Buying Guide

Once you contact our sales department we will make a selection of properties that may interest you according to the characteristics indicated. After making the visits and once the property is selected, the process of purchasing a porperty requires a series of steps during which we will advise you at all times. We have a large team of professionals and partners to ensure that the operation is carried out with the maximum safety and agility.

 

1. Purchase procedure

 

Reservation of the property:

• This document is signed with the vendor of the property (the Real Estate Agency or the vendor himself ), in order for him to take the property o the market. Normally, a minimum of 6.000 € is paid upon signing this document.

Opening a bank account and requesting a NIE number ( fiscal identification number for foreigners). This document is absolutely necessary to purchase a property.

Final enquiries with regards to the property

Private purchase contract:

• This contract covers all the terms, conditions and obligations of the purchase, such as: the property that is sold and its annexes, the purchase price, the conditions and obligations of each party, terms and means of payment, date of completion, etc.

• Upon exchanging the private purchase contract, the buyer shall pay from 10% to 30% of the purchase price as a confirmation of the reservation of the property.

Obtaining all the necessary documents prior to signing the Purchase Title Deed and drafting the Deed, as well as applying for a mortgage if necessary.

Signing the Purchase Title Deed before the Notary, payment of the remaining purchase price, handing over the keys and all the documents related to the property. If necessary, the Mortgage loan Title Deed shall be signed on the same day.

Registration of the Title Deed of Purchase at the Land Registry as well as changing the name of the water and electricity supplies contracts, local rates, rubbish collection, etc.

You may also contract our partner offered tax and accounting services in order for us to help you through the aforementioned steps, as well as paying the relevant taxes, applying for a residence permit or any other issue related to your property, yourself or your family.

 

2. Mortgage Loan

 

In the event that the non resident buyer needs nance in order to purchase the property, Spanish banks may grant a mortgage loan. Nowadays, banks tend to grant non residents a mortgage loan for up to 80% of the purchase price or Loan to Value (LTV), whichever is the lowest, although this may vary depending on the nancial institution. The timeframe for the duration of the loan depends on several aspects, such as the age of the mortgagor . Mortgages are normally paid on a monthly basis. The debt to income ratio is normally around 30%. This means that if the monthly payment is 300 €, you shall have a combined net income of 900 €.

For the appropriate study of the mortgage loan application by the bank, several documents will have to be handed in (We shall inform you about the required documents). The documents must all be original and a sworn translation into Spanish is required (Our partners may help you with this matter).

 

3. Taxes and Expenses incurred in when purchasing Real Estate in Spain.

 

There are several expenses and taxes which must be paid when purchasing a property other than the price agreed upon with the vendor:

When purchasing a newly built property, the buyer must pay Value Added Tax ( VAT ), which amounts to 10% of the purchase price as well as Stamp Duties (1,5%).

When purchasing a property as a second transmission in Andalucía, 8%, 9% or 10% Transfer Tax is paid, depending on the purchase price.

• Payment of these taxes may be avoided if instead of purchasing the property as a physical person, the property is purchased through purchasing shares of a company which owns the property. The transmission of shares is not subject to VAT or Transfer Tax provided that the requirements laid down in article 108, 2 of the Stock Market Act are met.

The following expenses must be taken into account in both cases:

• Notary Public fees (depending on the purchase price)

• Land Registry fees (depending on the purchase price)

If financing is necessary for the purchase (mortgage loan), the following additional expenses shall be noted:

• Insurance: 250-500 € (approx.)

• Commissions for having a mortgage loan (depending on the financial institution, between 1% and 2%).

 

4. Property Maintenance

 

There are currently three types of annual fees that must be paid by owners of properties in Spain:

•    IBI (Property Tax). It is a local tax that must be paid every year both by residents and non residents. In some municipalities, rubbish collection tax is also paid.

•    Wealth Tax

•    Non Residents Income Tax Expenses and fees related to maintaining the property. 
Expenses related to maintaining the property: 
• Expenses related to utilities (water,

electricity, gas, etc.) depend on the consumption (although some municipalities have xed rates). The invoices for the supplies are directly debited to your bank account.

• Community of Owner fees are the fees that the owner of a property located in an urbanization or block must pay for the maintenance of the common areas (garden, swimming pool, etc). If the property is not in an urbanization or block, these fees may not have to be paid, but other expenses such as gardening and rubbish collection may be obligatory.