Spain » The Purchase Process

Investing in Real Estate in Spain is a highly recommended both from personal and investment point of view. Before making any decision about buying in Spain, one must be aware that it could be a hectic process in terms of legal and bureaucratic procedures, but in the long run it would prove to be a wise investment. After choosing the ideal property, the following steps are involved in the purchase process; 

• A reservation fees need to be paid after you have searched your ideal property. This reservation fee ranges from €3.000 - €
• 6.000 (deductible from 10-30 percent deposit of yours). Reservation fee is paid to freeze the price of property plus it ensures that the property is no more available in the market. 
• For the foreign buyers it is highly recommended to apply for an NIE number, right after paying the reservation fee. The NIE number is a foreigners’ ID card number, which enables, him/her to make all the transactions for purchasing Real Estate in Spain, taking a mortgage or opening bank accounts. Most of the times your Real Estate Agent will brief you about the procedure of obtaining the NIE card.
• Appointing a local lawyer is very important; the lawyer will facilitate you about all the major steps you have to take for the purchase process. Another important reason for pursuing a lawyer is the fact that Spanish Laws regarding property purchasing are slightly different from UK and Ireland. Your lawyer will ensure that the property is clear of all debts, mortgages, that the person selling the property is the real owner of the property, the boundaries and legal description of the property are authentic, the building regulations have been followed for the construction of the property, the water and electricity supplies are available etc.
   

 

• The next step involves signing a Purchase Contract, which holds details about the price and payment methods etc. at this step the buyer make the 10% to 30 % deposit of the actual price of property. This document legally bind the buyer to the property, in case of withdrawing from the deal, the buyer will lose all the money which has been paid.
• In case, the property is still under the process of construction, the buyer is needed to pay installments while the construction is going on.
• The full payment is carried out at the time of possessing the property. The deed for the property is signed in the presence of a Notary Public. All the existing mortgages for the property should be cancelled at this time. The amount payable will be directly handed down to the vendor. Previous owner’s outstanding debts and charges can be registering against the property if left un-paid. 
    

Fees and Taxes

Fees and taxes payable during and after the purchase process are;

• Notary is paid 0.5 % of the actual price of the property.
• A land registry fees need to be paid which varies according the area you are buying in.
• When the buyer make the purchase through a developer rather than private individual, 7% of the actual price of the property is charged from the buyer. This tax is generally known in Spain as Impuesto Sobre El Valor Añadido (I.V.A) which equals to VAT (value added tax).
• Stamp duty (AJD) is payable which is 1% of the total price of the new property.
• Lawyer fees will totally depend on the lawyer you have appointed and the property you are purchasing.