GUIDELINES TO PURCHASING A PROPERTY IN SPAIN

New Properties:
Reservation/Deposit: Once found, the first step is to pay the reservation / deposit fee, which can vary from builder to builder, normally between € 3000 and € 6000 . This then takes the property off the market whilst negotiations between the parties legal advisors are held. Usually it is paid by the purchaser at the developers or lawyers offices by means of credit card, cheque, or cash and since it is part of the purchase price it is generally non refundable.

Exchange of Private Purchase Contracts:
Once the property has been taken of the market by the signing of the reservation, a private purchase agreement will be drawn up between the promoter/builder and the purchaser. The terms and conditions of the purchase are stated in this contract: identification of the parties, property and price, customer guarantees; payment terms; completion date, etc. Usually, contracts are exchanged within 30 days as from the reservation.
The presence of the purchaser at this stage is not needed. A lawyer could act as verbal mandate.

Title Deeds: (“Escritura”) 
Your law firm will prepare the documentation required for the transfer of ownership. On the appointed day, buyer and seller, and/or their legal representatives, meet at the notary’s office to sign the official transfer of the title deed from the seller to the buyer. (escritura)  The witnessing of the accompanying documentation by the notary acts as your legal safeguard that the change of ownership will be recorded in the official registry and completes the process.  This will leave you reassured in the knowledge that your property is official and free of encumbrances.

Fees and Taxes:
Generally speaking, the costs attached to the purchase of a property are around 10% of the purchase price or 12% if you are financing your purchase through a mortgage. (This does not include the fee for setting up the mortgage).

Notary & Registry Fees:
Usually paid by the purchaser and related to the purchase price. (Included in the 10% above).

Purchase Taxes:
In the case of newly completed properties the applicable tax is VAT (Value added tax), which is levied at 7% for homes and 16% for storage or parking (when purchased separately from a home) and a stamp duty of 1%.
In the event that you purchase a ‘re-sale’ property, the relevant Transfer Tax stands at 7% of the purchase price and the 1 % stamp duty does not apply.
If you decide to use a Spanish Mortgage, please note that it will be contained in a separate title.  This means that you will have to pay a set notary and registry fees, as well as the 1% Stamp duty on the total mortgage liability.

Legal Fees:
These vary between 1% and 2% of the purchase price and include the complete set of legal services, from the moment you find a property to the point at which the title deeds are transferred into your name.