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A Guide to Buying Property in Spain

Once you have decided to buy a property in Spain, the process of making a purchase is quite simple.

Before departing to buy a property in Spain, notify your bank that you may need to place a deposit on a property while you are there. When you arrive in Spain, an account at a Spanish bank should be opened to deal with any transaction and transfer of funds.

Prior to purchasing a property in Spain, an N.I.E. certificate (foreign identity number) is required by all non-residents wishing to buy. A Spanish lawyer or legal advisor can obtain this number for you. Select a bank and lawyer who are familiar with the process of buying property and speak your language.

Once you have found the property you wish to buy, an initial reservation deposit (approx. 3.000 Euros) will be requested to secure the property, and remove the said property from the market, prior to a private sale contract (Contrato Privado de Compraventa). The private sales contract will then be drawn up by your lawyer specifying all the relevant details of the property and the parties involved the completion date and the conditions of the transactions, which should usually contain an assurance by the sellers that the property is sold free of charges, tenants and mortgages. At this stage the standard deposit required is 10% of the purchase price, which is payable when you sign the private sales contract. This contract is legally binding by both parties, and there are penalties for breaking it or for failing to honour the terms of this contract.

A sale is formally completed when the public title deeds of purchase (Escritura Pública de Compraventa) are signed before a notary (Notario), the balance of the agreed purchase price paid and possession given to the buyer. Your lawyer will make an appointment with the office of the notary, and the title deeds will be signed in his/her presence. The notary's job is to check that all the paperwork is accurate and to certify that the contract is officially made. If you are present for the signing of the documents, a translator will interpret the details for you, prior to signing. If you are unable to travel to Spain to sign you may decide for convenience to grant your lawyer a power of attorney.

When the title deeds are signed at the Notary, you will become the new owner.

Your lawyer may pay on your behalf the Notary fees, all the relevant transfer taxes associated with the purchase and will handle the formalities of the registration of your title deeds in the Land Registry Office to prevent a mortgage or other charges being registered against the property, while it is still listed in the name of the seller. Your lawyer may also set up the accounts for utility services such as water and electricity.

A Guide to the associated costs of Buying Property in Spain

New properties - 10% IVA (VAT) of declared/registered value.

New properties - 1,5% Impuesto sobre actos jurídicos documentados (IAJD) in Andalucia.

Resale property - 8% Transfer Tax of declared/registered value

Notary Charges - Set on a fixed scale by law, you should expect to pay around 650-800 Euros.

Registration - Transfer of the property title deeds into your name by the Registrar. Expect to pay between 450-550 Euros.

Solicitors Fees - Expect to pay around 1% (plus 21% tax) of the property purchase price. (Some solicitors offer fixed fees).

The approximate additional costs of buying a property for 150.000 Euros, would therefore be:

Resale Property:
8% Transfer Tax............ 12.000 Euros
Notary........................... 800 Euros
Registration................... 500 Euros
Solicitor......................... 1.815 Euros
TOTAL......................... 15.115 Euros

New Property:
10% IVA.......................... 15.000 Euros
1,5% IAJD........................ 2.250 Euros
Notary .......................... 800 Euros
Registration................... 500 Euros
Solicitor......................... 1.815 Euros
TOTAL......................... 20.365 Euros