Spanish Property Buying Guide
Many people dream about buying a home on the Costa del Sol. With resorts like Almuñecar, Nerja, Torremolinos, Fuengirola, Mijas, Marbella and Estepona are the most common property-buying destinations. Attracted by the unrivalled opportunities for fun, with golf and water sports for the energetic, along with great shopping and restaurants. Hot in summer, warm in winter and open all year around.
New Builds VS Resales Properties
If you are flexible with the “moving-in date” new builds or off-plan properties are your best bet. Nothing beats moving in a brand new home of beautiful modern design customized to your needs. New homes are also more energy efficient, everything works perfectly and come with a 10 year guaranty by law.
Legal & Financial Consulting
The lawyer is your most important team member. Your best bet is a lawyer that is also a fiscalist so that he can give you a full view of all the applicable expenses to be incurred.
Fees vary depending on the services provided, but are unlikely to be less than 1–1.5% of the property value, plus VAT.
- Contact and negotiation with estate agent the terms of the purchase
- Obtaining your NIE number & opening bank account
- Performance of due diligence proceedings
- Explanation of applicable expenses to be incurred
- Drafting, preparation and review all of the documents
- Communication with Notary to review necessary paperwork, and assistance on the date of completion
- Execution of payment of taxes (Transfer tax/ VAT), Notary and Registry’s fees
Getting a Mortgage
Many buyers will finance their house purchase with a mortgage which will incur extra costs such as the Mortgage stamp duty (1%) and the Bank mortgage commission (0.25%). The bank will insist that the property be registered in your name. The contract of sale, receipt of funds and constitution of the mortgage will happen simultaneously, so an agent from the bank will be present at the signing of the deeds and will forward the money to the seller.
The mortgage provider will normally require the following documentation:
- Income tax declaration for the past two years
- Bank statements from the past year.
- Payroll or other proof of income for the past six months.
- A list of mortgage loans already held.
- A statement of your assets and liabilities, confirmed by an accountant.
- Copy of your passport
Fees & Taxes
The costs associated to the property purchase can be as much as 13% extra for buying costs and tax, and 2% more if they are going to get a mortgage , which is made up of the following:
- Taxes (VAT/ITP): 10%
- Notary fees: 1%
- Registration of property: 1%
- Stamp duty: 1%
And in case they need a mortgage, they will have an extra cost:
- Other fees (gestoria, Registry, property valuation, notary) 0.8%
- Mortgage stamp duty: 1%
- Bank mortgage commission: 0.25%
The Buying Process
There are many ways of buying property in Spain. The type of contract will depend on the type of property, whether new build or resale, the nationality of the buyer, etc . If all the due diligence can be completed quickly it is possible to buy a property in Spain in a day or two.
New Builds & Off-Plan Properties
Once you choose the new home you want to buy, the first thing the developer will ask you is to leave a deposit, usually € 6,000 which will be taken off the final purchase price. The agreement should be subject to preliminary legal checks, mortgage loan availability on the property and a building survey, the deposit should be returned if there are problems.
- Reservation Deposit: € 6,000
- Down Payment: Usually 30%
- Balance upon building completion