Buying Property Spain
To make your move to Spain as stress-free as possible, Property Under 100K only sells new developments that have been thoroughly checked by our team of property experts. If you have any questions regarding buying property in Spain, please don’t hesitate to contact us.
Here’s a brief guide to the purchase process in Spain:
Choosing a location and a property
The first thing you will have to consider is where in Spain you want to buy. We offer a range of developments, some small and intimate, others are very large with lots of facilities. Some are close to the coast, others are inland. Think what you want to do in Spain. Do you want to be near a big city or are you looking for a rural retreat? If you’re thinking of buying-to-let our property consultants can advise you of those areas with the best rental potential.
Sometimes it can be a bad idea to mix business with pleasure, so why not arrange a viewing visit? We can help you with all the arrangements and meet you at your chosen sites and show you around the development and the surrounding area. These are not the ‘high pressure’ sales trips of some companies, rather a relaxed opportunity to make the correct decision for you.
Prior to Viewing
Before arriving in Spain you should establish your budget and remember to add around 10% for additional costs, such as taxes and legal fees. You will need to be able to put down a reservation deposit of circa 3,000 euros to secure the property you choose. Once you have done this it will be taken off the market. This deposit is best paid in cash or by credit card as cheques drawn from British banks can take up to ten days to clear in the Spanish system.
The Purchase
 Once you’ve found the Spanish property you like and paid a reservation deposit, you should contact a lawyer to handle the sale for you. Even though our developments are thoroughly checked, it’s best to appoint an independent lawyer based in Spain to look after your interests and deal with all the paperwork. They will negotiate with the developer on your behalf and keep you informed of all the necessary details.
One advantage with buying “off plan” with PU100K is that you don’t have to worry about issues such as the notorious ‘land grab’ law. As all our Spanish properties are on designated developments you can be sure there will be no nasty surprises in the future.
Exchange of Private Contracts
The next step is to sign a contract between yourselves and the developer. This will normally take place within two weeks of the formal acceptance of your offer. Your lawyer will have completed all the necessary searches and checks on the property. The private contract of sale will reflect all the agreed terms and set out the final date for completion. At this stage it is normal for the buyer to pay a percentage (20-30%) of the purchase price, which is non-refundable.
Completion at the notary
A sale of a Spanish Property formally completed when the public title deeds of purchase are signed before a notary, then the final payment is made and possession given to the buyer. On an assigned day the buyer and seller (or their authorised representatives) will attend the notary’s office to sign the ‘Escritura de Compraventa’. At this point the final payment will be made and the keys handed to the buyer.
 Registration
Once signed, the notary will send the details of the title deed to the local land registry. Your lawyer will then arrange payment of all the relevant transfer taxes associated with the purchase and handle the formalities relating to the registration of your title deed. Final registration of the deed may take up to two months. Similarly, your lawyer will arrange for the transfer of accounts with local suppliers of utility services, such as water and electricity, and organise payment through a local bank.
Costs involved
There are, in principal, three fees and two taxes to pay when purchasing a property in . As a rule of thumb these costs equal an additional 10-12% of the purchase price.
Fees
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Legal Fees: Usually around 1-2% of the purchase price, plus VAT (called IVA in Spain) currently charged at 16%.
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Notary fees: The scale is fixed by law and normally range from 300 euros for low priced properties and up to 1200 euros for more expensive purchases.
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Land Registry Fees: Generally about 20% less than the notary fees.
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Taxes
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VAT (IVA): All new properties are subject to an IVA tax of 7%. In addition a stamp duty (AJD) of 1% is also payable.
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Plus Vail: A local municipal tax usually paid by the vendor. Who pays this will be discussed in the negotiations with your lawyer.
Currency Matters
When buying Property in Spain you need to change your money into euros. It is best in these circumstances to use a currency broker. They will guarantee the conversion rate and fix a price at which you buy the euros. They offer extremely competitive rates and in nearly all cases offer a better deal than your bank. For more information contact us.
Letting it Out
Many people choose to buy Spanish Property as an investment. It may be less troublesome to find a long-term tenant, but you will have to offer them a lower rent. Holidaymaker's are more lucrative, but require more management.
Think about how much time you want to spend dealing with the letting. You may have lots of time and be able to handle everything yourself, alternatively you may wish to use our management service and let us handle everything for a small percentage.
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