It all starts with a dream. About a life in the sun. About an investment. About a holiday home at warmer latitudes. Before you start your search, we recommend that you start by thinking through the conditions and what you are really looking for.
As a first step, we suggest that you find out how much you have to spend and make sure you have the finances ready, to first and foremost know what type of property both fits and is realistic.
Are you planning to finance the purchase with a bank loan in Spain or in your own country? Feel free to ask us about contacts to investigate your possibilities directly.
Keep in mind that in Spain there is an additional 10-13% on top of the purchase price, in the form of taxes and fees. Regarding the advertised price, it is usually possible to negotiate a little bit, but not always.
Once you have control over your financial basis, we suggest that you put your wishes on a list. What do you see in front of you, what does the dream look like if you visualise it? Is is a villa, townhouse or apartment? Is it close to the sea or maybe a few kilometers away with beautiful views? Do you have friends who already live here and that you want to be close to? Are you looking for city pulse, gated community or something on the countryside? Newly built or second hand? How much space do you need? What activities do you want to be close to? Will you have a car on site or use public transport?
Once we know what your wishes look like, we can send concrete suggestions to you. Or we start by unconditionally looking at areas together, in order to gradually rank the requests and be able to concentrate the search.
Once you have found the right property, this it what happens:
When you have chosen a property, which may or may not be a new build, you pay a deposit to make sure the property is taken off the market. A reservation contract is signed in which the price and the maximum period for signing the private purchase contract, are established. Simultaneously many buyers choose to hire a legal representative to assist during the buying process. When the reservation is made it is time to apply for the NIE-number and to open up a Spanish bank account number.
This document will show the way in which the sale/purchase will be carried out. By signing it, you and the seller are bound by the obligations within. The owner and his/her legal representative, will forward to you and/or your lawyer the property’s paperwork, to be able to study the state of the property from a legal, tax and urban planning point of view.
The contract will include a description of the agreed means of payment and anything else you may have agreed with the agency (move in date, whether or not it’s furnished, etc.). Signing the contract will likely entail a payment of between 10% and 20% of the total price, with the rest due on signing the title deed and completing the sale/purchase.
Between 0 and 15 days. If the property in question is a new home, this may take a little longer, as the contract will be signed when the property developer specifies and always when they have obtained the building permission.
Approximately a week before signing the title deed, your legal representative will ask you to transfer the necessary funds to complete the purchase payment and cover the relevant expenses. To this effect, the control protocols regarding investment must be met and it is compulsory to certify the payment methods. This is part of your lawyers job and he/she will deal with this matter. To do so:
The expenses can range between 10% and 13% of the sale/purchase and are:
Property Conveyance Tax of 8% for transactions up to €400,000, 9% in the bracket between €400,001 and €700,000, and 10% from €700,001 and above. (In Andalusia this tax is a flat rate of 7% until the 31st of December 2021.) If the purchase is made directly from the property developer, the tax will be the applicable VAT at that time (at the moment 10%).
It varies and depends on the agreements made in the contract. When it comes to second-hand homes, it usually takes 1-2 months and for properties sold off plan it can be several months.
The deed has now been signed and you have the keys to your new home. Congratulations!
The most technical and legal part of the sale/purchase is over, but the lawyers job is not done yet. There are a number of small but important procedures to carry out:
Direct debit and connection to electricity and water. The previous owner may have turned off the water/electricity that were in his/her name (they are entitled to do so). It may be that they are more cooperative and leave the connection so that you only have to change the name of the title-holder. In both cases you may request a technical certificate to show that the installation meets existing regulations or ask for a technician to be allowed inside the property to check the installation. If the property is old, you may have to modernise the installation and this would be an additional expense.
It is important that you bear in mind that there will be a gap of 15 days from the moment the contract is signed with the electricity/water company to the moment it takes effect. To avoid any unpleasant situations we recommend that you communicate with your lawyer regarding when you expect to move in.
You need to register as the property owner in the Cadastre office and at the Town Hall. You also need to arrange a direct debit to pay for the IBI (local property tax) and the duties or rates that are issued by the local council (garbage collection, vehicles, sewage, etc.). Your lawyer will help you with this.
Depending on the purchase date and on the date the bills are issued by the council, it’s possible that your ownership and direct debit may not be effective until the following year. You will be duly informed. You will need to be registered as an owner with the community of property owners and arrange a direct debit to pay for the relevant fees.
Do you want to buy or sell a home on the Costa del Sol? Are you curious about what the market looks like or how the process works in Spain? No matter what your questions or comments are, we will be very happy if you want to get in touch with us! Feel free to tell us in as much detail as possible how we can help you, and we will respond as quickly as we can.