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, and a minimum of 10.000 Euros should be transferred into the account for deposit purposes. Prior to purchasing a property in Spain, an N.I.E. certificate (foreign identity number) is required by all non-residents wishing to buy. We can obtain this number for you. We have banks and lawyers who are familiar with the process of buying property and speak your language.

          When you have found a property you wish to buy, you will be requested to pay an initial non refundable deposit to secure the property of between 5%-10%. If you are purchasing a new property that may still be under construction, this freezes the price of the property so you are not affected by any future price increases. If you find a property that requires a deposit greater than the initial money deposited into your Spanish bank account, you may be able to secure the property with a small holding deposit of around 2%, with the balance of the deposit to be paid within an agreed time of say 10-20 days. A private contract will then be drawn up specifying all the relevant details of the property and the parties involved and this will be signed by the purchaser and the vendor.

          A sale is formally completed in Spain when the public title deeds of purchase are signed before a notary, the agreed purchase price paid and possession given to the buyer. 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 power of attorney. The original signed documents are retained by the notary to be forwarded to the Land Registry (Registro de la Propiedad) to be registered in the purchasers name. The notary does not check the terms but solely certificates that the parties have agreed to them. Prior to signing, your solicitor will carry out the searches on an agreed date and check if there are any charges or encumbrances on the property and that there is a clear title deed. Your lawyer may pay on your behalf all the relevant transfer taxes associated with the purchase and will handle the formalities of registration of your title deeds. Your lawyer may also set up the accounts for utility services such as water and electricity.

A Guide to the Costs of Buying Property in Spain

As a guideline you should add 9-10% to the declared purchase price of the property to cover costs.

Costs of buying a property in Spain are as follows:
New property - 7% IVA(vat) of declared/registered value
Resale property - 7% Transfer Tax of declared/registered value

Notary Charges - Set on a fixed scale by law, you should expect to pay around 450-550 Euros (£280-£345)

Solicitors Fees - Expect to pay around 800 Euros (£500) on a property purchase between 100.000-200.000 Euros (£62,500-£125,000)

Registration - Transfer of the property title deeds into your name by the Registrar. Expect to pay between 250-350 Euros (£155-£220)

The approximate additional costs of buying a property for 160.000 Euros (£100,000), would therefore be:
IVA - 11.200 Euros (£7,000)
Notary - 500 Euros (£315)
Solicitor - 800 Euros (£500)
Registration - 300 Euros (£185)
TOTAL 12.800 Euros (£8,000)
 

          Note: In Spain the declared purchase price is often less than the actual purchase price. Do not be alarmed by the discrepancy. The main reason is to avoid paying the maximum tax payable and is a recognised practice. However, a more unscrupulous contributory factor is down to the exorbitant commission charges applied by many of the selling agents. Generally, the bigger the agent the bigger the commission. Tread carefully, many are now charging between 10%-15% commission for resale property. Ask your agent how much commission they are charging. The normal should be between 3%-6% for resale property. New property prices are set by the developers but the larger agents will agree higher commission payment, with several receiving over 20% for selling new property. Hence the preference of initially offering new property to all new clients.