Higuerón West 217/News
Easy steps to buying a property in SpainJun 25, 2018 Property market
Buying a home in Spain is actually a pretty straightforward and transparent process, and as always, it’s easy when you’ve taken the effort to inform yourself and be well prepared in advance. A good estate agent, lawyer/gestor or experienced friend can help out, but thankfully a lot of information is also available online these days. Here is a brief overview of the main steps in the process.
1. Reservation agreement
Having found a property that is right for you, the first step is to secure your property. This document confirms the rights of both parties in relation to the intended transaction, and on a practical level takes the home off the market and reserves it for you against an agreed upon deposit payable by yourself while you arrange payment or financing.
2. Appoint a lawyer
The next step is to appoint a lawyer. He or she will be the person to check the documentation and ensure that all is in order, a situation that is a lot more straightforward in the case of a new off-plan home than it is with so-called resale homes that have already been inhabited and can have outstanding debts against them. The lawyer will study the developer’s contract on your behalf, checking the property descriptions, specifications and delivery times, as well as the fact that the land is in the name of the developer and that the relevant licenses are in place.
3. Private purchase contract
Once the lawyer is satisfied that all is in order, a private purchase contract will be drawn up for the vendor and buyer to sign. The contract will include a payment schedule from the developer that outlines the amounts payable at the given intervals during construction. These details vary from project to project as also completion times can vary according to the size and complexity of the development in question.
New rules issued by the Spanish Supreme Court in 2016 reinforce the safety of the buying process for consumers, and assert their rights. It stipulates that developers must have bank guarantees in place to protect the funds until completion of the project. Protective measures such as this have further popularised off-plan buying, where the developer may also be able to arrange favourable financing conditions through the banks they work with.
4. Completing the purchase
The Número de Identificación de Extranjeros, known for short as the N.I.E., is a document all foreign nationals living or owning property in Spain need to obtain. Upon completing the final payment stage, you are ready to take full ownership of your new home. The developer will now have finalised construction, landscaping and also completed any communal areas, enabling them to register the properties and receive an occupation licence ready for delivering the homes to their new owners.
5. Registry and Utilities
Once you’ve made the last payment on the property itself, the associated legal fees and property purchasing taxes have to be paid, and upon signing the title deed you will be registered at the Land Registry as the new owner by your lawyer, making you responsible for local rates and taxes, for which along with utilities such as water and electricity you will have to open a bank account and arrange standing orders.
6. Tax rates
The exact property purchase rates that apply depend upon whether you are a Spanish resident or not, and also if you intend to rent out your property or reserve it purely for your own use. This is best discussed in advance with a reputable lawyer or accountant, as being prepared and informed is just as much of an advantage in Spain as elsewhere in the world.
- VAT (IVA) 10%
- Stamp duty 0,5% - 1,5%
- Land registry fees 0,1% - 0,2%
- Notary public fees 0,1% - 0,2%
- Lawyer’s fees 1-2%
- Mortgage & gestoria fees (if finance required) 1-2%
Higueron West is a luxury 21st century living community that offers style, comfort and above all quality of life. Speak to our team and they will be more than happy to inform and advise you, as well as recommend the professionals you need.