Guide to Buying

Purchasing Costs in Spain

Apart from the actual cost of a property, you will need to allow 13% of the purchase price, depending on the price of the property, whether it is new or a resale and whether a mortgage is needed or not, to cover the various fees and costs of acquiring a property.

IVA (VAT) on all property purchases at 10% of the contract price and (21% on land).

Legal Fees from 1% to 2% approximately, again depending on the price of the property, Notary and Land Registry Fees are approximately 1%, Title Deed Tax at 0.5% of the declared value.

Reservation Contract

This is the first document you will sign and you will be expected to pay a deposit of 5,000 € reserving the property. The contract acting as a receipt for monies paid with respect of the purchase. It is normally valid for 30 days to give lawyers time to carry out the necessary searches but may be extended to up to 90 days in certain circumstances. (Be aware that according to Spanish law, this will be a non refundable deposit should you withdraw from the sale)

Legal Issues when buying a property in Spain

The solicitor will take care and assist you in all the different steps involved in the transaction. There are many excellent English-speaking solicitors in Spain. Choosing the right solicitor is your guarantee that Spanish legal requirements are met, the property is registered in the vendor's name and that it is free of any mortgages, charges, encumbrances, debts or other liabilities.

Notary (Notaria)

Public official appointed by the Spanish government to witness the signing of all legal public documents. They put on the public record the fact that the title deed recording the sale/purchase has been signed in their presence and understood by the parties concerned. When the Escritura (Deeds) is signed in front of the notary either the purchase price is handed over to the person selling the house or the seller confirms that the money has already been handed over. The original signed document is retained by the notary who will apply for a formal change in the land registry.

Urbanization and Community Fees

Controlled by the committee of owners and covering the running and maintenance costs of shared facilities which can include private roads, drains, lighting, private water supplies, gardens, swimming pools etc. This can be as little as 150 € per year or as high as 1000 € 2000 €

Property Taxes in Spain

The local town hall charge IBI on owned Property (tax Impuesto sobre Bienes Inmuebles), which is an annual real estate tax. This local tax varies and is based on the Catastral value of the property.

Insurances

Fire insurance is compulsory by law when taking out a mortgage. Comprehensive household insurance is available to protect your home and contents. Life insurance can be taken out to guarantee payment of the loan in the case of death.

Telephone

The standard charge for a telephone line installation from Movistar is around 180 €. The line rental and call charges are then payable every two months. However there are now various companies offering low cost calls and ADSL.

Water and Electricity

Utilities have a standing charge and the charges for consumption are in addition to this. The costs are similar to the UK and Ireland.

Tax on Rental Income

Britain and Ireland have a double taxation treaty with Spain. Tax is paid on the declared income from the property and your rental income must also be declared to the inspector of taxes in Britain or Ireland.

Numero de Identificacion Fiscal (NIE)

Foreigner's Identification Number. All non-residents require a NIE. You need to obtain this in person at the foreigners department at the National Police headquarters. Your agent will assist you with the procedure. This number is required before the purchase of any property in Spain.

Plus Valia

Plus Valia tax, this is a tax on any increase in land value from the date it was last sold, this varies from region to region and is normally charged to the seller of the property but may have to be retained by the buyers solicitor to clear this tax.

Frequent Questions

Payment structure for a new property

A deposit of 5000 € will be required to secure a reservation on a property. Staged payments normally deal with the balance of the purchase. After 30 days a payment of between 10% and 50% will be paid. The outstanding balance will be settled on completion once you have inspected your property.

Can prices increase before I get to Spain?

Our prices are updated on a regular basis. However, to avoid large price increases or the disapointment of losing your desired property we suggest that soon after you have decided to buy, you arrange a viewing trip. This puts you in the right place at the right time to secure a property.

Will I receive a Guarantee with my property?

Yes, all New properties receive a 10-year structural guarantee. With resale properties it will depend on the age of the property. For example, if the property is only 2 years old, there would be 8 years left of the structural guarantee. This would be transferred to you.

How safe is my money

You can request bank guarantees to insure your payments. This insurance costs between 1% and 2% of payments insured. You do not need to cover the total purchase price of the property, only the payments made up to the point of completion

How long will I have to wait for my property?

It depends if you buy a new property a key ready property or a re-sale property. You may have to wait between 6 and 18 months for a new property. If you cannot wait, a key ready property or a re-sale property may be more convenient. Generally, new builds are cheaper, have a longer guarantee and you can spread payments over a longer period.

What additional costs can I expect to pay when buying a property in Spain?

To cover all the additional costs of buying a property in Spain we suggest you add 13% of the purchase price of the property depending on its price. This is to cover the 10% IVA (tax) and 3% for legal fees, notary fees and stamp duty. You will also have a charge of approximately 350 € to cover the changeover of water and electricity and SUMA contracts.

Could I buy my new property cheaper elsewhere?

On new properties it is the Developer who sets the prices not the agent, so we can guarantee that you cannot buy the same new property cheaper elsewhere. However, with resale properties we have already negotiated the advertised price to its lowest possible level so that our clients can buy with confidence in the knowledge that we have already done all the hard work for them.