Buying property in Spain: a guide for ex-pats

Buying property in Spain: a guide for ex-pats – Steps towards your dream home

As soon as you have decided to buy a house in Spain, there are several points to think about before diving in. It is also important to have a detailed plan, illustrating all necessary steps, that are needed to be taken in account, in order to fulfil your dream of having your own property under the Spanish sun. That is why we at VIDA del SOL are sure that the more relevant information you have the better! We believe this is the only right path to a safe and successful purchase.

You may have an idea about your possible budget, however you have to keep in mind that apart from the price indicated for all the properties (and this is not only at VIDA del SOL) there will be extra costs around a maximum of 13% for matters like VAT, notary and legal services, stamp duty and the Land Registry. More detailed information you can find below.

Mostly one chooses to split the financing of a property purchase between private assets and mortgage. We strongly advise you to check the information about the possibilities of getting a mortgage under the Spanish law because it most likely varies from your country. The process of loan attribution always goes easier in your home country. Interest rates in Spain are normally a bit higher than the average. Nevertheless, Spanish banks are keen on having foreign customers because of the low risks.  

TAXES AND COSTS

1. IVA (VAT): 10 % for residential real estate and 21% for plots, separate garages and storage facilities.

2. Stamp duty tax (for Andalusia): 1.5%

3. Notary costs: notary fees are calculated according to the wage-rate agreed by the government and depend on the nature of purchase / sale and the number of pages in the final purchase act. Notaries apply the same fees for the same concepts. The average fee for a purchase of a regular residential house range between € 500 and € 1.800 (excl. 21% VAT).

4. Inscription in the ‘Registro de la Propiedad’, (the Land Registry): the costs for the Land Registry is determined by the regional authorities and is usually between 50% and 80% of the notary fee.

5. Legal services / lawyer: 1% + 21% VAT of an agreed selling price.

In case of purchase of real estate using a new mortgage, there will be extra registration fees and notary costs involved because here we deal with a separate act that has to be officially registered. The stamp duty in this case will also be 1.5% of the total loan.

As soon as you have determined your budget, together we will start searching for your dream home. We will contact you to gather more detailed information and list all points which are important for you in your future property. You might have seen some options on our website or elsewhere that caught your eye. We will discuss all the relevant information about this particular property and decide together if it may be something interesting for you or not.

Please note that we have access to every new or resell property in this region that you see on the internet. However, the information on other websites can be out-of-date. We have access to all relevant information in real time including availability of a particular property and its current price.

Don’t be fooled by beautiful pictures on the web! We will inform you if the ‘good looking property’ is real and if it is next to a busy highway or not. We are showing you both the pros and the cons of a given property, so you can make your own opinion, based on every piece of information. We strongly believe in objectivity and clearness instead of ‘sweet sales talks’.

Points to consider:

  • Are you searching for a property in Spain for a permanent living, or do you want to have a vacation destination where you’d like to spend a lot of time or maybe visit it only twice a year? If you are looking for a place to stay more than a couple of months per year, you will probably need a bigger living space and a better location.
  • Do you want to rent out your property in the future or is it only for your personal use?
  • Do you see yourself living in an apartment or do you prefer to live in a separate villa with a private swimming pool or in a community with all necessary maintenance included?
  • Do you see yourself living in an apartment in a community with all necessary maintenance included or do you prefer to live in a separate villa with a private swimming pool?
  • Do you have an idea how many bedrooms should be in your house or a desired number of bathrooms?
  • Would you like to have a morning sun on your terrace or an evening one?
  • How important for you is the distance to the beach or any other place in the neighbourhood?
  • Are you looking for a calm location in the nature or a vivid community instead?
  • Should the property be pet friendly?

Eventually as a result of our conversation we will present to you a list with the best suitable options that match your personal criteria.

If you find that this list contains of some very interesting properties that have a chance to become your second home, then we can move to the next step.

CLICK HERE TO START SEARCHING

To make a successful purchase it is of a great importance that you come to visit the region for a couple of days. This visit will be thoroughly prepared by us based on all the criteria which we have set up together. Out of experience we know that you can make a right choice only when you have seen about 12 projects and have a clear understanding about the region. Every property has its advantages and disadvantages. We will be the first to point out all of them so you can make an objective decision and a good choice.

In case the property is still under construction (an off-plan project), we will show you a similar property or a show home of the same developer in order to give you a good idea of the finishings and the used materials. Everything is getting more tangible when you can see it in person.

Current demand of European and non-European customers for real estate at Costa Del Sol is high. That is why we need to act fast. Couple of days before the visit we check if the desired properties are still available for sale. We offer the newest opportunities on the market. We visit the projects from the promotors who are providing bank guaranties and whose projects we have already checked in the past.

Taking into account that we are not the only real state agency on the market and in order not to waste any time, visits to all the projects are carefully planned and pre-registered with the developers.

If you like, we can even organise your trip, so you can fully enjoy your visit. The cost of the trip of 3 days and 2 nights, hotel, breakfast and a transfer from/to the airport will be refunded in case a property is bought with VIDA del SOL.

You have found your dream home! Now it is important to remove this property from the market as soon as possible. To make this happen there are two necessary steps to be taken:

1 – Choosing a legal representative / lawyer: it is important that you as a buyer has an independent and professional legal adviser. Legal actions that are being exercised during the whole process of purchase along with the responsibilities of legal representative / lawyer are exactly the same as the ones of the notary back home. VIDA del SOL can present several independent lawyers who are specialised in real estate, have a very fare fee rate and speaks your language (if you opt for it). These law firms apply the faire rate of 1% on the sales price.

2 – Requesting your NIE-number (tax number).

LEGAL REPRESENTATIVE / LAWYER

Authorisation (Power of Attorney): in Spain it is a normal practice to give a power of attorney to a legal representative / lawyer who you have chosen to work with so they can assist you and act on your behalf during the purchase process. This authorisation gives them legal power to take care of all the formalities and to sign the documents related to the purchase of a property and eventually mortgage documents. The authorisation must be endorsed by the official notary in Spain (the average fee of +/- € 90) or via the Spanish embassy in your homeland.

 The authorisation for a legal representative / lawyer in Spain can also be endorsed by a notary in your homeland. In this case it should undergo the procedure of official translation in Spanish (done by a sworn translator) and legalisation by arranging an apostille for this translated document according the Hague Apostille Convention 1961 in order to obtain a legal power in Spain. This way is more expensive, pretty complicated and will definitely take some extra time.

The same legal representative / lawyer can make a request for obtaining a NIE-number on your name (Numero de Identidad de Extranjero). This NIE-number is a special tax number for all the foreigners who are the subjects of the Spanish tax regulation. NIE-number is necessary for the inscription of your property in the Land Registry, to pay taxes and to contract all utilities.

In order to remove the chosen property from the market as soon as possible it is important to make a deposit payment. This reservation fee depends on the total price of the property and is mostly between € 6.000 and € 10.000. It is crucial to transfer this money to the clients account of your legal representative / lawyer and not directly to an agent or a promotor.

DUE DILIGENCE

The real estate agent gives the contact details of a seller / promotor to your legal representative / lawyer. When the transfer of deposit to the clients account of your legal representative / lawyer has been done, he or she shall contact the seller / promotor and apply for all the documentation of the project in order to start his investigation.

The following verifications will be executed:

  • Official identification of the seller of the property you would like to purchase.
  • The registration of the property under construction in the Land Registry (‘Registro de Propiedad’).
  • If the property is charged or not with debts or liabilities.
  • Verification of the building licence and after construction, the presence of the licence of first occupancy issued by the municipality.
  • Transfer of architecture specifications and quality verifications to the buyer and its attachment to the sales contract.
  • Arrangements of bank guaranties, insurances to protect the investments that have already been made during the building process.
  • Control and analysis of the sales contract prepared by the developer to ensure your rights are legally protected.
  • Translation of the sales contract to confirm that all the clauses in it are clear to you.

About 4 weeks later, when the procedures of due diligence have been fulfilled and it has been proved that everything is by the book, the sales contract will be signed. At the moment of signing normally the buyer is asked to pay 25% to 35% of the sales price minus the already payed reservation fee.

Signing the sales contract is a very important step in the whole purchase process: As soon as negotiations with the seller’s lawyers about his/her rights and interests are completed, specific terms and conditions of the purchase procedure should be determined.

After delivery of the property and obtaining of licence of first occupancy – the Title deed can be signed. The signing can be done by the buyer assisted by his/her legal representative / lawyer or by the legal representative / lawyer using the granted authority from the buyer. During this step the rest of the property sales price should be transferred to the seller / promotor. After that the buyer becomes an official owner of the property.

COMMUNITY COSTS – LOCAL TAXES

Your legal representative / lawyer will arrange for direct debit of all the utility contracts as well as local taxes and any other payments related to the property. You have to take into account that after signing the deed it will take approximately 2 weeks to organise water and electricity supply for your property.  

It is crucial to open a bank account in Spain to be able to pay all the above-mentioned expenses: infrastructure costs, local taxes, household waste collection and eventual community fees. Your legal representative / lawyer will help you with opening a Spanish bank account and organise an automatic payment if you want. Make sure there is always enough money on this bank account to avoid any surprises.

You are now the owner of your dream home! Of course you would like to decorate your new house in the best way and according to your wishes and demands. VIDA del SOL can bring you in contact with the right people to make your dreams come true.

U rest nog één ding: te genieten! Bekijk hier de mogelijkheden die de streek kan bieden. Aarzel niet VIDAL del SOL te contacteren mochten er achteraf vragen zijn!!