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 typically between 3,000 to 6,000 euros.
It is very important to check this contract with 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.
It is one of the most important documents in the transaction as it 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 everything stated in the contract, otherwise there will be no chance to claim anything that is not included in it.
The contract needs to have attached the quality list of building materials to be used and a drawing plan with the location and measurements of the property.
Although this is not the final contract, which shall be signed before a Notary in a public deed, this one will set up the responsibilities and legalities of the process. Anything you want to be done must be settled in the purchase contract, otherwise the possibility to claim will be limited.
All the payments made to the seller must be insured. The law states that this must be done through a bank guarantee or a duly registered insurance company, in order to ensure the return of all money paid in advance plus the legal interest as a penalty in the event that the developer does not commence the works of the property on the scheduled date, or in case of non-completion of the property. This is regulated under Law 57/68 and Law 38/1999 of November 5th.
If completion does not take place on time, all damages, costs, and rentals suffered could be claimed as compensation for the delay in finishing the building works.
Once the property has been finished, or in the case of a resale property as soon as everyone is ready to proceed, an appointment at the Office of the Public Notary will be required for both parties to attend and sign the Final Contract/Deed of Sale. This document will publicly transfer the right of ownership to you.
This is one of the most important moments in the process. For off-plan purchases, it is essential to check that the property is fully and legally completed, that the 10-year insurance guarantee is in place, and that the Habitation Certificate or First Occupancy Licence has been granted. For resale properties, it is important to obtain the latest electricity and water bills, the Town Hall tax, and other documents proving that everything is in order.
After the title deeds signature, some taxes need to be paid no later than 30 days:
(Please visit: Taxes & Costs section for further information)
Once everything is sorted, the title deeds will be sent to be registered in the Land Registry Office. This will provide full protection of your ownership against any third parties.
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 can be signed either in the UK or in Spain, empowering us to act on your behalf during the purchase process, avoiding any inconvenience or unexpected trips to Spain.
We need to make the difference between off-plan and resale properties:
Off plan:
+ 7% VAT — I.V.A. This is added to the total net purchase price and is normally paid at completion time.
+ 1% STAMP DUTY TAX — This must be paid within 30 days after completion.
Resale:
+ 7% TRANSMISSION TAX — This must be paid within 30 days after completion. Resale properties are not subject to VAT.
Then there are general costs that apply to every property:
+ Title Deeds Costs — This is the Notary Fee. The cost depends on the value of the purchase price; it is roughly between 400–800 euros and is paid 2–3 days after completion.
+ Land Registry Fee — This is the Register Fee. The cost depends on the value of the purchase price; it is roughly between 300–600 euros and is paid around 30–35 days after completion.
Important !!
Once you own your property in Spain, every non-resident will be liable for three taxes each year.
