Listed below is a brief summary of advice on buying Spanish property intended to give a broad outline to first time buyers of Spanish property.The following advice has been compiled by officially registered solicitors and our specialists in advising you on buying Spanish property. Once you have chosen the property you wish to purchase, the next step is to enquire on the features of the property; plans, terms of payment and extras if any. The majority of developers selling off plan property in Spain require the purchaser to make payments during the building process making a final payment upon completion either with cash or a Spanish mortgage and final handing over of keys and Title to it. These payments in advance range, depending on the new development you have chosen, from 30% to 50% of the price plus 7% IVA, payable during the construction and balance at completion. It is quite common when buying Spanish property that the amounts to be paid in advanced (30% to 50% of the total price) be distributed the following way:A small deposit of 6000 euros plus 7% IVA as a reservation fee for the property, for which a receipt will be handed stating the exact unit, total purchase price and payment terms. A further amount is paid at exchange of private contracts normally fifteen days after reservation. Some developers require stage payments during construction, distributed in periodical instalments. Finally the balance of the purchase price is paid at completion either via bank transfer or a Spanish mortgage

Before exchange of private contract your lawyer will have completed searches and investigations that the property you are buying is free of charges and encumbrances and up to date in its tax obligations. The private contract will set out the legal description of the property, price, terms of payment and the obligations of both parties. Specifications and plans of the property (If the property is off plan) will form part of the contract and be attached to it. Under Spanish law the developer is obliged to provide the purchasing party with an insurance policy or bank guarantee. This will secure that any amount handed over by the purchaser (plus legal interest), will be refunded should the property not be completed when agreed. From May 2000 a new Building Law establishes that all developers that applied for license after that date will also have to provide the purchaser with a ten-year guarantee duly bonded against any major defects of the construction.The above mentioned reasons ensure buying Spanish property a secure purchase. When the building has been completed and inspected by the buyer and the buyers agent to their satisfaction, the sale will be formally completed before the Public Notary. A Public Title Deed will then be granted by the vendor in favour of the purchaser against final payment and handing over of keys to the property. The Title Deed is sent to the Registrar who will register the purchase at the Land Registry. Your lawyer will also pay, on your behalf, taxes and all relevant fees due to the Notary and will handle the formalities of registration of your Title Deed. Similarly, you can request your lawyer to contract relevant supplies of utility services such as water and electricity and organise these payments to be made through your local bank in Spain by standing orders. The buyer will have to pay 7% VAT on the purchase price. Please note that this tax accrues with each stage payment meaning every payment you make will be subject to an additional 7%. Stamp Duty is also payable on the purchase price of 1% which is paid in a one off payment at completion. Plus-valia is a one-off local tax on the increase in value of the land on which the property is built, since the last recorded transfer of ownership. Plus-valia is based on the rateable value of the land. The vendor is the subject of this tax, but it may be stipulated that the buyer pays it. Other fees include Notary and Land Registry fees which are set by law and the scale for the Notary will range from 500 to 1,500 euros. Land Registry fees are also set by law and are approximately 50% of those of the Notary. Legal fees for professional services of your lawyer will be approximately 1% of the purchase price of the property. Provisions should be made for bank charges when transferring monies abroad. In summary, the buyer has to allow for an additional 11% of the purchase price to meet the transfer costs involved in the transaction. Vendors will require a deposit of 6,000 euros plus IVA at 7% to take the property off the market. Between 10% and 20% of the purchase price is to be paid at exchange of contracts and the balance on completion. Before exchange of private contract your lawyer will have completed searches and investigations on the property being sold and will secure it is sold free of charges and encumbrances and all tax obligations are paid up to date. The private contract will set out the legal description of the property, price, terms of payment and the obligations of both parties. Spanish properties are registered at the Land Property Registry which will allow your lawyer to confirm prior to completion that the property is sold free of charges and encumbrances and that it is bought from the owner. The sale will be formally completed in a Public Title Deed, which will be granted by the vendor in favour of the purchaser before a Public Notary against final payment and handing over of keys to the property. The Title Deed is sent to the Registrar, who will register the purchase at the Land Registry. Your lawyer will also pay on your behalf all relevant fees due to the Notary, taxes and will handle the formalities of registration of your Title Deed. Similarly, you may request that your Lawyer may contract relevant supplies of utility services such as water and electricity and organise their payment through your local bank in Spain by standing orders. The buyer will have to pay 7% Transfer Tax on the purchase price, which must be paid within a month from completion and prior to the registry of the Title Deed. Plus-valia is a one-off local tax on the increase in value of the land on which the property is built, since the last recorded transfer of ownership. Plus-valia is based on the rateable value of the land. The vendor is the subject of this tax, but it may be stipulated that the buyer pays it. Legal fees Other fees include Notary and Land Registry costs which are set by law. The scale for the Notary will range from 500 euros to 1,500 euros. Land Registry fees are approximately 50% of those of the Notary. Provisions need to be made for bank charges when transferring monies abroad. In summary, the buyer has to allow for an additional 11% of the purchase price to meet the transfer costs involved in the transaction. When buying a Spanish property many banks offer Spanish mortgages at excellent interest rates and offer up to 70% of the bank valuation price for non residents. Please refer to our Spanish mortgage page for further information about Spanish mortgages. Once you have purchased the property ongoing expenses will include community fees, rates, rubbish collection, income and wealth tax, which, as a guideline will be approximately 1.5% of the purchase price per year considering a property with a price of 200,000 euros. Water, electricity and insurance costs should also be budgeted for. When Buying Spanish property making a Spanish Will is strongly recommended. Owners of Spanish property are strongly recommended to have a Spanish Will confined to their assets in Spain, as it will save their heirs having to translate, notarise and legalise any grant of probate or letters of administration issued in their own country. It will also allow them to simultaneously wind up the Spanish and home estates of the testator. Please contact us if you require more information on buying Spanish property. .