Buying a property in Spain: Legal aspects, fees and taxes;

Buying a property abroad is an exciting experience. However, you must go looking for your home with an open mind. You'll soon realise that it is virtually impossible to find exactly what you want, so you may need to compromise on some issues. Using qualified professionals will protect your interests, making the purchase of your home in Spain a risk free and stress free experience.

It will be usful to a have :

Think about the kind of property you are looking for - The area, size, number of rooms. But keep an open mind. It could be worth looking at different types of properties in different residential areas.

Speak to your estate agent - Only negotiate with those that are officially registered and hold a licence. Make sure you feel comfortable with the agent and start looking at properties. What you'll need the house for will change your considerations. If you're moving to Spain you may want somewhere quieter, but if you plan to rent out the house you may want somewhere more commercial etc. A good agent will help you through the whole purchasing procedure and and will have the necessary experience and knowledge of the property market. He/She will help you find a suitable property. The agent will advise as to the best areas to invest in, comparing prices and qualities.

You should ask for details of the out-goings payable every year to maintain the property:

If you decide to buy property you will be asked to lodge a deposit to take the property off the market. So you make sure that the property isnīt sold to another person. The solicitor will help you with all the paperwork of the transmission of the property, and will check the Spanish legislation and prepare a private contract which will bind both parties to the deal. Itīs usual to pay a deposit of 10 % of the price fixed in this contract, this amount will not be paid back if the buyer cancels the purchase. If the seller doesnīt fulfill his duties, you can cancel the contract and demand him indemnities. You now have about 15 days to get legal information about the property. The solicitor will next prepare the public deeds (Escritura de Compraventa) for signature in front of a Spanish Notary. When the balance of the purchase price is paid and vacant possession of the unencumbered property is granted, the sale is completed.

After going to the notary and the signature of the public deeds (escritura de compraventa) the title deed will be sent immediately to the Property Register (Castastro) to inform them of the identity of the new owner. This will prevent the property from being sold twice. The notary and the land register act together to protect and guarantee your interests. Your solicitor can also arrange for the transfer to your name of utilities and services such as water and electricity and organise through a local bank.

The buyer of a property will have the following expenses:

Notary:
Itīs a fixed cost: for example for a property which amounts to 100.000 EUR it might be 600 EUR.

Registry:
You have to calculate about 40 % of the notary fees.

Taxes:
You will have to pay the Transfer Tax (Impuesto de Transmisiones Patrimoniales). A 7% tax payable on resale properties.
If you buy a new property you will have to pay 7 % VAT (IVA) plus 0,5 % for administration fees (AJD =Actos Jurídicos Documentales)
Impuesto sobre el Valor de Terrenos de Naturaleza Urbana (Plus Valia) A local tax, usually paid by the vendor, calculated as a percentage of the difference in the increased (rateable) value of a property since it was last sold. The seller has to pay this tax by law but in many cases itīs negotiable.
Finally the solicitor will send you an invoice charging his services. In Spain the consumer is protected by Real Decret 515/1080 of April 21.
For your stay in the Alpujarras we will pleased to give you any information you may need.