A guide to the buying process.

Prior to commencing your property search It is important to have your finances in order, you will then be able to proceed swiftly once you have found your chosen property.

It is also very important to factor in the additional costs when purchasing a property, typically these costs will amount to an additional 13% of the purchase price and will cover all the following costs and fees. 
 

Resale Purchase Tax - Impuesto de Transferencia de Propiedad - When purchasing a resale property, the buyer is liable to pay the 10% transfer tax of the contracted purchase price. (in the Murcia region this is reduced to 8%).

New-Build Purchase Tax (IVA) - 10% (this is the Spanish equivalent to VAT) This can be payable as part of the payment structure or on completion if detailed in the contract).

Stamp Duty – (Actos Jurídicos Documentados) – This is Payable only when purchasing a New build property and is around 1%.

Notary Fees – are for preparing the property deeds (The Escritura) and for registering the title.

Land Registry Fees - For registering the property at the Land Registry Office.

Plus Valia – This is a Tax that is levied by the local Town Hall and the seller is liable to pay this Tax. However, if it is a new build property that is purchased then it is the responsibility of the purchaser to pay the Plus Valia Tax.
 
 

After you have found a property and agreed the price, the next step is to secure the property by paying an initial deposit, this is normally 3,000 euros. The deposit payment takes the property off the market, and at this point the agreed price is secured.

A contract of sale is then drawn up, this document will specify the completion date. The completion date is agreed according to both parties’ individual needs, an additional payment is then required bringing the total deposit payment up to 10% of the agreed purchase price, the contract is then signed by both parties.

On the day of completion, both the buyers and the sellers, together with their legal representatives, convene at the notary's office to finalise the purchase. It is at this time that the outstanding balance is paid, this is normally facilitated by way of a banker’s draft or via bank transfer.

After signing all the required documents, the deeds are then exchanged, at this point you will formally become the new legal owner of the property and take possession of the keys.

 Understanding the functions of legal entities such as notaries and lawyers can greatly facilitate the process.

Prior to advancing with a property acquisition, it is crucial to perform thorough due diligence. The preliminary documents that your Lawyer should obtain include:

Nota Simple - This is an extract from the Land Registry providing details about the property, such as ownership, property boundaries, and any debts or encumbrances.

Property Deeds (Escritura de Compraventa) - he deed contains the property description, the identity of the owner, and the property's legal history.

Latest IBI Receipt - The 'Impuesto sobre Bienes Inmuebles' is a local property tax. The receipt gives evidence that the taxes are up-to-date.

Community of Owners Certificate - If the property is part of a community of properties, a certificate from the community president or administrator stating that the previous owner is current with all payments required.

At The Time of Purchase:

At the time of transaction, additional documents are required to complete the purchase:

Contract of Sale (Contrato de Arras) - This is a pre-sale agreement securing the property and setting the terms of the sale (Price, timescale, furniture status etc).

NIE (Número de Identificación de Extranjero) - This is a foreigner identification number necessary for all foreigners involved in any transaction in Spain. The solicitor will arrange this for you.

Proof of Payment - This includes bank statements and other documents that prove you have the financial means to purchase the property.

Mortgage Details - If you are buying the property with a mortgage, you will need a copy of the mortgage contract.

The Roll of the Notary:
In Spain, a notary acts as a public official and is integral to the legal process of property transfer. Their duties include authenticating documents and verifying that both the buyer and seller meet all legal obligations. The notary is impartial, representing neither side, but ensuring the legality and validity of the transaction. After confirming the documents and finalizing the transaction, the notary issues a new deed of sale.

The Roll of the Lawyer:

Although hiring a lawyer for property transactions in Spain is not obligatory, it is strongly recommended. A lawyer can:

Conduct all necessary legal searches.

Ensure that the property is free of debts, charges, and encumbrances.

Help navigate the complexities of local real estate laws.

Draft or review contracts and ensure that all the terms and conditions are fair and legal.

Represent your interests and act on your behalf in negotiations.

Help translate official documents.

Provide assistance with applications for NIEs and opening a Spanish bank account.

Liaise with the notary to prepare the necessary documents for signing.

The right estate agent and legal experts can transform the purchase of your dream home in Spain into a straightforward and enjoyable journey. From searching for the property to signing the deeds, our expertise ensures a smooth and trouble-free process.