Purchasing procedure

Buy Property in Spain


Resale Procedure
Once you have found your dream home and have agreed on a price with the owner, you reserve the property by paying a deposit, normally 3,000 euros and normally non-refundable. This takes the property off the market at the agreed price. Your lawyer will then commence the process of verifying the status of the property, that the paperwork is correct and all relevant taxes have been paid. This process normally takes 2 weeks. Once the checks are completed and your lawyer satisfied, they will write up a "Private Purchase Contract" between yourself and the seller. The contract states that you agree to purchase the said property from the seller at the agreed price and the seller agrees to sell you the said property at the agreed price. At this stage it is usual to pay a non-refundable deposit of 10% (minus the initial 3,000 euro deposit already paid) of the purchase price. Should you decide not to proceed with the purchase, the seller keeps the 10% deposit. If the seller pulls out of the deal, or accepts a higher offer, he is obliged to return you the 10%, plus the same amount again as a penalty. Should there be a un-rectifiable problem with the property the purchaser is entitled to pull out of the deal with out any penalty.

A date will then be set for completion. In Spain completion takes place in front of the Notary with all relevant parties present, purchaser, seller, lawyers and if relevant bank representatives. The Notary is a state official and is there to make sure your property is officially noted. All finance needs to be in place and final payments discussed with your lawyer as the balance of the purchase price, all related taxes and Notary fees are paid on this day, usually by bankers draft but do not be surprised if you are requested to bring a percentage in cash. In Spain you will be charged a 7% Property transfer tax on all properties (see our Buyers Guide for a full breakdown of expected costs). Your final document will be the Escritura de Compraventa which is the title deed, the property is then registered with the Spanish Property Registry and the Escritura stamped and then returned to the Notary where it is kept safely on file. Your lawyer will hold back a sum of money to cover the costs of this process.
You will leave the Notary with the keys and as owners of your new home.


Plot and build
This process varies to a standard purchase of a resale property or a completed new build as generally there will be a contract for the purchase of the land and a contract with the builder for the construction.

Purchase of land
Once you have chosen your ideal plot, the services of the builder will be engaged in order to quote for the construction cost based on your requirements. At this point, all associated costs such as taxes, notary fees and registrations will also be documented. When you are happy that your fundamental requirements have been achieved, a small deposit will be required to remove your chosen plot from the market place at the agreed price. This is usually approx 6000euros but can vary and is normally non-refundable. Normal purchasing procedure is followed from this stage e.g. 10% of purchase price to be paid after 2 weeks once the paperwork has been checked by your lawyer. Private Purchase Contract signed and completion date agreed. See Resale Procedure. Spanish Transfer Tax on the purchase of land is levied at 16% plus stamp duty, Notary fees and local taxes.

Construction
Every new home constructed is of a unique design tailored to match your requirements exactly so it is very difficult to give you an expected build costs. However, the construction style be it Ibizan, traditional, Marbellan or completely contemporary are very similar in terms of cost. The quotation you receive will not be the cheapest available but it will be competitive and will ensure that the quality of construction is of the highest level. All quotations offered will include the architects fees and municipal licences. Once the quotation for the build of your home has been agreed by yourselves and the builder a payment schedule will be drawn up detailing the stages of the build and the amount of money to be released at those stages. If you require a mortgage for the construction your bank will officially register each stage payment at the Notary. A contract including the detailed quotation, price, build time and payment schedule will be written up to safe guard you from any misunderstanding. Construction tax is levied at 7% plus stamp duty, Notary fees and local taxes.

Please see our Buyers Guide for more information and help on setting up bank account, selecting a lawyer, taxes etc.