Buying a Property in Spain
Choose a property and put down a deposit
Your lawyer will hold the deposit for you, which is typically between €3,000 and €6,000. He will also undertake "due diligence" (legal checks) on the property, and your money will only be passed to the vendor once completed and at your instruction. (We can recommend English-speaking lawyers who specialize in property conveyancing if you don't already have one.)
Arranging the mortgage
At this point there's normally a "private purchase contract", which covers any payment made to the vendor that's outside of the amount of the mortgage (again, unless you're buying with a 100% mortgage, or making an outright purchase). You'll do this within two weeks of paying the reservation deposit, and everything can be handled by your lawyer; you just need to give him a power of attorney.
Receive your title deed and keys
Your lawyer (with power of attorney) will sign for your title deeds at a notary, which will then forwarded to the Land Registry to be recorded in your name. (After ensuring that there are no outstanding charges on your property.) Finally, your lawyer will help you in getting your utilities connected up and - if you've bought on a development - with formally meeting your community of owners.
It's now simply a case of receiving your keys!
Buying Costs
Allow 10-12% of the purchase price to cover costs. Here's an approximation of how the fees break down:
- Legal Fees(around 1%)
- Notary & Land Registry (1%)
- Stamp duty: only for new properties (1.5%)
- IVA (VAT) on new properties (8%) (On selected developments IVA will only be 4% until the 1st January 2012) – Transfer Tax on resales (7-8%)
- Mortgage commission: Varies (if you buy with a mortgage, there may be some additional notary/registry fees and stamp duty)
The Costa del Sol has seen prices drop by similar margins and there are some real opportunities out there with savings of over 50%.
