How To Buy A Property In Spain? | Contract
Once agreement has been reached on price and other terms, firstly a reservation contract will be prepared. This is a short contract in which buyer and seller confirm their agreement of the sale and selling price. The purchaser is required to pay a deposit. This reservation fee usually ranges around €5,000 to 6,000 and €10,000 plus for the high end properties.
The reservation contract mentions also the period within the contract must be signed. This prescribed period will be used for researching the property.
Research
Your lawyer conducts all necessary research of your new property. He pulls data from the cadastral and the property register (in Spain two different bodies), the municipality, the tax authorities and the utilities.
This phase of the process will also be used to prepare for your upcoming status as a home owner in Spain. You will have to apply for a NIE number (Tax Number) to open a bank account. In either case, your lawyer will be able to assist.
Purchase Contract
The signing of the purchase contract is usually signed within 14 days after signing the reservation contract. Generally speaking the purchase contract should describe all conditions that are part of the agreement. By signing the contract, the buyer needs to pay 10% of the purchase price (minus the reservation fee previously paid).
Notary
On the agreed date, all parties appear before the notary, One of the team and your lawyer will accompany you. The deed’s will be explained once more by the Notary, but obviously it is already discussed before that time with your lawyer. With your lawyer also the payments have been prepared. In Spain this still takes place with cheques or transfer. After putting signatures, payments and keys are exchanged and you are the new owner of the house!
Additional Costs
On top of the agreed purchase price, you must take into account additional costs of approximately 12% to 13% (10% tax and 2% to 3% for notary, registration fee and lawyer). For properties over 1,000,000,– the tax is 11%. Another 1.5% tax is asked for new constructions (stamp duty) and sometimes also fees are charged separately for the connection for water and electricity.
Management
Buying a house in Spain, of course, also brings its responsibilities. After signing at the notary you are responsible for paying local taxes and utilities. Your lawyer will help you registering with the municipality and the transfer of the contracts for gas, water, electricity etc. Regarding the maintenance of garden and swimming pool for example, there are many companies available that offer their services. We can provide more contacts.
Holiday Rental
The Costa Blanca is a very popular location for tourists (and with good reason!). Renting out your property during holidays could be an interesting opportunity. The rental income can take care of a big part of the annual costs. Regarding holiday rental already an extensive infrastructure is available. Several options are possible from outsourcing all to being involved yourself.
