Buying property in Spain: it is paramount to understand the in and out of the buy process

The buying process initially starts with an offer on the property of your choice through your Real Estate Agent. If the offer is accepted, the next step would be to sign a deposit contract with payment of a 10% ( standard) of the agreed purchase price in order to withdraw the property from the market. This contract is a legal document which binds both parties and summarizes the future deal which would be formalized before a public notary confirming timing, costs, etc. After the signature of the deposit document, your lawyer will check all legal aspects of the property in order to verify that there are no charges or encumbrances which could make the deal inadvisable

After the legal due diligence, you must formalize a public acquisition deed before a notary, this legally transfers the title deed of the property into your name. The public acquisition deed will have associated costs: (i) notary fees, based on the purchase price. (ii) land registry fees and (iii) transfer tax. With regard to the transfer tax, you must be aware that the taxes vary from a New Property and Resale Property. The term "New property" means the first transaction from the developer after its construction. If the property is new, you will be liable to pay 10% VATplus 1,5% stamp duty of the purchase price. Resale Property the transfer Tax is on a sliding scale, between 8%-10% of the purchase price.

It is becoming common practice to do a general condition survey of the property before completion, transfer of title at the notary. This is most useful especially with regards to Resale properties, making you aware of current and potential defects before completion.

It is advisable to use the services of a lawyer, he/she will be able to advise you of everything you need to be aware of when purchasing in Spain. Legal fees are usually in the range of 1% plus IVA of the purchase price

If an acquisition is formalized with a mortgage , it is necessary to have in mind that the value the banks place on a property might be different from the actual market price. The average nonresident mortgage is between 60-70%. As with the purchase agreement, the contract including the loan of the money received for buying the property, must be embodied in a deed signed before a Notary. The mortgage deed will incur a cost of notary fees, land registry fees and 1,5% stamp duty based on the mortgage condition.

This is a very basic summary of the purchase process. When buying please check all property details with your Real Estate Agent and associated costs which may vary with your lawyer. We hope that this helpful and wish you happy hunting!
For infomation contact Luis Escuin de Leyva Director Abogado/Lawyer STM Nummos, SL Edif. Sotovila, Plaza Mayor P. N. de Guadiaro, Sotogrand 11311 San Roque T. +34 956 794 781