TERMS OF PURCHASE FOR BUYING A SPANISH PROPERTY

When you buy apartments in Marbella, Marbella villas or any property for sale in Marbella, the process is the same and we recommended that you to read the following. It is advisable to seek the assistance of a lawyer as early as possible in the purchase process. legal advice to buy Spanish property. There are similarities in the way the property purchase is handled in Spain and in your home country but there are also areas with important differences.

PROPERTY CONTRACT

When you have found your dream property in Marbella or in the Costa del Sol. The first thing to do is a reservation contract between the vendor and the buyer and put a reservation deposit on the property which normally is between 5.000 – 10.000 Euros. In about 8 - 10 days the private contract of the sale (Contrato Privado de Compraventa Privado) will be written and controlled by your lawyer. This private contract includes the conditions regarding the price of the property, the date for possession, the Nota simple control, the distribution and costs between buyer and vendor, the specifications of the property and any furniture and equipment included.

Furthermore, the contract normally has some conditions concerning compensation to either the vendor or the buyer if the deal does not go through as a result of circumstances attributed to one of the parties. The vendor and the buyer will sign and a deposit of approximately 10 % of the purchase price is paid, including the reservation deposit?

THE DEED OF CONVEYANCE

The private contract is an important document since it creates the basis for the subsequent drafting of the deed of conveyance (Escritura Pública de Compraventa) which is your ownership document. The deed of conveyance for a Spanish property is drafted by your lawyer and signed by both parties before a Notary. If you cannot be present at the signing of the deed of conveyance you can issue a power of attorney to a representative (your lawyer).

FINAL PAYMENT OF A SPANISH PROPERTY?

The signing day of the deed of conveyance the buyer will pay the rest of the purchase money to the vendor, who hands over the keys and the documents of the property to the buyer. Normally it will be possible to finance part of the purchase price. For more details please refer to the section Finance / mortgage for a Spanish property.

Costs associated with buying a new home from a developer(or bank)

These are the costs you will face when buying a new home in Spain from a developer or bank. It doesn’t matter how long ago the property was built. To count as a new home it must never have been sold before.

VAT & Stamp Duty (IVA & Actos Jurídicos Documentados – (AJD)

These taxes apply for residential properties being sold for the first time (never previously occupied), or for commercial properties and plots of land. This is a national tax, so VAT is the same wherever the property is located (with the exception of the Canaries, which have their own version of VAT).

At present VAT (known as IVA in Spain) is 10% on the purchase price of residential properties (villa, apartment, etc), and 21% for commercial properties and plots of land.)

The Stamp duty (known as AJD)is 1% of the price of the purchase, but might go up in some regions, so be sure to check on the latest rate. Both VAT and Stamp Duty are paid by the buyer, and if any deposit is paid before completion of the sale, such deposit will be subject to VAT at the moment of payment of this deposit. In this scenario there is no transfer tax to pay.

Costs associated with buying a resale home in Spain These are the costs you will face when buying a Spanish property that has been sold before. Generally speaking, that means when buying a home from a private individual.

Spanish Transfer Tax (Impuesto sobre Transmisiones Patrimoniales – ITP).

This tax applies if the property is deemed to be a second or posterior transfer (i.e. not the first time a newly built home is bought), and is paid by the buyer. If any deposit is paid before completion of the sale it is not subject to ITP pro rata. However the full amount of ITP still has to be paid upon completion. In this scenario there is no VAT to pay, and stamp duty is already included in this tax.

The Transfer Tax rate is ceded to the autonomous regions, who can choose to apply the general rate, or their own rate.

The general (national) rule of ITP is 7%, but many of the autonomous regions have applied higher local rates. The rate you pay depends upon the autonomous region where you buy.

Income tax provision when buying from non-residents.

If the seller is not resident in Spain, the buyer has to withhold 3% of the purchase price and pay it to the tax authorities (application form 211). If this is not done the property will be considered by the tax authorities as the asset backing the capital gains tax liability of the seller. This condition is very unlikely to apply when purchasing from a developer..

Costs associated with both new build and resale property purchases in Spain These are the additional expenses you are likely to face when buying any property in Spain, regardless of whether the property is new or not. Legal Fees.

You are strongly advised to hire a lawyer to help you during the buying process. Your lawyer drafts and reviews contracts on your behalf and can explain all the legal and administrative issues you face. Your lawyer should also carry out any necessary due diligence (checking ownership claim of the seller, charges on the property, permits, etc.) and arrange all the required documents to complete the process (property registration, tax payments, etc.).

A lawyer – Abogado in Spanish – will charge you according to the service you require. This will vary according to the complexity of the purchase. Many charge around 1% of the purchase price in legal fees. Be warned that some lawyers charge 1.5% or more of the sale price, which is a rip off. Even 1% can be unreasonably high given the work that is involved in a straightforward purchase of an expensive property with no legal complications. Your best option is to try and find a good lawyer who is prepared to charge on an hourly basis. Legal fees for a purchase without any complications and charged on an hourly basis should be in the region of 1.000 to 2.500 Euros.).

Spanish mortgage costs.

If you choose to buy with a mortgage then this will incur several additional costs. First there will be the property valuation that the mortgage provider will require before granting the mortgage. This is paid for the by the buyer and can cost around 500 Euros. Then there will be the costs of the mortgage itself. This varies according to the provider, and even according to the particular branch. However there is usually some kind of opening fee of around 1% of the value of the mortgage. Finally a mortgage will increase the Notary expenses..

Spanish notary costs.

Notary expenses are nearly always paid by the buyer and are calculated in relation to the purchase price declared in the deeds of sale. To be on the safe side you should calculate Notary fees as being 1% of the purchase price declared in the deeds of sale. In many cases however Notary fees are more like 0.5% (or less) of the price declared in the deeds..

Spanish Land Registry Inscription Fees.

Expenses related to inscribing the sale with the land registry are also nearly always paid by the buyer, and are calculated in relation to the purchase price declared in the deeds of sale. To be on the safe side you should calculate 1% of the purchase price declared in the deeds, though once again it depends upon the property and the area, and the fee could be considerably lower..

 

Property Search

Your Marbella property search
starts here.

Area:

Type:

Budget:

Ref:

 

SHARE:

 

VIDEO OF THE MONTH

Have a look at our selected Spanish Property of the Month.

 

Featured Property

Location: Casares
Price: € 1490000

We are delighted to present this Magnificent Villa to the m.....

See this Property Casares >>>

Property of the Month

Location : Los Flamingos
Apartments Price : € 435100

Urb. Tee 5 Los Flamingos, Los Flamingos Golf Resort, Benahavis Luxury and spacious apartment, conte.....

See this Property at Los Flamingos>>>

 

Contact Us

Name

Country

Email

Telephone

Message

Please tick this box if you would also like to receive our email newsletter

 

Your Dream Home

 

Luxury Frontline Beach

Location : Marbella
Price : € 14900000

///SOLD///SOLD///AN ARCHITECTURAL MASTERPIECE ON MARBELLA´S BEACHFRONT Rio Verde Playa is one of th.....

See this Property at Marbella>>>

Property Costa del Sol Elviria Property Puerto Banus property Estepona property