Buying Spanish property
Axarquia, Costa del Sol, Andalucia, Spain


Once you have decided to buy a property in Spain, to smooth the way, you need to choose an established Real Estate Agent who will assist prior to and after purchasing and a Lawyer for legal advise and help.

Choose the right Estate Agent with experience and knowledge of the property market and area. They will help you to find a suitable property to meet your specific criteria, show you a selection of properties and advise as to the best areas to invest in comparing prices, quality and facilities.

Ask for details of annual outgoings such as electricity bills, water rates, community fees where relevant and local taxes.

When you make a decision as to the property you want to buy, and negotiated a price through the agent, you will be asked to sign a reservaion contract and pay a reservation deposit. This stage takes the property off the market, ensuring that its not sold to another purchaser, and prevents gazumping. You then have an agreed period of time to exchange contracts but before doing so you should seek legal advice.

There are many excellent English speaking lawyers in Spain who will assist you in the various steps from reservation until after completion of purchase. Your lawyer is your guarantee that all Spanish legal requirements are met, that the property is registered in the vendor's name and that it is free from mortgages, charges, encumbrances, debts or other liabilities. Your lawyer will negotiate and discuss the purchase terms with the vendors or their lawyer. The terms will include details of completion date, form of payment and final inventory.

The next step is to evidence the terms of purchase in writing at which stage the lawyers will draw up the exchange contract called the private contract in Spain. It is customary to pay a deposit of 10% of the purchase price on exchange of contracts, which is not normally refundable if the purchaser defaults. Conversely, if the vendor fails to perform his obligations, you will be entitled to the resolution of the contract and claim damages or demand the obligatory fulfilment of the contract. Before your lawyer exchanges contracts he will have completed his searches and investigations in the Land Registry in respect of the property.

Finally, on the day fixed for completion, your lawyer will go to the Notary Public to sign the Title Deed and make the final payment to the vendor who will simultaneously pass over possession of the property to you, handing you the keys. At this stage the sale is completed. Immediately after completion, the notary will fax details of the title deed to the local Land Register to inform them of the identity of the new owner. In this way the Notary and the Land Register act together to protect and guarantee your interests. You will then have to pay the relevant taxes and have the original title deed submitted to the Land Register for registration of your title. Your Lawyer can also arrange for the transfer to your name of utilities and services such as water and electricity and organise their payment through a local bank.

The purchase of a property incurs the following expenses:

  • The Notary Fee, charged according to a fixed scale. Typically this is between 0.1% an 0.3% of the purchase price.
  • Land registry, as a rule of thumb is 40% of the notary fee.
  • Lawyer's fees, typically between 1% and 2% of the property price plus VAT currently at 16%.

  • If buying a re-sale property there is a transfer tax (ITP) of 7%.
  • If buying a new property VAT (IVA) is payable at 7% plus Stamp Duty of 1%.
  • The VAT (IVA) increases to 16% if purchasing lots of land, commercial premises or garage spaces.
  • Plusvalia is a tax levied by the local town hall based on the particular area where the property is located, on the surface area of the land, on the catastral value and on the date of the previous title deed. This tax ranges from a few hundred euros to as much as several thousand euros on larger properties with lots of land. By law the vendor is obliged to pay this tax.

In total the fees and taxes will amount to up to 10% of the purchase price.

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