Buying a property in Spain is quite an easy matter, but it is necessary to use the services of a law firm focused on it, which ensures that the selected property is absolutely legal (approved, registered in the Land Registry for the given purpose), has no debts, is not pledged, etc.
The purchase process is mostly in 3 phases:
- signature of initial reservation contract (paid mostly between 3.000-6.000 €)
- signing the purchase contract.
- signing a clerk at the notary
Only a passport is required to purchase, and in Spain, a NIE number (tax identification number) must be applied for by each of the owners.
Taxes and fees related to property acquisition
The tax on Spanish real estate varies depending on whether it is a new building or an older property.
Buying a new building (first acquirer, buying from a builder or a construction company) pays the buyer IVA (VAT) 10% of the purchase price if the property is intended for housing. For garages and commercial properties, VAT is 21%. The property is not subject to real estate transfer tax.
Buying an older property (second and subsequent sales) pays the buyer a 7-10% property transfer tax and does not pay any IVA.
Fee for inserting a purchase contract into the real estate register - it is graded according to the price of the property.
State tax (so-called wheels) in the amount of 0.5% of the purchase price
Notarial fees - about 1% of the purchase price
Legal fees - a lawyer is not required by law, but we recommend it. Fee 0.5-1% of the purchase price
Current account with bank
You will need a bank current account to pay the purchase price of the property you have purchased, to pay the owners' fees, energy and service suppliers, etc. In the event that you take out a loan to make the purchase, the account will also be required to repay the installments. You can use the services of any Spanish bank, but it is advisable to set up such an account with a bank that has a branch near the property. Before deciding on a particular bank, we recommend checking the fees that the bank charges for regular transactions, such as depositing and withdrawing money, bank transfers, and so on.
Getting NIE (tax number)
The Foreign National Tax Identification Number (NIE) is a personal and unalterable number used to identify foreign taxpayers. Competence falls within the Ministry of Interior. NO is obtained by our assistance either in Spain or at the consulate or embassy in their country of residence. There is a need for a certain amount of time.
Examining the property and negotiating the terms of purchase
After paying the deposit (reservation fee) and signing the reservation document, the owner or his / her legal representative should provide the buyer with all the documentation that will enable the suitability of the purchase to be verified from all legal aspects. This is a rather complicated matter for those who lack legal knowledge of the local system. Therefore, we recommend to entrust these examinations to a lawyer (whom we will, of course, arrange at the site).
In particular, it is important to examine the following:
- that the size of the real estate and the actual build-up correspond to the situation in the land register
- that the selling party is the beneficial owner and can dispose of the property without restriction
- that the seller's representative has sufficient power of attorney to represent him
- that the building has a building permit that this has been granted to show what has really been built and has never been removed
- that the building has a coilauding decision and that this has not been withdrawn
- that the guarantees provided by the developer for payments made during construction are sufficient and in accordance with the relevant legal standards
- that no administrative proceedings have been initiated by the relevant building authority in relation to real estate
- that real estate does not bind debt, obligations, restrictions
- that all relevant taxes, fees, supplier invoices are paid on that date
- that the community of owners is fine
Signature of the contract - deposit in the cadastre
The signing of the purchase contract is normally done within 2 weeks to the month of booking the property and paying the reservation deposit (the client will transfer funds to the already established account in Spain). This payment includes a deposit already paid. When signing a purchase contract with a notary, the buyer must prove that the funds have gone through a standard bank transfer, as imposed by money laundering legislation
When signing the purchase contract, either the buyer or his legal representative must be present either on the basis of a certified power of attorney.
The property is owned by the buyer from the time the purchase contract is concluded with a notary. It is registered in the cadastral office database on the basis of a change of ownership directly by notary. However, it is necessary to formalize the registration, which consists in the fact that the contract is physically collected from the notary's office in the original, the corresponding fee is paid and the relevant taxes and the contract is submitted to the Land Registry for proper registration. If the real estate is not registered in the real estate name of the buyer, you are the owner of the purchase agreement, but you will not be guaranteed against third parties that only provide proper registration in the real estate cadastre. sign power of attorney.).
Changes in contracts with energy and service suppliers
Immediately after signing the purchase contract with a notary you will have access to the newly purchased property. For example:
- replacement of locks (we recommend replacing locks especially at the main input)
- sign a water supply contract and set up a direct debit for your account
- conclude an energy supply contract
- conclude a fixed line contract (if necessary to connect a security system or internet connection)
- sign up as the owner at the appropriate city council and set up municipal property tax collection and payment and garbage collection fees
- register as owner with the owners' community
- register as a taxpayer at the relevant tax office
- conclude relevant insurance contracts
Our office and our agents are ready to guide you through all these pitfalls so that this process is as simple as possible for you and avoids unnecessary complications.