With over 25 years experience in the property market here in Spain we are very aware of how overwhelming purchasing a property in a foreign country may appear. In fact, having selected a property, the purchase process in Spain is a very simple one and here is our guide to prove it really is as simple as 1,2,3...
Signing a Reservation Contract effectively removes a property from the sales market and secures it for a prescribed period of time – usually 30 days.
This document, signed by you or your representative and the seller, confirms the agreed sales price. It is essential that, when traveling to Spain to view properties, you have funds available to pay the Reservation Deposit. This can be in the form of cash or, more conveniently, credit card. A cheque drawn on a Spanish bank account may also be used.
This is the point at which a sale becomes legally binding and we firmly recommend a local, independent lawyer is used at this stage.
In Spain it is customary that the lawyer representing the seller will draw up the terms and conditions of the contract. Your lawyer will check these conditions on your behalf.
The contract should include payment terms and an estimated completion date. Your lawyer will also conduct a full conveyance of the property and will outline the total costs of the sale, having calculated fees and taxes.
The formalities of a purchase are completed before a Public Notary, an independent referee who oversees the sale and ensures the parties have complied with legal requirements including payment of appropriate taxes. This is the day the agreed balances are paid and you take ownership of the new property.
Final registration of the title deeds is likely to take between 2 to 3 months from the time the Land Registry receives all the paperwork.
Castles will arrange for the relevant taxes to be paid and ensure that the property is registered with the Land Registry.
Castles can also arrange for you to be registered with the local Town Hall for payment of local taxes (See Section 2 – Running Costs)
Castles can also arrange for connection or change of name with all utility companies.
There are essentially two areas regarding costs that purchasers must be aware of, the initial PURCHASE COSTS and also RUNNING COSTS, i.e. the costs of owning a property in Spain.
The costs of purchasing a property are broken down as follows:
- 8% Property Purchase Tax
- payable to the Spanish Government.
- 1% +IVA Legal Fees
- We strongly recommend a purchaser uses the services of a lawyer to guide you through all legal procedures. They will ensure the property will be legally registered and transferred into your name and that it is free of all charges.
Castles has an experienced and qualified in-house lawyer who will guide you through the sales process at very favorable rates.
- Notary Fees
- Land Registry Fees
- Complimentary Tax*
The initial average cost is usually somewhere between 10-11% of the agreed sales price. These are normally paid on the day of the sale.
Once you have completed your purchase there will be ongoing costs associated with ownership of your new property. Outlined below are the ongoing costs you can expect.
Community fees. There is often an annual fee to be paid to the community of owners for the up keep of the urbanization and its facilities. This includes swimming pools, gardens, lifts, painting and general maintenance, etc.
Fees vary according to the amenities available and discounts may be offered for early payment.
Castles will always provide the figures before the purchase.
Council Tax/ Town Hall Rates (IBI and Basura – Rubbish). This is an annual local tax paid to the Town Hall, regardless of residential status. The figure varies depending on the type of property, size and location. Again, Castles will supply these details.
Property Owners Wealth Tax. As a property owner you may be liable to make a tax declaration in Spain. There are a number of exemptions and we recommend a consultation with our own advisers to guide you through the Tax System.
Castles provide an in-house service, making it much easier for you, by taking care of all kinds of transactions and paperwork. We have over 25 years of experience negotiating the Spanish systems which can remove the frustration of dealing with different (and occasionally inconsistent) procedures and save you money.
Electricity/Water/Gas/Phone - as per usage.