Buying a property in Spain is relatively simple and it will not cause too many troubles, as long as you follow the steps below that we will discuss.
The following is a rough guide of the buying process, although it differs from time to time, depending on the operation.
Once you have decided the property you want to buy, the normal procedure in Spain is to make a reservation deposit. This can be between 3,000 € and 10,000 €, depending on the value of the purchase. This deposit is accompanied by a booking contract which lists the names, the agreed sale price and any condition that has been agreed regarding the purchase. The reservation deposit is usually delivered to the realtor. It is recommended to never pay a booking deposit directly to the owner because you will lose the legal backing of the Real Estate Agency.
At this point, you should carry out the necessary checks in the registry office of the property, to make sure that all documents of the property are ok, to make sure there are no liens or debts and that the person selling is the current owner.
This final stage is when you pay the remaining amount and the deed is signed by a Notary Public. After the signing of the deeds, your property manager will record the purchaser's name to the local Land Registry.
Buyers should be aware of the costs that involve a purchase in Spain, which is approximately 10 % of the purchase price. This includes the following:
8% transfer properties taxes or VAT if it is a new building.
1 % legal fees (approximately, depends on the manager).
0.5 % Notary fees.
0.5 % Cost of Land Registry.
The expenses listed above are related when buying a property to an individual. In the event that you buy a property from a promoter, the transfer tax is replaced by VAT, applying 8% and 1% of the stamp duty tax (this only applies to properties that are recorded for the first time)
** A 7% VAT is applied for amounts below € 400,000 and 8% for higher amounts. A new initiative has been introduced by the Spanish government from July in this year to the end of it; they have lowered to 4% VAT which only applies to properties purchased directly from the promoter.
The Spanish nationality buyers only need their ID (all the people who appear in the deeds).
If you are not a Spanish resident, the Ministry of Interior of Spain, forces you to obtain a certificate of non - residence, thereby achieving your tax number, with which help you to sign your papers. You will also need this number to pay your taxes. This document is also known as NIE and it is obtained in person at the local police station or through your lawyer for a small fee.
We recommend you to open a bank account at the time you start the purchase of a property, because you will need it not only for itself but also for the direct payment of supplies such as electricity and water.
It is also advisable to have a Spanish will. This will is going to be only related to your assets on Spain and it does not concern to the assets of your country of residence. This simplifies the process of succession in the unfortunate event of death of the owner and significantly reduces the duration and cost of the process.