If your intention is to own a home in Spain, where the sunrise and sunset are equally energizing, then welcome to an amazing lifestyle!
First things first, both your estate agent & lawyer, architect and builder should come highly recommended. A good estate agent does so, based on his market knowledge and experience, and in most cases will give you much more background information about the property, the sellers, and the local area. Your estate agent will have a list of selected properties, but they will also be in contact with other agencies to offer you an extensive property list to view. When collaboration of agencies occurs, then the commission is normally split and can range from 3-5%, paid by the SELLER.
Your offer will form the verbal contract via the estate agent for the property. Then engage an experienced lawyer for legal & fiscal advice, who should be a member of Collegio de Abogados and have a professional liability for lawyers in place. The lawyer will prepare the normal reservation contract in which a sum of money is payable and temporarily removes the property from the marketplace. This sum amounts to normally between 3000 – 6000€, depending on the selling price & only refundable if in the event of the SELLER withdrawing from the sale.
When buying land or rural property, it is wise to have an architect conduct a technical investigation concerning the measurement of the exact boundaries of the land/ property. All property legalities will be checked by the lawyer, including a legal investigation with the local authorities where the property is registered correctly with the legally registered owner. Initially, the lawyer will give you an estimation of costs and taxes involved in the transaction, which are usually about 10-12% of the purchase price, and of this amount 8% (Andalucia) of the purchase price is reserved for the transfer tax. When buying a newly built house or apartment you don´t pay a transfer tax of 10% IVA, which is the Spanish VAT. In Spain, you also pay a yearly local IBI tax, which is based on the fiscal value of your property and issued by the Ayuntamiento (town hall) of your area.
A lawyer checks whether any legal correspondence exists about the property at the Land Registry (Registro de la Propiedad), the Catastro & the Ayuntamiento (town hall). The lawyer also verifies whether there are any debts like mortgages, attachments of property, or unpaid taxes. This is very important information because, in Spain, certain kinds of debts are automatically transferred on to the new owner if not intercepted.
Lawyer’s fees can vary, but generally 1% of the legal investigation (minimum 1300€ plus IVA) with the remainder of fees going to the notary for official authorities/registries. A private purchase contract amounts to a 10% down payment and if preferred, this money can remain on the lawyer´s ´client’s until the signing of the title deeds at the notary upon completion of contracts. After the private purchase contract is signed, the lawyer will provide the notary with all the documentation that is needed to set up the new public title deeds. Your utilities & service accounts, together with the IBI can be set up and any transfer tax, where applicable, will be advised by your lawyer.
Finally… its highly recommended to have your Spanish will in place, following the purchase of your dream home!
