Always use an established real estate
agent.
This is important to ensure that you get professional
advice regarding the purchase process, but also to ensure that
you buy a property that is likely to hold its value even if the
market goes down, as it did a few years ago.
Local markets are very temperamental which means you should look
for different real estate agents based in the areas that interest
you.
How Do I Buy?
To purchase property in Spain is as easy as
anywhere else in the world. As it might be different from what
you are used to at home, you should always use a lawyer right
from the outset. The extra fees incurred are cheap insurance against
possible future problems. The following is an example of a standard
property purchase procedure.
Reservation Agreement
Normally the purchase is initiated with a
reservation agreement, which takes the property off the market.
The deposit to pay at this stage could be anything between 600
Euro - 10% of the purchase price.
Normally it is 1% and the agent holds this amount in a client
account. Now your lawyer will begin a search of the property,
which will show if there are any charges against it.
Private or Option?
Within a week or two a private agreement or
option is signed between the purchaser and seller and at this
stage it is normal to pay 10% directly to the seller.
The seller and buyer's lawyers, together with the agent, should
determine all outstanding debts and rates in order to arrange
the payment of these according to the agreement. These could be
property tax (I.B.I.), community fees, telephone, electricity,
water bills, etc.
Title Deed
Usually 30 to 45 days after the reservation
agreement, the completion takes place in front of a notary, who
issues the title deed, or “escritura”. If the purchase
is financed with a mortgage the bank representatives are present
in order to pay and sign the mortgage. The title deed should then
be registered by the lawyer in the corresponding Property register.
Notary and Registry
The law states that the seller should pay
a part of the notary fee and what is known as "plúsvalia
municipal". All other costs are to be paid by the buyer.
In most sales it is agreed that all costs are paid by the buyer.
This is more practical as he will probably remain here and it
is likely that the seller may leave the country. The lawyers charge
around 1% of the purchase price, but a minimum of 900 Euros.
Notary and Registry cost
The cost for Notary and registry for a property
of:
60.000 is approximately 700 Euros.
150.000 is approximately 1,200 Euros.
300.000 is approximately 1,900 Euros.
Plus Valia Municipal
This is a council tax that is paid each time
a property changes hands. It is complicated to calculate. Basically
it depends on the property’s tax value and how long it has
been owned by the seller. It usually is approximately between
300 Euros & 1,800 Euros.
Transfer TAX or VAT
Depending on the party's legal status and
the type of the property, there is a 7% transfer tax or 7-16%
V.A.T. (I.V.A.). As follows: On first hand homes, you pay 7% V.A.T.
+ 0,5 % Stamp-duty. On second hand homes, you pay 7% transfer
tax. On villa plots from the promoter, you pay 16% V.A.T. + 0,5%
Stamp-duty.
