ESSENTIAL INFORMATION ABOUT BUYING IN SPAIN
If you are considering buying a property in Spain you need to be aware of the legal process and all the additional costs. This buying guide is designed to give you a clear overview of the process, fees and taxes involved.
However, if you have any questions about this please feel free to call or email us and we'll be happy to answer any of your queries or clarify any of the points listed below for you.
All prices on our website are listed before taxes and legal costs.
Additional Purchase Fees
In addition to the asking price you will need to add the following purchase costs and fees:
- 8% ITP on re-sales or 10% IVA (VAT) on new properties
- Land registry & notary fees 1% to 2%
- Mortgage costs (including stamp duty) and set-up fees are approx 1% to 2%
- Solicitor/Legal fees. Typically €1,000 to €1,500 + IVA (VAT).
- Stamp duty 2% - on new properties only
The purchase fees will differ depending on what type of property you buy, whether you are taking out a mortgage and which region it is located in. However, as a rough guide you should expect to pay around 15% for new properties and 13% for re-sales on top of the asking price.
Reservation Deposits and Payment Schedules
All properties can be reserved with a €5,000 deposit which can be paid with a credit/debit card or by electronic bank transfer. Once this is paid the property will be removed from the market. In most cases you will be required to pay a second deposit 28 days after the first deposit to cover 10% of the total cost of the property.
- Property price €100,000 - total amount of deposit required 10% = €10,000
- First deposit of €2,500 - on reservation
- Second deposit €7,500 - paid 28 days later.
That said, on occasions the completion can be within or very close to the 28 days. In these circumstances it may be possible for your solicitor to negotiate that the second deposit is not paid and the total outstanding amount is paid on completion.
Número de Identidad de Extranjero (NIE)
When buying property in Spain you will need to obtain an NIE number (Número de Identidad de Extranjero) which is the equivalent of a UK National Insurance Number. As long as you have put Power of Attorney in place then your solicitor can apply and obtain this for you within a few days.
Whenever buying a property we would always recommend independent legal representation. There are a number of very good local solicitors that speak excellent English. If you do not want to keep flying back to Spain during the buying process we would recommend you grant your solicitor Power of Attorney. With POA in place your solicitor can obtain your NIE number, open a bank account, sign on completion on your behalf and also set up your utilities. Your solicitor will only act under your specific instructions and usually only when they have written approval from you. The costs of a solicitor is usually around €1250 + IVA (VAT) will include obtaining your NIE, full conveyancing, signing on completion, connection of utilities, setting up direct debits for community fees and council tax and even drafting your Spanish wills.
You will need to open a Spanish Bank account when buying a property. We can assist you with finding the right bank for you and with opening an account. However, most Spanish banks in the region have English speaking staff and also offer online banking in English. So in reality there is very little difference between opening and operating an account in Spain and one in the UK.
Whilst there still some bank owned properties offering up to 100% mortgages the usual LTV for non-residents at the moment is between 60% and 70%. However, as in the UK, finance is offered in line with the applicants specific financial status. We can provide you with contact details or make an appointment for you to speak with a specialist Spanish Mortgage Broker. They will be able to evaluate your own personal financial situation in more depth before advising you on what finance options would be available to you. If you are looking for a mortgage in Spain then we would always advise you to speak with a mortgage broker before you travel to view properties. This way you will already know what budget is available to you and what the likely terms of the finance would be should you find a property you want to purchase.
Whilst this can vary widely depending on each party's situation we would usually expect completion to take place between 5 and 8 weeks after paying your initial deposit.
Looking After Your Property
We can give you guidance on local property managers who have been operating in the region for over many years. Your property manager is there to ensure that your property is looked after whilst you are away and usually offer cleaning, laundry and general maintenance services.
Renting Your Property
In addition to basic management services our partners also offer both holiday and long term rental services. We also have many years experience in managing and renting property in Spain for clients. We can therefore also advise on potential rental income for most properties in the Region and provide you with accurate data on incomes and running costs.
Anything We Missed?
Whilst this guide covers most of the questions we are frequently asked there may be something we missed. If so you can call us on 07961 222720 and we'll be happy to help.