The Spanish Property Buying Process

The process of purchasing a property in Spain may be slightly different to what you are used to. Below is a basic guide to your property purchase and outlines the steps taken and what you are required or advised to do at each stage.

If required, Barrington Homes have a recommended lawyers who can carefully guide you through all the steps of your property purchase ensuring a smooth and careful transaction is made and also that you are kept fully informed every step of the way.

STEP 1 RESERVATION DEPOSIT:

Once you have chosen your new home, the first step is to lodge a deposit with the Estate Agent (usually €6000) and sign a reservation document.

STEP 2 PRIVATE CONTRACT:

The signing of the Private Purchase Contract. The intervention of the lawyer is appropriate at this time in order that the terms and conditions of the offer are correct. The lawyer will also help the buyer find out what the ongoing taxes are on the property. For resale property a payment of 10% of the total sale price is required, payable at the signing of the contract. For "Off Plan" developments this percentage may vary from 20% to 40%.

STEP 3 INSTALMENTS:

With Off Plan property purchases, some developers may require "during construction payments". Payment schedules vary per development. For a resale property usually no payment terms are required.

STEP 4 COMPLETION:

The purchase is formally completed when the public title deeds are signed before a Notary Public, the agreed balance of the purchase price is paid and the ownership of the property is passed on to the buyer. Unless agreed otherwise, the public deed always stipulates that the property is sold free from charges and encumbrances.

IMPORTANT NOTICES:

1. COSTS:< Allow approximately an additional 10 -12 % of the purchase price for costs and expenses. (The Spanish national average is 12.2%) This will allow for Property Transfer Tax (I.V.A.) 7%, lawyers fees, notary fees and stamp duty of approximately 3%. If a mortgage for the property is required an arrangement fee will also be charged by the bank and is charged in addition to the borrowed mortgage amount. If a mortgage is not required to purchase the property costs are more likely to be approximately 10 - 11% of the property purchase price.
2. Lawyer: The notary is a public official who is only there to record the fact that the Title Deed has been signed in his presence and understood by the parties concerned. Barrington Homes can offer basic guidance regarding the property purchase process however we always strongly recommend to use a lawyer in all property transactions who will guide you through all legal procedures. They will provide the legal guarantees for the purchase of the property ensuring that Spanish legal requirements are met and that the property is bought free of encumbrances, charges, debts and up to date in all its payments of local contributions and community charges.
3. Mortgage: As a citizen of the European Union mortgages on a second home are readily available by Spanish banks. The rates and conditions are quite favourable in comparison to U.K. lenders however the percentage you are able to borrow is more limited.