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Buying Overseas. Spain, The Balearics and The Canaries

The Buying Process: Outlined in 10 simple stages!

Buying the property of your dreams in Spain is a relatively straightforward and simple process. To assist you with what to expect at each stage, below is an illustration of the procedure:

  • The most important aspect of purchasing your holiday home abroad is making sure that it meets all of your requirements. Before you start looking, it is advisable that you decide on a budget and location. Having done this, make a list of what a property should have in order for it to become your home away from home.
  • Once you have given this consideration please browse through the properties on our website.
  • Having narrowed down your interests you should arrange to visit the area of your choice. Before departing it is recommended that you contact your bank and advise them that you may need to place a deposit on a property while there.
  • It is advisable that you give yourself no less than 3 days. This will give you time to look at a number of properties and, should you decide to purchase, will also give you time to meet your Spanish lawyer, which you should arrange before leaving.
  • Once you have decided on the property you wish to purchase, you will pay a deposit. This is generally in the region of €3,000 to €6,000. This reserves the property in your name and prevents its purchase by another potential buyer. It also secures the purchase price of the property so you are not affected by any future price increases. In some cases this deposit will be refundable and some not. It is important to ask this question before you pay the deposit. In the event that the seller reneges then, by law, he must give you back double the deposit paid by you.
  • Non-nationals wishing to purchase a property in Spain must by law obtain an N.I.E number. This is a foreign identity number and your Spanish lawyer can obtain this for you.
  • Your Spanish lawyer will carry out searches to check if there are any loans outstanding on the property or anything else that would not provide you with clean title.
  • In essence your solicitor can take control of the rest of the purchase transaction from this point onwards by granting him/her POA (Power of Attorney) should you wish.
  • You will then normally be presented with the contract for signature within 3 to 4 weeks of placing your deposit. On a property that is being purchased off the plans, at this point there is usually the balance of at least 30% of the purchase price due. This may be more depending on the payment plan that has been devised by the developer. You will be given a schedule of payment dates at this time outlining the amounts and days the payments are due until completion.
    Where you are purchasing a second hand property you will discuss and decide on the terms of payment with the vendor before signing the contract.
  • The sale is officially completed when the public deeds of purchase are signed before the Notary, the agreed purchase price has been paid and the purchaser takes possession. The original deeds are retained by the notary to be forwarded to the Land Registry so that ownership can now be registered in the purchaser's name.

Purchase Costs:

Apartment block in the sun

There are a number of costs associated with purchasing a property in Spain. You should include these when deciding what your budget is for purchasing your dream home in the sun.

  • The Notary charges according to a fixed scale which will be decided based on what the purchase price of your property is.
  • Land Registry fees are, as a rule of thumb, generally 40% of what the Notary charges.
  • Tax: On a resale or 2nd hand property you are obliged to pay a 7% Transfer Tax. If you are buying a new or off-plan (in the course of construction) property then you will pay VAT at 7% plus Stamp Duty at 1%. It is important to bear in mind that if you are purchasing land (plots), commercial premises or garage spaces VAT is chargeable at a rate of 16%.
  • Plus Valia is a tax which is levied by the local Town Hall and is based on the location of the property, on the surface area of the land and on the date of the previous title deed. In essence, this is a tax which is payable on the gain made from the price of the property at the time the seller purchased to the price he is now selling at. By law the vendor is obliged to pay this tax but it is common practice for the parties to negotiate as to who is responsible for this payment.
  • Lawyers fees: These will range from 1-2% plus VAT @ 16%

Potential purchasers should allow approximately 10-11% of the purchase price to cover all of their closing costs for their property in Spain. This does not include land, commercial premises or garages. If these are the types of realty you intend to purchase then please allow an additional 9% of the purchase price.