Enjoy the process of buying and keep problems away from you.
Buying a property abroad is such an important decision, a dream for many people who wants to spend their perfect holidays or a new life in Spain. It can be complicated sometimes as the laws may be similar but not the same as in your country, but with the right professionals in this sector, the process of buying becomes easy and safe.
Related: How to get a mortgage in Spain?
Common pitfalls of buying a property in Spain
Which are the most common pitfalls of buying a property in Spain?
- Not choosing the right location according to your needs: make a list of your requirements and do a research on the area to make sure it is adjusted to want you want, as for example, near from supermarkets, schools, hospitals, etc.
- Not having your personal documents in order: you need to have your personal documents in order, as for example, your NIE, or you will not be able to buy.
- The property is not registered or was built ilegally: it is very important that your solicitor verifies, before you sign the purchase contract and pay a deposit, if the property is fully legal, as not all buildings can be regularized, and if they could, they should be under the seller's costs.
- Not having calculated in your budget the legal expenses to transfer the property into your name: there are aditional costs related to the procedure of the purchase of a property, as Notary invoice for the purchase deeds, property taxes, Land Registry invoice and legal fees. These mentioned costs means around an extra 14 % on top of the property price.
- Signing a purchase contract you do not understand and not checked by your solicitor: it is very important that you wait until the contract is checked by your solicitor and your questions answered with regards to the contract, to avoid problems between the parts.
Steps to buy a property in Spain
Here we are going to summarise the main steps to buy a property in Spain safely:
- Once you have found the property you like and have done a research on the area, it is strongly recommended you contract a lawyer who speaks your language. Your lawyer should protect your interests, check if all property taxes are paid, if there is any charge on the property or any unpaid utility and/or community bills and verify all the property documents.
- When you have the confirmation from your lawyer that all property documents and checks are done and in order, then a purchase private contract is signed and a deposit paid. Your solicitor may prepare the contract and give you information about how to pay the deposit to take the property out of the market.
- You need to apply for a NIE (Spanish number for foreigner needed to register you with the Spanish system). You can apply for it yourself at the National Police and in the Spanish Embassy or Spanish Consulate of your country, or, but also it can be obtained on your behalf if you grant power of attorney (normally to your solicitor who will represent you during purchase process).
- Completion will be done at the Notary office, where purchase title deeds are signed, final payment is done and keys received.
- After title deeds are signed at the Notary, you need to pay the notary fees, transmission taxes and registry invoice to register the property into your name at the Land Registry office. Also you need to change property bills into your name.
Costs associated to the purchase of a property in Spain
As a buyer of property in Spain, you need to pay certain costs and taxes over on top of the property price. Depending if you are buying a new property from the builder or a resale property you will have to pay VAT and Stamp Duty, or a transfer tax.
The common costs whether you are buying a new property or resale one are:
- Notary costs for the purchase deeds.
- Land Registry costs.
- If you are buying a new house from the builder, you have to pay VAT and Stamp Duty tax. At the moment VAT (called IVA) is 10 % in Spain (excluding Canaries which have a different rate) for houses and appartments. The Stamp Duty (called AJD) changes from the region, being in Alicante's province 1'5% of the price of the purchase.
- If you are buying a resale house, you have to pay Spanish Transfer Tax (Impuesto sobre Transmisiones Patrimoniales – ITP): The Transfer Tax rate changes from the region, being in Alicante's province 10 % of the price of the property. In this case there is not VAT to pay.
- Legal fees: This is an aditional expense, but it is highly recommended that you contract the services of a lawyer to help you during the buying process.
If you are interested in buying a property in Spain and want more detailed information, please download our free guide "How to buy your property in Spain safely" and contact us by email at firstname.lastname@example.org, by phone at (0034)965717175 or via the online form. Our experts will be pleased to advice you.
Visit our homepage to find more about our solicitors and lawyers in Torrevieja, Alicante, Spain.
Founder & Chief Executive Officer. Oremfi by Aserpro.