Find Your Ideal Property
In addition to the purchase price of your property, acquisition costs - ie taxes, notary and legal fees will add approximately 10-12% of the agreed purchase price
Purchase Contract
Once you have found your dream property, and subsequently put in an offer which has been accepted by the seller, a contract will be drafted and a standard deposit of around 10% of the purchase price will be paid. Upon signing a Purchase/sale Contract or an Option Contract (Contrato de Compraventa o Opción de Compra) the deposit is paid.
The contract will specify a completion date and transaction conditions which usually stipulates that the property is sold free of charges, tenants and mortgages. We highly recommend that a buyer seek independent legal advice with the drafting of the Option Contract or Purchase/sale contract.
You have secured the property once both parties have signed this contract and the deposit has been paid. Breaking it or for failing to honour the terms of the contract will result in penalties for either or both parties.
PAYMENT AND SIGNING OF DEEDS:
The next stage is to finalise the purchase at the Notary’s office. Usually, between 4-6 weeks, you will be ready to make the final checks before signing the Title Deed (Escritura Pública de Compraventa) in the presence of a Spanish Notary (Notario). The Notario will certify that the contract is officially correct, but does not certify that all statements are true, only that the parties have sworn to them. You will be then be required to pay the balance of the purchase price, taxes and Notary’s fees.
NOTARY CHARGES:
Fees are fixed by law and are based according to the value of the property.
Please note that an 16% IVA (VAT) is added to all professional fees including the notary’s and land registry.
PROPERTY REGISTRATION FEES:
The Land Registry Office charge a registration fee to inscribe the new deed into your name. These are based on the official registered The value of the property, the length and complexity of the deed determine the amount to be paid. The fees do not exceed 1% of the registered value of the property.
TAXES:
(PROPERTY TRANSFER TAX OR IVA (VAT)
The General rate for resales tax is 6% but in some regions, such as the Balearic Islands, Cataluña and Valencia, etc. the rate is established at 7%. If you are purchasing a newly built property from a developer you will pay a different tax called “I.V.A.” (VAT) which is charged at 7% of the purchase price plus 0,5% stamp duty.
LOCAL MUNICIPAL TAX (PLUSVALÍA):
This tax is calculated on an officially assessed increase in the value of the land since the last time the property was sold . An owner of an apartment for example would pay considerably less tax than an owner of a villa with a large plot which has not changed hands for years. Exact details of this can be found at the local Town Hall. This tax is not to be confused with capital gains tax on his profit on the sale.
OUTSTANDING DEBTS:
Debts such as outstanding mortgages, unpaid Community fees, water and electricity rates should be paid by the vendor before paying him the purchase price and signing the Deed of Purchase/sale. If not, you can deduct the amounts owed by the vendor from the purchase price to be paid and settle the debts on his behalf. This should be agreed between the parties.
