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Find a property/make a offer.
Obviously before you can purchase a property, you need
to find one. There are two ways in which this can be
done. An organised “whistle stop tour” or
a house hunting holiday. We highly recommend the second
option because this will allow you more time in a specific
area. From our experience, it is generally a good idea
to rent a property in the area in which you are thinking
of buying, to ensure that you are making the right decision.
Once you decide which property you are interested in
you then need to make an offer. Once the offer has been
accepted, you will need to find a Solicitor or “Gestor”.
He will guide you through the legal formalities and
answer any questions that you may have. Our company
can provide you with the names of local English speaking
solicitors in the area. You can however choose to enlist
the services of a solicitor or “Gestor”
of your own choice.
It is very important to ask the solicitor for the cost
of buying a property in Spain. We will explain later,
but on average the property price will increase by 8-10%.
2 Before purchasing a property.
Once you have decided you wish to purchase a property
your “Gestor” will contact the land registry
to ensure that the property is available for sale, and
if there are no problems you will be asked to put down
a deposit (normally 10% of the asking price). This deposit
then forms the contract between buyer and seller. You
will be asked to sign the contract which includes the
buyers and sellers details, the property details, the
price and the title deeds signing date. If you subsequently
decide to pull out of the deal, you will lose your deposit.
If the seller reneges on the deal, he has to refund
double the deposit. This is normal practice in spanish
law designed to ensure that the buyer and seller are
serious.
Now that you have paid your deposit, under normal circumstances
the house will be yours. Your solicitor or Gestor will
organise everything on your behalf to ensure that the
purchase will be completed successfully.
3 Title deeds signing process
Before signing the title deeds it is necessary to discuss
with the solicitor the method of payment. In Spain the
remaining balance on a property is divided into two
categories, declared and undeclared value. Normally
you will pay between 50 to 60 percent of the property
value by cheque or bankers draft: this money is then
declarable and subject to a 7 % tax levy. The remainder
of the balance is then paid in cash, this reduces the
amount of tax payable and is widely practised in Spain
when buying property.
Other fees payable are notary fees, approximately 1%
of the declared value, land registration fees, approximately
0,5 % of the declared value, and the solicitor or Gestor
fees, between 600 and 1800 € (depending on area).
Although all these fees are payable after completion,
it is normal practise to leave a deposit with the solicitor
or the Gestor in advance, he can then pay any fees due
without any unnecessary delays.
Once the details have been finalised, an appointment
will be arranged for you to visit the office of the
notary to sign the title deeds. your solicitor or Gestor
will have already checked the following details for
you:
- The mentioned land registry information
- Former utility bills are paid and up to date.
- The Council tax is paid
- The Catastro information. Catastro is a Council Department
responsible for all land and planning archives. It is
advisable to check that the Catastro information agrees
with the land registry information.
Then you will proceed with the signing of the title
deeds. Present will be the notary. He is responsible
for ensuring that the title deeds are in order and once
signed in his presence they become a legally binding
document.
Buying with a mortgage.
If you are purchasing a property using a bank loan
or a mortgage, the situation is very similar to buying
a property in England. The bank will arrange for someone
to view the property and value it. Then an official
from the bank will accompany you to the notary office.
If you have purchased your property using a mortgage,
you will incur separate fees, for example a valuation
fee (appr. 250 €), and duplicate document fees
(appr. 500 €) plus a 1% stamp duty on money borrowed.
4. After signing title deeds.
After signing the title deeds, the house is now yours.
You will receive your keys on the day of signing in
the notary´s office. You are now free to move
in whenever you choose. Your solicitor or Gestor will
now carry out the following:
-pay the transfer tax.
-pay the notary fees. This includes a copy of the title
deeds (escritura). The original copy remains in the
office of the notary.
-ask for the Land Registry registration. This can take
between two weeks and two months depending on how busy
they are.
-notify the utilities companies.
-change the ownership of the finca in the “Catastro”.
Buying a plot of land to build your own house.
If you are intending to buy a plot of land, it is highly
recommended that you use a solicitor to check the boundary
details, as these are not always very clear when viewing
the local plans.
Once your solicitor or Gestor are happy with the details,
and the purchase of the land has gone through, you will
need to employ an architect. then he will draw the plans
up and if you are happy with the final draft he will
send them to the “Colegio de Arquitectos”
for approval. This normally takes approximately one
month. Once the plans are returned to the architect
he will then submit them to the local authority (Ayuntamiento)
who issue the building license. This normally takes
six weeks. When the license has been issued you can
then start building (It is common sense to use only
approved builders and to get more than one quote. Feel
free to ask them to show you previous projects. ).
The fees charged by architects in Spain are between
five and nine thousand euros, on top of which you need
to pay for the building license ( appr. 3% of the building
cost).
Once the house is built you will need to register it
with the “Ayuntamiento” who will inspect
the property and issue the “cédula de habitabilidad”
(certificate of approval).
Finally the notary will issue you with your house title
deeds (escritura) and this house will be submitted into
the Official Land Registry, the cost of which is as
follows:
- 1% house value ( stamp duty).
- Approx. 400 € notary fee. and 350 € land
registry fee. (both based on a 60000 euros house building
value)
To conclude with, buying a house or a plot of land
is a very easy process if you use professionally qualified
people at all stages of the procedure. In Spain there
are very good estate agents, solicitors and building
companies, so it is often a very good idea to enlist
the help of someone local who has had prior dealings
with them.
(This guide is compiled by Pedro M.
García Belmonte (Spanish solicitor). For any
suggestions, comments or enquiries about this guide
or other legal questions please e-mail to gbelmonte@gestores.net.
All rights reserved. No part of this guide may be reproduced
or transmitted in any form or by any means without prior
permission from the author) |
