your partner in spain
about us
testimonials
exclusive villas
properties available
buying procedures
LRAU law
residential status
client inquiry form
towns & villages
a golfers paradise
nautical clubs
hotels
maps
interesting links
webcams
contact us

the buying process

In all instances we advise that the Purchaser utilizes the services of an Abogado, a Spanish Lawyer, a member of the Spanish Bar Association, the Colegio de Abogados.

The Abogado will deal with all matters relative to the purchase and associated matters including the transfer of service contracts for Water, Electric, Gas and Telephone, if applicable, plus preparation and submission of an application for the Purchaser’s N.I.E. (Fiscal) number (Fiscal identification number).

The Abogado will also ensure that all domestic accounts, in the form of IBI charges (Rates), Basura (rubbish), Community charges, if applicable, Water, Electric and Telephone, if applicable, are paid or a pro-rata allowance agreed, calculated to the date of completion.

Spanish Law authorises ownership by foreigners with relatively few restrictions and the transfer of property is generally less complicated than in the UK, with all properties sold with a freehold title.

The procedure is as follows:

a) A reservation agreement is completed, containing details of the purchaser and the property, together with the agreed price and completion date etc. A deposit is paid, preferably 10% or a lesser reservation deposit followed quickly by the payment of the residue of the 10% deposit.

b) A private agreement is drawn up by the Abogado. This also contains full details of the price, the method of payment and the terms and conditions relating to the transfer of the property. This agreement will contain a clause requiring the vendor to convey to the purchaser a Public Title Deed (“Escritura Publica de Compraventa”) on receipt of the final payment of the property. (In some instances these two documents are drawn up in the form of a single agreement).

c) At completion the transaction proceeds to the Public Deed which is so called, because it must be prepared and signed before a Public Notary (“Notario”) who attests to the identity and signatures of the parties involved. The Public Deed will contain a clause stating that the property is being sold free from all debts, current in payment of all taxes and with vacant possession provided.

d) Upon signing the Deed and making the final payment, a simple copy (“Copia Simple”) is given to the purchaser - the original passed to the Property Registry of the District in which the property is situated for inscription in the name of the purchaser.

e) New Build can be in the form of a plot purchase allied to a separate building contract or a package including th plot and building works – Payments in stages as the works proceed all concluding in the signing of the Escritura as before described.

Expenses involved in a Transfer of Property

(a) Transfer Tax. This tax must be paid by the purchaser before the transfer of the Title Deed into the new owner’s name. It is calculated at 7% of the declared value of the property. For new construction an IVA (VAT) charge is raised at a similar rate of 7% of the declared value plus a Registration Transfer Tax charge of 1%. If land is purchased separately from a company, the IVA rate can be increased to 16%. The declared value is the officially stated purchase price recorded in the “Escritura de Compraventa” (title deeds) and is normally a sum equal to approximately 70% to 80% of the agreed purchase price).

(b) Property Registry Fees and Notarial Fees the amount charged by the Notario for preparing the Public Deed and presiding over the signing, plus fees paid for registration, This is a variable charge and we recommend a provisional sum of 1500 Euros be allowed.

(c) “Plus Valia” tax. The best translation of this term into English is probably Capital Gains Tax. It is a tax on the increase in value of the actual plot of land rather than the building thereon and is in respect of the period since the previous transfer of title by Public Deed. In the case of a new property, this is normally a nominal fee, but in the case of a re-sale property which has not changed hands for a number of years, it can be substantial. This tax is the vendors liability and this will be so noted in the contract.