Despite a recent downfall in the property market things are still pretty buoyant, and foreign buyers are still flocking to Spain in search of the property of their dreams. For those unfamiliar with the Spanish property market the way of purchasing property here might have a few surprises in store especially when compared to the way things work in England.
When you find a property over here that you wish to purchase then the process begins. When your offer has been accepted, you as the buyer will be required to pay a reservation fee which means the property is then taken off the market. This fee is normally between €3,000 and €6,000 depending on the agreed purchase price of the property and is subtracted from the final amount payable.
Around this time a completion date is agreed and this is normally around 30 days after the reservation fee has been paid. A contract is drawn up and a further deposit is paid which could be up to 30% of the purchase price. Those familiar with the English market will see that things move a lot quicker in Spain. If the sale does not go through in this time then you will lose your deposit, unless the sale has not proceeded due to a fault on the seller’s side, in which case your money will be refunded.
This is the time when all legal processes are completed, such as searches conducted and checking of title deeds. It is important that you use a reputable lawyer, preferably one that comes by way of a personal recommendation. Your lawyer will make sure that the seller is legally allowed to sell the property, that there are no outstanding debts or charges against the property and that all building is legal and the correct permission was given.
If you are taking out a mortgage the bank will do a survey of the property to satisfy themselves, it is pretty comprehensive and a copy of this will be made available to you.
The final part of the purchase process takes place in the local Notary office. The buyer and seller will be there normally along with the estate agent (if one was involved) and respective solicitors if requested, although they are not required. If you are paying the balance with a mortgage then a representative of the bank will be there. The notary him or herself will be there and will hand the “Escritura” around to be signed by both parties. It is here that any taxes should be paid and at this point the Escritura goes to the Land Registry to be registered.
Purchase costs do vary from region to region, in the Costa Blanca region at time of writing expect to pay 12% of the purchase price to cover the various costs – legal fees, transfer tax for a second-hand property, IVA for a new build, the land registry fee and the notary fee.
Throughout the process make sure you fully understand every step. If you cannot find a lawyer with good English, then make sure you employ the services of a translator to avoid costly mistakes.
Please note: This information was correct at the time of writing, however, things in Spain change on a regular basis, so you will need to check these facts before making any decisions.