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    • Legal guide – Purchase

    To be able to buy a property in Spain, you need:

    • Sufficient funds available to pay the price of your purchase
    • An identification number for foreigners (N.I.E.). A lawyer can assist you in these steps.
    • A bank account in Spain, in order to house the costs of condominiums, electricity, water, local taxes (advised).

    The different steps when you find the property you want to acquire:

    The first step is to make a verbal offer.

    You can try to negotiate the terms and price with the sellers. Your real estate agent will act for you until the terms have been agreed.

     

    Signature of the booking contract

    The signature of the booking contract between the seller and the buyer allows to remove a property from the market.
    At this time you will be asked to pay a reservation deposit on your agent’s customer account or more commonly on your lawyer’s customer account in Spain (recommended). The amount of the reservation deposit is usually €3,000 minimum, in most cases €6,000 (the deposit requested may be higher depending on the value of the property). Your lawyer then starts the legal research on the reserved property (legality and conformity of the property, POS and public register, search for possible debts – register of mortgages – local taxes – co-ownership, etc.) thus ensuring that your acquisition will be done safely. The reservation deposit will be returned to you in case of problems on the property.

    If the seller does not comply with the agreement, he must return the amounts in duplicate. The buyer agrees to purchase the property under the agreed terms and conditions and if he does not fulfil the contract, he may lose the delivered amount.

    Many buyers choose to use a lawyer to help with the sale. If the buyer is not familiar with the purchase process, the help of a lawyer and the guarantee that he offers may be interesting. The lawyer is also responsible for registering the document in the property register.

     

    Purchase-Sell or Deposit Agreement (Compromise)

    The next step in the process is to sign a deposit agreement or a call option agreement. It is normally carried out within two weeks of formal acceptance of the offer. Your lawyer will have completed his research and his investigation into the debts of the property and arranged with the seller the settlement of any existing debt. The deposit agreement or purchase option will reflect all the terms and conditions agreed upon in the offer and sale, as well as a maximum date to sign the deed before a notary. When the contract is signed, the buyer normally pays 10% of the selling price to the seller.

     

    Signature of the deed before a notary and delivery of the keys

    On the day assigned to the signing of the deed, the parties meet at a notary, and the deed of sale is signed. The Notary will give you a copy of the Deed, the original being sent to the Public Registry of the property for registration. The buyer pays the remaining sums to the seller and the seller gives the keys and possession of the house to the buyer.

     

    Registration

    Although the notary sends a fax to the property register to inform of the change of ownership, it is necessary to bring the original documents to the property register for registration within one month from the signing of the deed. You can easily use this service with your lawyer.

    Please note:

    As part of the fight against money laundering, the process of buying a property in Spain must be completely transparent, the banks through which the funds pass, must systematically provide a certificate of origin of the money.
    For future completion properties, any payment made to the seller prior to delivery must be guaranteed by an approved bank or insurance company (Law 38/1999). If the construction is not delivered within the time limits stipulated in the contracts, the buyer has the right to claim the refund of the sums paid as well as financial compensation. In addition, every developer has a legal obligation to enter into a 10-year guarantee that covers any construction defect for a period of 10 years.

    Costs related to the purchase of a property in Spain:

    Propriétés de Revente :

    • The Property Transfer Tax (I.T.P. Impuesto sob re Transmisiones Patrimoniales).

      This tax varies with the purchase price: 8 (up to €400,000), 9% (from €400,000 to €700,000) and 10% above €700,000.

    Watch out!!!

    So far, Andalusia has followed a sliding scale for ITP which started at 8% and rose to 10% depending on sales value. This has now been removed, and a single tax rate of only 7% applies regardless of sales value.
    This change is in effect from April 28, 2021 until December 31, 2021 only!
    Example: Before –> Up to €400,000 = 8%
    €400.001 – €700.000 = 9%
    €701,000 = up to 10%

    NOW %!!!!! 7!

    • Legal fees – legal representation, normally 1% of the property price (+21% VAT).
    • Notary fees, between 500 € and 1,500 € depending on the price of the property.
    • Registration in the property register, between €300 and €1,000 depending on the price of the property.
    • If purchasing with a real estate agent, the sales commission is between 3 and 7% including tax of the sale price of the apartment (generally 5%).

    New properties purchased directly from a developer 

    • 10% VAT (VAT).
    • 1.50% Stamp Tax (A.J.D. Actos Júridicos Documentados). April 2021 to December 31
      2021 Stamp Tax 1,20%.
    • Lawyer/legal representative, normally 1% of the property price (+21% VAT).
    • Notary fees, between 500 € and 2,500 € depending on the price of the property.

    • Registration in the Public Register of the Property, between €300 and €2,000 depending on the price of the property.

    Building lots

    • 21% VAT (VAT).
    • 1.50% Stamp Tax (A.J.D. Actos Júridicos Documentados). April 2021 to December 31
      2021 Stamp Tax 1,20%.
    • Lawyer/legal representative, normally 1% of the property price (+21% VAT).
    • Notary fees, between 500 € and 2,500 € depending on the price of the property.

    • Registration in the Public Register of the Property, between €300 and €2,000 depending on the price of the property.

    Expenses when you own in Spain

    • Local property tax called I.B.I. (Impuesto sob Bienes Inmuebles): Annual payment.
    • Household waste collection (Basura): Payments normally semi-annual
    • Co-ownership or Trustee (cuota de comunidad): Payment normally monthly or quarterly
    • Your electricity consumption: Payment every 2 months
    • Your water consumption: Monthly payment
    • Home insurance: Annual or semi-annual payment
    • Non-resident Tax: Annual Payment
    • If you took out a mortgage: monthly maturities
    • It is recommended and much more practical to pay the above expenses by levy.