Buying Property in Spain

 

 

As in any other country, research is the first step to buying property in Spain. Take time to explore your options, look around and talk to expats who already own homes in the country to find out more. It is best to research online, in books, in magazines, or visit property exhibitions and talk to real estate agents before you get to Spain. When you arrive take a place on rent while you look around and compare properties.

Outbound Publishing's World of Property, a quarterly publication containing many property listings for sale in Spain (and other countries) and internet resources are some good sources of information for prospective buyers. 

From holiday homes to typical Spanish country homes and everything in between, Spain offers a variety of options to property buyers. A cortijo, a masía or a pazo (typical country house) is the most popular buy for most expats seeking to set up home or run a small hotel in Spain.

Estate Agents in Spain

To find an estate agent look under Inmobiliarias in the local yellow pages. A number of Spanish estate agents have English speaking staff. Agents are known to advertise in newspapers, magazines and have their own websites. Expats from the UK and Germany are known to use agents in their own countries who work in conjunction with Spanish agents. Take a look at the agent's license and registration number to gauge his authenticity. Better still get a friend or colleague to recommend someone reliable. Agent's fees are not regulated by government controls and are usually around 5-10% of the sales price and must be paid by the buyer. 

Legal Advice

Do not venture to buy a property or pay anything without consulting a lawyer first. Spain has a number of qualified legal professionals but do remember to ask friends and colleagues to recommend someone reliable instead of choosing someone yourself. Ensure that your lawyer is a member of the provincial lawyer's association (Colegio de Abogados) - membership of which is compulsory. 

Costs Likely To Be Incurred

Buying property in Spain attracts a variety of fees which usually add up to 10% more than the purchase price. Most of the fees are calculated as a percentage of the declared value of the property.

The fees payable when buying a property in Spain may include the following:

• Transfer tax (resale properties only)

• Value added tax and legal document tax (new properties only).

• Land Tax

• Legal Fees

• Notary's fees

• Deed registration fees

• Surveyor's fees

• Selling agent's fees

• Utility fees

Usually most taxes are paid by the buyer except land tax (plus valía) and the selling agent's fees.

Process & Contracts

The process of buying property in Spain begins signing of a preliminary contract (contrato). There are two main types of purchase contract one of which is a standard purchase contract or private purchase contract (contrato privado de compraventa) and is binding on both parties and involves the payment of a deposit. The other is an option contract (contrato de opción de compra) which is not a binding purchase contract, but a deposit must usually be paid, which you lose if you withdraw from the purchase. You may sign a ‘reservation contract' (documento de reserva), where you pay a small ‘goodwill deposit', e.g. 1,000 to 5,000 euro, which usually secures a property for a period, e.g. 15 days, before you sign the main purchase contract.

In case you are buying resale or newly built property you usually pay a deposit (called an arras, depósito, fianza and reserva, but usually referred to as a depósito) of 10% when signing the contract (negotiable), the balance being paid at the completion.

The deposit is refundable under certain conditions only. All contracts of sale usually contain certain conditional clauses which if not met can result in annulment of the sale. 

Completion is the signing of the final deed and is usually done 60-90 days after signing the contrato. 

Completion involves the transfer of ownership legally, payment of balance amount and other payments towards notary's fees and registration as well as signing of the deed of sale. 

It is necessary to consider tax and inheritance consequences for those in whose name the deed will be registered and carry out final checks on the state of the property before registering the title deed. 

The last stage in the entire process is the signing of the deed of sale in the notary's office. Expatriate buyers require a ‘foreigner's identification number' (número de identificación de extranjero/NIE), which must be presented at the signing of the deed or within 30 days. The notary checks whether all the conditions contained in the contract have been fulfilled before the deed is signed. It is customary for all parties to be present when the deed of sale is read, signed and witnessed by the notary. If someone is unable to attend in person he or she can give someone power of attorney to represent them.

Use of a banker's draft or bank transfer must be made to pay the balance of the price. Just in case both the seller and buyer are both foreigners, they may arrive at a consensus that the balance can be paid in any currency and payment can also be made abroad. At the time of signing the deed of sale, parties to the contract are required to declare that payment has been made in the agreed foreign currency, in which case the payment should be held by a lawyer in the seller's or buyer's home country.

After signing the deed of sale, ensure that you have adequate copies for your own record as the original papers will be filed in the notary's office. The notary produces a certified copy of the sale at the property registry office (Registro de la Propiedad) and becomes an escritura pública.

 

 

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