of unexpected tryps to Spain.
05 > Here you will find all the asociated costs and taxes you will be liable while you are purchasing your spanish property.
We need to make the diference among off plan and resale properties:
+ 7% VAT ——- I.V.A, this is added to the total nett purchase price and it is normally payed on completion time.
+ 1% STAMP DUTY TAX ———- This needs to be payed before 30 days after completion
+ 7% TRANSMISION TAX——— This has to be payed before 30 days after completion, the resale properties has not VAT.
Then there are the general costs that are the same for every property.
+ Title Deeds Costs ——- This is the Notary Fee, the cost will depend of the value of the purchase price, it is roughtly between 400-800 euros, and it is payed 2/3 days after completion.
+ Land Registry Fee——— This is the Register Fee, the cost will depend of the value of the purchase price, it is roughtly between 300-600 euros, and it is payed around 30/35 days after completion.
Important !! Once you own your property in Spain, every non residents would be liable of three taxes every year.