THE LEGAL PROCESS
In Spain, it's usual to pay a reservation fee to take your chosen property off the market while your offer is either being negotiated or accepted. This ensures that the property is reserved until you exchange contracts with the vendor or developer
Once you have decided on your ideal home, together with our partners we will assist in all the legal and fiscal matters and paperwork, facilitating the procedures of buying a home in Spain.
We strongly recommend you engage a Spanish lawyer who will carry out all the necessary checks on the property and the paperwork.
Resale properties - exchange private contracts
It takes around two weeks to exchange, during which time your lawyer will check the Title Deed, carry out Land Registry checks and make sure that local taxes, rates and utilities are all up to date. The contract will set out the agreed terms of purchase, stating that any outstanding debts must be cleared before completion and whether the purchase is subject to any further conditions or checks. A date for final completion will be agreed at this stage and you'll pay a 10% non- refundable deposit directly to the vendor or developer.
Buying off-plan / in a new development
If the property you're buying is still being built, instead of exchanging private contracts, the developer will provide you with contract. An important detail is a bank bond or insurance certificate. This acts as a simple guarantee that if for any reason the property can't be finished, you'll get your money back.
Your lawyer will make sure this is received before your deposit is handed over. The deposit you pay will vary depending on the development – it can be anything up to 40% of the purchase price. If you're buying a property in a complex, the Title Deed will state what percentage of the communal areas, such as staircases, gardens and pool, are yours. This determines your contribution to the general maintenance costs.
Valuations and Surveys
If you're going to have a mortgage, the bank or mortgage provider will conduct an official valuation giving final approval and the value of your loan.
Final completion at the notary
The next stage is completion. This is when the public title deeds of purchase are signed before a notary (a local government official). If your purchase is financed by a mortgage, the bank's local representative will also be there. At this point, your final payment is made and the property is yours.
Registration
After completion, the notary will fax a note of the title deed to the local land registry office. Your lawyer will pay all the relevant transfer taxes and register your title deeds. Final registration may take up to two months and your lawyer can send you a copy once it's done. Your lawyer can also arrange to transfer accounts with local utility suppliers into your name and organise payment through your local bank.
Fees
Legal fees are normally between 1 and 2 per cent of the purchase price. Notary fees are fixed by law and are based on a sliding scale depending on the amount of land and size of property. Fees usually amount to between 1 and 2 per cent of the declared value of the property. If you have a Spanish mortgage, allow an additional 1 per cent for registering your mortgage and a 1 per cent arrangement fee.
Taxes
Transfer tax (ITP) at 7 per cent of the purchase price on resale properties. If you're buying from a developer, this is replaced by Value Added Tax (IVA) at 7 per cent plus Stamp duty at 0.5 per cent. Added value tax ('Plusvalia') - this is a land tax based on the increased value since the last sale. It's normally payable by the seller but it can be stipulated that the buyer has to pay. That's something for your lawyer to negotiate.
Introuducing a reputable Lawyer
La Vida Estates has an independent panel of reputable Spanish Lawyers who are all multi-lingual and in some cases have offices also in the UK and other European locations. We will be happy to assist and guide you the the entire buying process.