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Guide to buying property in Spain

The information provided below is for guidance purposes only.

It has no legally binding status.

 

Where and what type of property should I buy?

The estate agents at PROPERTIES COSTA BRAVA have lived in the area for many years and consequently know it very well. Our experience is your best ally when it comes to providing advice on the property that will best suit your needs, taking into consideration the location, price and features of the property, which can be very different. PCB offers a wide range of properties to match different lifestyles.  For example, you might choose the luxury of a property on the seafront to enjoy the Mediterranean in all its glory, a peaceful farmhouse in the heart of the Empordà countryside surrounded by greenery, an authentic medieval town house, or a contemporary villa with all mod cons. Similarly, our customers have different needs depending on whether they plan come to the Costa Brava simply for holidays or for longer periods of time.

 

Checks and searches

Before signing a sales contract, the estate agency will check the urban registry details of the property against the municipal council plan.

It will also check to ensure the property is free of all liens, encumbrances or mortgages. You can ask the seller to provide a land registry certificate (nota simple) from the Property Registry. This document is proof of who the registered owner is under the law and if there are any liens or encumbrances. The seller must also provide proof that utilities and tax payments are up-to-date, such as the local property tax (IBI), gas, water, electricity, telephone and any other municipal taxes.

 

Making an offer

The purchase price is usually negotiable in Spain.

THERE ARE THREE BASIC STEPS WHEN BUYING A PROPERTY:

1. RESERVATION AND DEPOSIT:

The buyer and seller sign a simple reservation contract and the buyer pays a modest deposit as a gesture of good faith. This confirms the agreement between the buyer and seller, subject to the result of property searches, and removes the property from the market, keeping it reserved for the buyer for an agreed period during which the solicitors will prepare a private sale contract.

 

2. PRIVATE SALE CONTRACT:

This is a simple agreement between the buyer and seller in which the seller agrees to sell the property and the buyer agrees to buy it at the agreed price. This contract will include all the relevant details such as the Registry description of the property, the purchase price and the date of the final payment. At this stage the buyer is required to make a deposit to the seller's account, which is usually 10% of the final price. This private contract is almost always a binding one: if the seller decides not to continue with the sale of the property, he/she is obliged to pay the buyer twice the amount of the deposit as compensation; if the buyer decides not to proceed, he/she loses the deposit.

 

3. COMPLETION OF THE PURCHASE: Deed of Sale

Before signing the deed of sale, buyers who do not have Spanish nationality will need to apply for an NIE (the fiscal identification number for foreigners in Spain) and open a bank account in Spain.

Completion of the purchase takes place before a Notary Public where the deed of sale is signed by both parties, the remainder of the sale price is paid, usually by banker’s cheque, and the buyer takes possession of the property, free of liens and encumbrances. The Notary will then submit the Deed to the Property Registry to confirm legal ownership.

 

What purchase costs are involved?

Property Transfer Tax (ITP)

For second-hand properties, the property transfer tax in Catalonia (ITP) is now 10% of the price on the deed of sale (since November 2013). There is no transfer tax on new properties but they are subject to 10% VAT (IVA), plus 1.5% of the sale price as Certified Legal Document Tax (AJD). For plots, commercial premises or garages the VAT rate is 21%.

 

Notary and Property Registry Fees

These fees are established by law on a sliding scale, and range from 0.5% to 1.5% of the sale price.

 

Mortgage fees

The usual fee for establishing a mortgage is around 1% of the sale price. There is also a tax on mortgages of around 1.5% of the sale price.

If the property already has a mortgage, it can be worth changing it into your name at the time the deed of sale is formalised.

 

Recurrent taxes

As the owner of a property in Spain, you are required to pay a local property tax every year which is known as the IBI (Impuesto sobre Bienes Inmuebles). The amount of this tax depends on the assessed value of the property and its location, as different towns and cities apply different percentages.

 

After the purchase, Properties Costa Brava is always available to offer our customers any advice they may need. Usually, your solicitor or lawyer is responsible for changing utility contracts into your name and arranging payments of local council taxes such as the IBI and rubbish collection rates. If your property forms part of a community, you will also need to pay the community fees, which vary depending on each community. For advice on insurance, taxes, banks, finance or indeed any other aspect of life in this wonderful area, we can introduce you to the best professionals who will be able to provide help and guidance.