SMALL GUIDE FOR THE PURCHASE OF PROPERTIES IN SPAIN

We hereby would like to provide you with some basic references for the purchase of properties in Spain.

They can never substitute the work of your lawyer; he/she is the professional who will lead you through the purchase procedure in the most efficient way both from the legal and the tax point of view. This will make you save money and time spent in unnecessary steps.

1) Initially, once you have found your dreamed property, and in order to reserve same and put it off the market, it is essential to pay for a deposit to the vendor; the amount will vary depending on whether it is a case of a resale or whether you are buying directly from the developer.

If the former, the deposit normally amounts up to 3’000 or 6’000 Euro; if the latter, and depending on the development, it varies between 6’000 Euro and a 10% of the price; in any case, you must always make sure you get a receipt from the vendor stating at least the details of the property, its attachments, such as parking spaces or storerooms, the total price, other conditions of the sale, i.e. whether the sale is subject to you getting a mortgage, as well as the penalties in case of non-fulfilment by any of the parties.

2) Once the deposit has been met, a sufficient term is normally given to the buyer in order for him/her lawyer to take care of the legal searches in front of the Land Registry, Town Hall, Catastro, supplying companies, etc. to ascertain whether the property has been given the applicable planning permission and other licenses, whether it is free from charges and liens as well as updated with the payment of rates, taxes, Community of Owners’ fees and other services (electricity, water, etc.).

Within this term a further payment should be attended, usually at the same time as the parties exchange private contracts whereby all the terms and conditions of the sale should be explained in detail; the standard amount to pay varies between a 10% in case of a resale and a 20% to 30% for brand new or off-plan properties, duly increased with VAT in case of new and off-plan properties.

3) Completion: at this stage, you would pay the balance of the price at the same time as the deeds are transferred to you in front of a Notary Public and the keys are handed over to you; the Notary is a public officer who certifies the identity of the people appearing in front of him/her on a certain date as well as the contents of the deeds but does not guarantee the legality of the deal; this is why it is important to contact your lawyer well in advance to check out the legal situation of the property, that the clauses included on the deeds really match the original deal and that all the formalities applicable in the Country are fulfilled so that the deeds can have access to the Land Registry, what will protect the buyers against third people.

Should you not be able or wish to come to Spain for any of the steps of the purchase procedure, your lawyer can certainly represent you by means of a power of attorney which he/she could previously organise to be granted by yourself abroad or in Spain. Also, he/she could apply for the NIE number (Number for Identification purposes for Foreigners) or certificate of residence or non-residence on your behalf, open a bank account, take care of the liquidation of the taxes incurring in the purchase, contract the different supplies and services, arrange standing orders for them and your municipal rates to be paid through your bank account, or even, should you find this convenient, borrow for funds and settle a mortgage in Spain.

Please bear in mind that the average costs for a purchase are usually of a 10% of the purchase price and in case of incorporation of a mortgage, you should add a 2 to 3%; the lawyers’ fees would be included within these percentages, they normally being of a 1% of the purchase price plus a 16% VAT.

Notwithstanding the above, and as previously stated, it would be necessary for your lawyer to study your case to let you know the steps to follow as well as all the expenses and the different options there might be.

Information provided by Víctor M. Bañares, Abogado, member of the Málaga Lawyers’ Association with number 4786.

Víctor Manuel Bañares Gómez
Abogado
C/ Tomás Heredia, 4, 2º C
C.P. 29001 – MALAGA
Tfno.-fax: 952.21.81.29
E-mail: victor.libertas@gmail.com
(Advice in English, French, Dutch and Spanish)