Buy your Property or Rent Villas and Apartments in Costa del Sol

Guide to Buying Property in Costa del Sol

You may arrive in Spain with a exact idea of your ideal Spanish property and, after viewing a selection of properties, end up choosing something completely different. Or, you may have no idea at all other than how many bedrooms you need and how much you want to pay, in this case it is a good idea to look at the different types of property available and see which suits you best. Listen to your own feelings, it is you who is going to live there.

Use a good agent, or agents, who will show you selections of suitable properties. You may find your dream property on your first day looking around and make your decision immediately. Or, more likely, you will look at a number of properties, weigh up the pro's and con's of each, perhaps visit your favourite again and ask a few questions before making your decision. Stick with the agent you feel most comfortable with, who you feel gives you the all the information you require to make your decision.

Once you have found your ideal home you simply reserve the property with a Reservation Deposit, thereby ensuring that the property is not sold to another purchaser. Now is the time to obtain the advice of a good English speaking Spanish lawyer. The best way to choose your lawyer is either by recommendation from a friend who has already bought property in Spain, or from your estate agent.

Using a lawyer is essential. This is your guarantee that Spanish Legal requirements are met, that the property is registered to the vendors name and that it is free of any mortgages, charges, encumbrances, debts or other liabilities. Your lawyer will discuss the purchase terms with the sellers lawyer. The terms should cover the price as well as all your requirements such as fixtures and fittings, completion date, the form of payment etc.

Step- by - step

  1. Reserve the property. A deposit between €3000 - €6000 Euros is usually sufficient. Paying your reservation deposit guarantees that the property is taken off the market and is reserved for you at the agreed price.
  2. Exchange private contract. Within 15-30 days of reserving your property your lawyer will exchange the private contract with the vendor and you will pay 10% of the purchase price(this includes your initial reservation deposit). Before your lawyer exchanges contracts they will have completed detailed searches on the property.
  3. Completion of the sale. On the day of completion we accompany you to the Notary with your lawyer to sign the Title Deed, you make the final payment to the vendor who hands over possession of the property (and the keys). The Notary then faxes details of the Title Deed to the Land Registry confirming you as the new owner.
  4. After completion. Your lawyer arranges for the rates and utilities to be transferred into your name. We are here to help you with settling in to your new home - just ask.


The Costs of Buying Your Property
Apart from the actual price of the property, you should include an extra 10% of the purchase price in your budget, to allow for the transmission costs. Unless otherwise specified, taxes and fees are paid as follows:
The Taxes:
When buying a re-sale property you pay Transfer Tax (ITP) at 7% of the purchase price.

When buying a new property or a property under construction from developer then you pay VAT (IVA) at 7% plus Stamp Duty at 0.5%.

The VAT (IVA) rate increases to 16% if you are purchasing plots of land, commercial premises or garage spaces.


The Fees:
The Notary charges according to a fixed scale set by law, his charges may range from 300 Euros to 900 Euros depending on the price of the property.

Land Registry, as a rule of thumb, is 40% of the Notary fee.

Finally, your lawyer will charge fees for his professional services, normally 1% of the purchase price plus VAT (currently at 16%).


Note:
If you take a mortgage on the property there will be a separate deed for this, which will be billed separately.

Seller pays:
Plus Valia Tax which is a municipal tax based on an officially assessed increase in the value since the previous transfer of the property. The local town hall will calculate the exact amount upon enquiry.

Estate agents are paid by the seller unless otherwise agreed.

Documentation to be Presented for Mortgages

If employed:
  1. Last three payslips.
  2. Last tax return (P60)
  3. Bank Reference to include telephone, fax number, name of manager and account number
  4. Last three statements of your bank account
  5. Statement of current assets and liabilities
  6. Letter from employer stating length of employment and salary etc.


If self employed:
  1. Profit and loss accounts signed off by a Chartered Accountant
  2. Copy of your tax return
  3. Bank reference to include telephone, fax number, name of manager and account number
  4. Last three statements of your bank account
  5. Statement of current assets and liabilities



Locating and purchasing a property in Spain can be as simple, or as complicated a procedure as one wants to make it. Using sincere and well-recommended professionals always helps to save time, money and trouble.