How to buy a House in Spain
When you decide to buy a house in Spain, it is essential to understand that although the contracts will vary slightly depending upon the property type, there is a specific buying process for each that must be followed.
FIRST STEP: RESERVATION
OFF-PLAN, NEW BUILD & RESALE PROPERTIES
After reviewing suitable properties for sale in Spain and making your purchase decision, the first step will be to secure the property and take it off the market.
· Reservation Deposit/Down Payment: Typically, € 6,000*
*Reservation deposit varies depending on each developer or Reseller
Your lawyer will have around 14 days for the due diligence, review the legal documents, and ensure everything is in place. Afterwards, reservation or private purchase contracts will be prepared.
SECOND STEP: PRIVATE PURCHASE CONTRACT
This is the moment that both parties formalise the purchase by signing the private purchase contract (PPC). That means, now you are legally bound to complete the purchase as the developer to sell it. The exchange of the contract is accompanied by a deposit of between:
RESALES
- Down Payment Resales: Typically, 10% minus reservation deposit and the Title Deed signing will be agreed
- Remainder upon notary date agreed with both parties. The title deed will be signed, the keys will be handed over, and your property will be registered at the Land Registry under your name. (on average 2-4 weeks later)
OFF-PLAN
- Down Payment Off-Plan: Typically, 20-30% minus reservation deposit
- Remainder upon completion of the property. The title deed will be signed, the keys will be handed over, and your property will be registered at the Land Registry under your name.
LEGAL SERVICES
To ensure your interests are safeguarded, we recommend using a Spanish lawyer who speaks your language to manage the entire purchase process.
Depending on the services required, the legal fees for buying a house will be between 1-2% of the property value (plus IVA). Your lawyer’s responsibilities will include:
- Obtaining your NIE number (Identification number necessary to carry out any financial
transactions in Spain). - Opening a bank account
- Due diligence proceedings
- Lawyer will draft and prepare the necessary documents
- Finalizing payment of taxes (Transfer tax/ VAT), Notary and Registry fees
Alternatively, you can give your lawyer power of attorney so that they can handle all of this on your behalf, including signing.
MORTGAGE
Getting a mortgage in Spain as a foreigner to purchase a property will incur extra costs, noted further down.
The mortgage provider will generally require the following documentation:
- Income tax declaration for the past two years
- Bank statements from the past year.
- Payroll or other proof of income for the past six months.
- A list of mortgage loans already held.
- A statement of your assets and liabilities, confirmed by an accountant.
- Copy of your passport
ADDITIONAL COSTS INCURRED IF YOU REQUIRE A MORTGAGE FOR A PROPERTY IN SPAIN:
- Other fees (Gestoria, Registry, property valuation, Notary) 0.8%
- Mortgage stamp duty: 1%
- Bank mortgage commission: 0.25%
FEES AND TAXES
We have noted below the property lawyer’s fees for the purchase, up to 13%. If you require a mortgage, there will be an extra charge, as mentioned above.
- Taxes (VAT): 8-10%
- Notary fees: 1%
- Registration of property: 1%
- Stamp duty: 1%
Contact us for assistance with finding the best homes for sale on the Costa del Sol and more information about the costs involved in buying a house in Spain.
