When considering purchasing a property in Spain, the very first thing to get straight is your budget. On top of the actual asking purchase price you need to allow approximately 13% in purchasing fees for Notary, Land Registry and Legal Fees :-
10% IVA/Transfer Tax
1% Legal Fees (Estimate)
1.6 % Land Registry Fees /Notary fees
If you require a mortgage, an additional 1-2 % of the loaned amount is also payable.
Once you have found your property, a deposit of €3000-€6000 is usually paid. This takes the property off the market. We strongly advise seeking independent legal advise at this stage.
Your lawyer will obtain a document from the Property Registry (Registro de la Propiedad) and here details of any debt outstanding relating to the property is found. It also tells you who the legal owner is and that all descriptions match with the sellers, for example square meter sizes. The initial deposit must be returned to you if your lawyer is unhappy with anything.
When you are satisfied, a private purchase contract is written up between the buyer and the seller and a 10% deposit is paid. It is usually a simple document in which the seller expresses their intent to transfer the property to the buyer. The buyer expresses their intent to buy at a set price and conditions agreed upon. Usually at this stage if the buyer backs out of the contract, they lose the deposit. If the seller backs out, they have to pay back double.
Within this contract there will be a date of completion. In order to finalise the transaction your lawyer will arrange a date with the Notary. Then, if all in order, all parties sign the Escritura (Deeds).
The Notary is a Public Official. His signature is required to ‘elevate’ the private contract into public deeds which can be inscribed in the land registry.
If you are unable to attend the Notary, arrangements can be made for a Power of Attorney to be granted enabling another person to attend on your behalf.
Anyone purchasing a property will be required to obtain an NIE number. This a tax identification number and is required by law in Spain. This is for every individual who is working or residing in Spain. It can be easily arranged but be aware that every town has a different method and we recommend seeking advice once in the area of your choice.
It is also necessary to open a Spanish bank account. This is a very simple process. The only requirement is a valid passport and an initial deposit. Most banks have English speaking staff and internet banking facilities. Your lawyer will then instruct all utility bills to be paid by direct debit from your account.
Yearly Running Costs
IBI (Local Rates)
Refuse collection, road maintenance etc. The amount payable is dependent on the area and meterage of the property and far less than the Uk Council Tax.
If your property is on an Urbanisation, there is a fee for general maintenance of the swimming pool, grounds, lighting and admin costs. Approximate fees are between €400 – €700 per annum.