Purchasing a property in Spain need not be as daunting as it may at first appear. It is important however to follow some basic guidelines.
Firstly, you need to make sure you understand the basic process of purchasing a property in Spain – it is, in many ways, similar to the way in which you will buy a property in other European countries but there are some key differences.
It is essential to find a good quality Spanish lawyer who speaks English or have staff who can translate your language. Ideally, they should be in the area you intend purchasing so they can work with the local town hall, registry office, banks etc.
Nerja Properties has no connection with any local lawyers however, over a number of years we have been able to identify those that appear competent and professional.
If you would like to benefit from our experience, please feel free to contact us and we will be able to give you some guidance on the things you should ask a lawyer and the things that you will need instruct them to do if you find a property you wish to purchase.
We have broken down the purchasing process for you in to 5 steps:
- Viewing Properties
- NIE, Bank Accounts and Mortgage Application
- Making an offer and reservation
- 10% deposit and signing of private contract
- Signing of title deeds
Starting with your budget and requirements we will select and narrow down some properties to show you, we search our own property listings and that of other estate agents in Nerja so that you don’t miss out on any property for sale. There are nearly 100 estate agents in Nerja and many are now online so it makes more sense to assign ‘Nerja Properties’ as your agent so we can scour the market for you.
NIE, Bank Accounts and Mortgage Application
Meanwhile we will set aside one viewing morning to apply for an NIE number, the NIE number is required when purchasing a property in Spain and becomes your NIE number for life.
We help you fill out all the forms and take you around the various departments to pay the admin fee at the bank etc, once we have applied for the NIE number we will be able to collect it for you on your behalf 3 weeks later once its ready for collection if you are not available.
Setting up a bank account in Nerja is straight forward, this is done with just your passports and your current address. If you are apply for a mortgage you set this in place at this time, its an important step to send over any required paperwork like payslips etc before arrival so we can get you pre-approved otherwise the process could be slowed down.
Making an offer and reservation
Once you have made an offer and the price is agreed its very important to pay the reservation fee to hold the price with the vendor, this can be paid at your lawyers or at Nerja Properties office.
A reservation document is prepared to take the property off the market for a period of 21 to 28 days which the vendor will sign, the standard amount is 3000 € but can depend on the price of the property and the vendors requirements.
During this meeting the lawyer will explain to you the purchase process, give you a payment plan with a total estimate of the total purchase and outline in detail the charges and what will be provided by way of service in return. This includes searches on the property to establish ownership and resolve outstanding debt and more importantly, checking that the deed (Escritura) is in order and that it matches the building and land being offered.
The lawyer in Nerja will also check building licenses are in order and that the owner or developer has satisfied any local planning conditions prior to offering the property for sale.
10% deposit and signing of private contract
You will then need (with the help of your lawyer) to draw up the private purchase contract that confirms the basis of the sale and any specific terms agreed between the lawyers. Until such time as this contract is signed the property can still be sold to another party. Once the contract is signed and a deposit (normally 10% of the purchase price) is paid then you have effectively exchanged contracts and this now means the house is sold and a completion date is fixed.
Depending on when you would like to take possession and your personal circumstances you will now set the completion date.
Signing of title deeds
Your lawyer prior to completion will make sure that all IBI taxes have been paid and there are no ongoing liabilities for you.
Once you have bought your property you will receive on the day a ‘copy simple’ which is a copy of the title deeds for the property you have just purchased. You can now register at the town hall, change utility bills in to your name etc however your lawyer will normally take care of these items.
Also following the signing at the Notary, your lawyer should then forward the “escritura” to the Property Register for public registration – this register holds information about the legal ownership of the property together with details of mortgages, any other charges and rights of way etc.
There are a number of fees and taxes which will be payable on any property that you purchase in Spain, these will vary for each property however the general likelihood is that 10% to 11% of the purchase price will be needed to cover all costs.
This is broken down in two taxes to pay – the first is the Andalucian transfer tax (known as Impuesto sobre Transmisiones Patrimoniales). This is charged on all private resale properties and equates to 8% of the declared value within the contract but is on a sliding scale for more expensive properties.
If you purchase a brand new home directly from a property developer the tax will be the same as the 8% charged on re-sale properties although it will be known as IVA as it is referred to as a business transaction rather than a transfer between two private individuals.