Explaining the Buying Process in Spain
There is no doubt that real estate on the Costa del Sol, and in wider Spain, is a little different to what you are used to in your own country, but rest assured, the buying process has been modified and designed to secure the interests of both the buyer and the seller alike.
At Rollason Estates, if you decide to use our legal specialists, you will be pleased to know they are multi-lingual and will therefore clearly explain every step of the buying process in your own language. They are also registered with the Law Society and fully regulated by them. Their priority is to always ensure your investment is protected legally and financially, so you have total peace of mind and their fees are very competitive.
Once you have found your ideal property and have decided that you wish to move forward with the purchase, a “Reservation Contract” will be drawn up. This is standard legal procedure in Spain and will reserve your chosen property and remove it from the market place.
The Reservation Contract will include the following information:
• Full name of the buyer and the vendor
• Agreed purchase price of the property
• Property address
• Date to sign a “private purchase contract” (explained in detail below)
• Other special conditions (subject to finance)
• The amount deposited by the buyer to reserve the property
This Reservation Contract will reserve your chosen property for a specified period of time whilst your Lawyer conducts the “Due Diligence checks” of the premises. These checks will prove and ensure that the property is free of debt or encumbrances and that there is a clear Title Deed in place.
Should you need Spanish finance for your purchase, at this point in the buying process you will have time to fill out your mortgage application and submit.
At the same time a deposit (normally of 6000 EUR) will be required to secure the property while the “Due Diligence” checks are being conducted. This deposit can be paid either via bank transfer or in cash, and will be securely held by the Lawyer of your choice in their “client account” and later will be deducted from the outstanding purchase price balance. A good thing to note is that this reservation deposit is fully refundable in the event that your Lawyer should discover any legal impediments pertaining to the said property. So, you can relax!
What is a Private Purchase Contract?
A “private purchase contract” is a contract between the buyer and the vendor (equivalent to Exchange of Contracts in the UK). This contract typically sets out the terms and conditions of the contract. The contract will be prepared by your Lawyer and will contain the following:
• A legal declaration from the vendor that he/she is legally positioned to sell the property respectively.
• The exact address and dimensions of the property and its features as set out in the “Referencia Catastral”, Government registration of the property.
• The completion date and hand over day of the keys etc.
• The terms and conditions, as agreed by both the buyer and the vendor.
The Buying Costs Simplified
The buying costs in Spain vary from 10% to 13.5% of the purchase price, broken down as follows:
• 10% IVA (VAT) on new properties
• 8% to 10% IVA (VAT) on re-sale properties, depending on the category
• 1% Notary Fee (a fee to register your title to your property with the Land Registry)
• 1% Legal Fees
• 1.5% Stamp Duty Tax (A tax charged to make all documents legally effective)
• 1- 1.5% for a Spanish Mortgage Arrangement Fee (if applicable) of the purchase price
And at the end you receive the keys to your new Spanish home in the sun!
Rollason Estates can help you with the following:
1. Lawyers – (specialising in all areas of real estate as well as NIE (registration number for foreigners), wills, inheritance, taxes, and litigation)
2. Mortgages – our independent English-speaking mortgage advisors are able to secure you a Spanish mortgage (subject to status and finances)
Additional Services we can help you with:
Here is a list of the most commonly requested services, however we are here to help you with any requests you may have. Rest assured we will direct you to only the most reputable of companies on the coast for the following services:
• Property and Health insurance
• Currency Exchange
• Furniture Packages
• Kitchen Suppliers
• Property Management
• Satellite/Internet services
• Car Rental
• Home Security