How to buy a house in spain

The first step, is to choose a good Real Estate Agent in Spain, to assist you properly and offer a wide range of properties. If you have chosen well, a good agency with experience in the market, in the area, with a good network of contacts with other agencies, he will make all efforts to get the property that you want.

The second step, once we have found what we are looking to purchase. In this case, taking into account all legal requirements, the status of the property and tax issues of the operation you can simply sign a public title deed and complete the purchase. For most buyers, however, there are additional steps before completion that usually require the services of a Spanish lawyer.

Taking the property off the market: You may have to pay a small deposit to the vendor or their authorised representative to take the property off the market for an agreed period, while your lawyer does due diligence before signing a private purchase contract. Nevado Realty always recommends prior to paying a deposit, confirm with the Land Registry that the property appears under the seller’s name, there are no liens, charges, or legal impediments and the description reflects the actual situation. The contract should also let you recover your deposit, after signing, if unforeseen circumstances – like hidden charges or structural problems – make the deal inadvisable. If the sale goes through, the deposit forms part of the purchase price.

Terms and finalized: Some buyers skip the deposit and directly go onto signing a private purchase contract with the seller or the authorized representative, with the payment of 10% of the price. A private contract identifies both parties, describes the property, details the conditions of sale, price, method of payment, date of signing of the public title deed; and stipulates how expenses and taxes will be paid and by whom. Once signed, this is binding on both parties.

Nevado Realty always recommends before signing to examine the details of the property, ensuring that the seller is the registered owner and is not precluded from selling, checking the Land Registry and Cadastre, that there are no outstanding taxes or other charges, and confirm the town hall has no planning issues or other charges.

Nevado Realty recommends to confirm that the property has no structural defects, comply with the law, and its electric and water installations meet the utility providers’ regulations.

Once we have everything clear, the legal status of the property and the seller’s right to sell it, you can sign the private contract. Nevado Realty recommends checking that taxes are paid to date:

1.- Municipal property tax (IBI) and rubbish for the last four years (get a certificate from the town hall stating there are no unpaid debts).

2.- Withholding tax (Retención), if the seller purchased from a non-resident.

3.- Special lien (gravamen especial), for the last four years, if the seller is a non-resident company.

4.- Municipal land tax, if the seller is a non-resident individual, as the Tax Office (Hacienda) can claim this from the buyer.

If the property is in a community, Nevado Realty recommends to check that the seller does not owe any fees, by obtaining a certificate from the president and the administrator of the community, because if the new buyer may be responsible for current fees and the previous three years.

To complete the sale and become the new owner, a NIE number (Foreign Identification Number) is required. This is the foreign identification number necessary to pay taxes and do paperwork with the Spanish Inland Revenue. Both parties sign the deed before a notary, who testifies to its identity and sets the terms of the sale, including description, price and payment details. Once this is signed and payment made, you will receive the keys to your new home.

Finally, it is necessary to record the transaction in the Land Registry for maximum protection against third party claims.

Apart from the fact, you will be required to pay the price of the house, Nevado Realty recommends an additional 12% (approximately) to cover all costs relating to the purchase / sale: fees paid to professionals, notary, the cost of registering the purchase and the Land Registry and applicable taxes (local and central).

Spanish lawyers typically charge 1% plus VAT, the price of housing services, which usually include all the items listed previously: the details of the property at the Land Registry and the database state ownership for tax purposes (Cadastre), confirming that there are no impediments, taxes or other charges levied on sale, check that the municipality has no planning issues or pending charges and make the purchase contract.

All taxes arising from the purchase must be paid within 30 days from the date of signing of the deed in the public domain. After that, buyers become liable for a surcharge of up to 20% of the tax is pending.

Properties of resale, buyers should pay the transfer tax, depending on the purchase price: (between 8% and 10%)

The new properties, buyers have to pay 10% VAT or Value Added Tax and stamp duty of 1.5% (stamp duty).

Finally, depending on the terms of the contract agreed between the buyer and the seller, the buyer, may also be responsible for the municipal land tax (capital gains).

How to buy a house in spain thanks to Nevado Realty, the home of your dreams in Marbella will be yours, come to know us and stay living!!!

By Fai M. Rodríguez