Buying A Spanish Property
The actual purchase process
The process of buying a home in Spain is somewhat different from the process we are used to from other coutries. Therefore, we would like to inform you a little about what inequalities you as a customer might notice when buying a home in Spain.
In Spain we arrange private tours on both properties where we are brokers, and properties that are for sale through other brokers.
As a buyer, you should choose a broker and relate to one and the same broker throughout the process, no matter what brokerage company has the property for sale. (There are some exceptions). This because real estate agents in Spain cooperate with most other real estate agents in the area. If you find one you trust, this broker will be able to assist you in purchasing any property in their district.
Having found the perfect property and negotiating the right price, you usually pay a reservation amount until a final purchase contract between the buyer and seller is written.
The reservation amount is usually approx. € 3000, - - € 20,000 depending on the property's price.
During the period from the reservation amount, it is paid until you write a final purchase contract, the broker's lawyer checks all the conditions around the property. If these conditions differ from what you have expected, you are free to withdraw from the trade, free of charge. If everything looks good and is as expected, you will write a purchase contract.
When we reach this point the buyer and seller have finally committed themselves. The time of commitment in Spain is significantly later than it is in some other countries.
If you do not write the purchase contract under this conditions, you will loose the reservation amount that you have paid.
You can waste some money (reservation amount) if you choose to withdraw from one or more agreements.
The purchase contract contains a time of acquisition. Upon the agreed acquisition, both payment and acquisition take place. In Spain, you will meet with the buyers attorney, as well as the salesman and seller's attorney, at the Notarius Publicus. Here the transaction is carried out. Then all documents are prepared and any loans are ready for payment by the bank. The bank is also present at the meeting. At the same time, the Notarius Publicus will do the registration of the deed.
Usually this meeting will take place approx. 1-2 months after the purchase contract has been signed. The agreed acquisition date can of course be later than such a minimum period. However, it is common for a contractual acquisition within 3 months of the contract being written.
The buyer will be handed out keys and a copy of the joint for the property. The loan is paid and the seller receives the remaining payment on the property, there and then at the notary. (Completion of settlement.)
You as a buyer must be prepared to document where the money comes from. (Bank loans, savings, etc.). Spaniards have become much stricter when it comes to black money after the financial crisis. Even Spanish authorities want the end of black money.
It is not uncommon for neither the seller nor the buyer to attend the notary but that both are represented by a lawyer by proxy. It may be inconvenient to travel from an outside country into Spain to be present at the takeover. In these cases, it is possible to give a Power of attorney to your broker, your attorney or others.
If the buyer withdraws from the agreement after the purchase contract is written, he will loose the entire amount he has paid. On the Costa Blanca, buyers pay almost 3,000 euros in deposit, (both new and used properties). In Majorca and Costa del Sol the amount is often somewhat higher. If the seller correspondingly withdraws from the agreement, he must repay twice the amount paid. This happens from time to time in Spain.
New built properties in Spain are usually marketed without IVA. IVA for new buildings are at the moment 10%. The reason why this is not included in the price, is the chance for changed percentage from the Spanish authorities.
In addition to the purchase price, there is a document / stamp fee for the state of 10% (ITP, Impuestos Trasmisiones Patrimoniales) and the fee of the notary, attorney and the property register. In total, the cost of purchase in Spain is 11-14%. This is significantly more than it is in several other european countries. Remember when you buy to think that everything is 15% more expensive than the purchase price! Due to tax rates, costs are even more expensive when buying expensive properties.
What you need to buy a property in Spain
Spanish bank account / bank loan
We can recommend banks in all the areas where we are represented. We can set up a communication line to the bank when you choose to bid for a property.
NIE-nummer (Numero de Idenficacion Extranjero)
Everyone who buys property in Spain must have a NIE number. This is a Spanish tax number, which is mandatory before joining a property, or buying a vehicle on a non-resident in Spain. (There is very little you can do in Spain without your NIE-Number)
It is fully possible to apply for a NIE number by proxy that you provide to a broker / lawyer.
When you are in Spain on a tour, have found the dream house and signed a contract, you usually travel home again. If it is difficult to reach a takeover, you would like to give a proxy to the broker's lawyer before departure. In this way, all papers can be arranged without the customer's presence.