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Your Guide To Buying A Property In Spain
So where do you start? Our first piece of advice to you is to use an experienced and professional estate agent such as “First Choice”. All properties such apartments, villas, townhouses etc. should be registered in the Registro de Propiedad; here you can obtain full details of the owner, debts or judgements against the property, mortgages and the exact size and description of the property.
Unless notarised power of attorney has been given to a third party, only the person/s named on the Escritura (deeds) has the right to sell the property.
So you’ve found the property you want, what happens next?
A reservation deposit of 3,000 euros is handed to your estate agent to ensure that the property is taken off the market.
A contract will now be drafted and a deposit required upon signing. The contract will include a completion date and conditions of transactions. The standard deposit rate is 10% of the purchase price lees the reservation deposit which you have already paid to your agent. When the contract has been signed by both parties and the deposit paid, the property is secured.
Within a month or so you should be ready to make the Escritura Publica (conveyencing deed). Upon signing of this deed the balance of the purchase price should be made before a Spanish Notary. You are now the new owner. Finally, the Escritura Publica needs to be registered in the Land Registry Office.
This of course will be handled for you by your legal advisor.
Guide to costs
As well as the actual cost of your property, you should allow approximately 10% for transfer costs. Unless your contract specifies otherwise, charges should be divided between buyer and vendor as follows:
Buyer pays
Transfer tax or IVA (VAT): This charge is 7% on a resale property. You will pay 7% IVA if you buy a new property from a developer plus half of one percent in stamp duty.
Registration fees
To change the deed into your name, average costs are between 120 Euros and 300 Euros.
Notary charges
For the first and any further copies of the Escritura Publica and set on a sliding scale increasing with the price on the contract. An average price for a property valued at 60.000 Euros would be 350 Euros. If there is a mortgage on the property this will entail an extra deed and charge.
Vendor pays
Plus Valía tax. A municipal tax based on the official increase in the value of the property since the last time it was transferred. The local town hall will assess the amount.
Agent fees
These are negotiable between yourself and the vendor. The buyer usually pays the Notary fees, transfer fees and the property registration fees with the Plus Valía paid by the vendor. As of April 1999 anyone purchasing from a non-resident vendor has to pay or retain the Plus Valía amount as the town hall can attach the debt to the property.
Annual Costs
You should receive copies of all the paid up receipts relating to the property when you purchase. The local town hall’s annual real estate tax is known as the IBI or Impuesto Sobre Bienes Inmuebles. The previous owner must give you the receipts from the previous year. The official assessed value of the property used to assess other taxes is shown here as the Valor Catastral. Your lawyer should ensure there is no outstanding debt from previous years. Also bear in mind that rubbish collection and sewerage may be included in this tax or charged separately.
Community Charges
You should also obtain a paid up receipt for these charges. If your property is part of an urbanisation you automatically become a member of the community with the right to vote at the AGM and become obliged to pay your fees each year. These depend on the services offered by the community. You should also obtain proof via your lawyer that the fees are paid up to date as debts will automatically attach to the property.
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