Buying a property is not something that most people do on a daily base. Especially in a foreign country.
That’s why it’s good to have a step by step buying guide explaining how the buying process works in Spain.
Due to firm laws and regulation the buying process in Spain is a straight forward and transparent.
Once you have found your ideal property on the Costa del Sol and you have decided to move forward with the purchase, a reservation agreement will be drawn up by our Office Manager.
A reservation agreement is used in Spain as a standard procedure to reserve a property for a specified period of time whilst your lawyer conducts the Due Diligence.
The reservation agreement includes the agreed sale price, any conditions you may have before you feel comfortable to make the purchase. Conditions may be: you need a mortgage approval from your bank, the due diligence research, etc.
A deposit (usually 6.000 euros) will secure the property while the “Due Diligence” is being conducted. This deposit can be held in the BuenaVista Homes company client’s account or with a Spanish lawyer of your choice.
The 6,000 Euros serves to reserve the property whilst your chosen lawyer conducts the due diligence and meanwhile you may arrange a mortgage.
This reservation deposit is fully refundable in the event that your lawyer should discover any legal impediments pertaining to the said property. Should you continue with your purchase after the Due Diligence the 6,000 Euros will be used towards the purchase price.
Your lawyer will perform a full and thorough Due Diligence and make sure all property and building licenses are in order, find out if there are no debts on the property, find out if the vendor is the actual owner of the property, all taxes are paid for, etc..
Basically that all the documents are in order and the property is fully legal.
Your lawyer will inform you of their findings and discuss about moving to a private contract if applicable.
The private contract states the exact property details, address, sizes and government registration of the property, the completion date, key handover, and finally terms and conditions as agreed by buyer and vendor.
At the signing of the private contract generally a 10% of the property price is paid.
Completion will be held in front of a Notary.
The buying costs in Spain vary from 10% to 13.5% of the purchase price, as follow:
- 10% IVA (VAT) on new properties, 8% to 10% IVA (VAT) on re-sales properties depending on price category
- 1% Notary fee (notarisation of property cost)
- 1% Legal Fees (a fee charged by your selected lawyer to conduct the Due Diligence)
- 1,5% Stamp Duty Tax (a tax charged to make all documents legally effective)
- If you require a mortgage, you should calculate an average of 1-1.5% cost for the set up fee of a mortgage with a local Spanish bank