Disclaimer! This guide is only a well-intentioned guidance broadly. Information on the exact procedures and precise spending, you need to obtaining from your lawyer. In other words, this is no binding information from us.
Borrowing from a bank
In Spain, you can borrow for your home purchases in most banks. The banks do not differentiate between foreign or domestic buyers of housing. Normally you can borrow 50-70% of the property price. This means that, in practice, you must have at least 30% of the property price in cash contribution. If you trying to take loan in your home country, maybe your bank dont accept the foreign property as security for the loan.
Before the purchase is made, it is necessary to apply for an NIE number (Spanish identification number for all immigrants in Spain). This can be done in Spanish consulates and embassies. After this, you should open a bank account in Spain for water, electricity, and other fees related to your residence.
Additional costs addition to the property
You need to add 10-15% of the property price at purchase.
These 10-15% include:
1) Transfer tax 8-10%.
2) Legal costs 1-2%
3) Land registration about 0.5 – 1%
4) Notary fee about 0.5 – 1%
In Spain, France and Italy so usually the buyer and the seller have their own brokers. The broker will usually take you off on a tour where a number of objects that match your preferences are shown up.
The broker can often show up properties that are not presented on the Internet, because of competition, confidentiality, etc.
You must have a lawyer. You can arrange your own, but usually recommend your broker a lawyer. The lawyer is a cost that falls on you as a buyer.
Your lawyer will do the following before buying: Checks of the property to ascertain that all Spanish legal requirements are met, and that the property is free from mortgages, charges, liabilities, and ensure that it is updated with all payments, establish the purchase agreement where conditions of the sale are clearly indicated, plus a completion date in the presence of a notary.
The buying process
Step 1: Pay the reservation fee
Once you have found the perfect home, the next step is to pay a reservation fee. Depending on the selling price, it is usually between € 2,500 up to € 10,000. Sometimes is the calculated reservation fee 1-2 % of the purchase price. This fee is used to remove the property from the market for a short time, and to show your “real” intention to buy. This amount is paid to the broker.
Step 2: Investigation of the property and the seller
When the reservation fee is paid, your lawyer should immediately check all legal aspects relating to the property and the seller. The lawyer will check that there are no debts against the property, approve all property records and verify that the owner is the legal seller. Once all checks have been completed you go on to step 3 of the buying process.
Step 3: Private purchase contracts and deposit
When the lawyer has approved all the details about the property, the private purchase contract be signed and deposit of 10% must be paid. As a rule, this is done 10-20 days after the payment of the reservation fee. The purchase contract will specify all conditions of the sale and the last day on which the title deed must be signed and the final payment is made.
If the buyer pulls out of the purchase after the deposit has been paid, the buyer loses the deposit. If the seller withdraws from the purchase, the seller need to pay back double the amount of the deposit.
Step 4: Notarie
The last step is to go to the notary to sign the deed and pay the remaining 90% of the purchase price. The purchase is completed when the lawyer registers the new owner in the land registry. This is a simple process that takes place after the signing.
The notary’s main task is to identify partners and make a final check that everything is in order. Pass must therefore be made. He checks the seller’s bank gets paid and if it necessary to write the buyers bank loans into the sales contract.
The purchase document drawn up by the notary called “escritura the Compraventa” It is signed by both seller and buyer in front of the notary. In connection with the signing, payable the official sales revenue and the keys handed over. The takeover is thus always the date of the signing.
Title deed cost
An authorized Notarie issuing always the writing of title deeds. Now it is also time of final payment and to make a provisional title deed, Nota Simple, which is valid until the official title deeds will be sent to you.
If you can not be present, there is the opportunity to let your lawyer get a power of attorney to sign the deed. This simple deed can be used to subscribe for electricity, water and telephone. It takes a few months before you get the official deed a ‘escritura’ of the property. The same day that the deed is signed, you get access to the property.
The cost to obtain a registration of ownership granted, the buyer pays. The notary charges a flat tariff, and that’s about 0.5% of the purchase price. When everything is ready, depreciated property into the state and municipal land registers. The cost of this, the buyer may pay and it depends on the property’s assessed value, and represents about 0.5%
What costs are involved when you buy a property in Spain?
There are three main costs when buying a property in Spain.
1. IVA / Spanish VAT
2. Notary and Land Registry fees
3. Lawyer costs
1.1 IVA / Spanish VAT
When buying a propertythe following is applied percentages of IVA / transfer taxes:
On the purchase of real estate up to 400,000 € IVA / are transfer tax 8%
On the purchase of properties between 400,000 € to 700,000 € IVA / transfer tax is 9%
On purchase of properties over 700,000 € IVA / is a transfer tax of 10%
On purchase of the newly built property is a transfer tax of 10%
1.2 Notary and land registry fees
Notary fees and land registry fees vary depending on the size of the property and the sale price. For a property that sold for € 200,000, costs for the notary and land registry fees go up to € 1500, and for property sold for 400,000 €, the charges can go up to 2000 €.
1.3 Lawyer fees
Lawyer fees are typically 1% of the sale price.
What is the annual real estate costs in Spain?
Before you buy a property in Spain, it is extremely important to know the annual cost of that particular property. You should get this information when the broker is the viewing of an property. If for some reason this information is not given to you, be sure to ask.
The annual real estate costs are as follows:
- IBI – Municipal property taxes
- COMUNIDAD – Property Association
- Basura – Refuse Collection Fee
IBI is the annual property tax is paid once a year. The amount is calculated based on the property’s tax value; type of property, area and value of the building.
Example: Year 2014 Apartment with 2 bedrooms, 2 bathrooms in Hacienda Elviria, Elviria pay about 800 € to 1200 € per year in IBI / municipal property tax.
1.2 Property Association
In each housing complex, each homeowners must pay a monthly fee for maintenance and upkeep of the common areas. Costs vary depending on each residential complex and covers maintenance of garden areas, pool, security guards, cleaning and maintenance of common areas.
Examples: In 2014. An apartment in Hacienda Elviria, Elviria, paying about 160 € per month. Detached villas usually have far less fees as garden and pool are not maintained by the association but by individual gardeners employed by private homeowners.
1.3 Refuse Collection fee
For an apartment or villa in Elviria cost refuse Collection Fee about 140 € to 200 € per year.
NOTE! Electricity and water are not included in the above charges, to be paid separately by the homeowner depending on individuel consumption.