Buying process

The Property Purchase Process in Spain – Professional Guidance

Buying a property in Spain is an exciting step, but it’s essential to understand the process and seek professional guidance. Below is an overview of the key steps, costs, and legal aspects.  

1. Choose a Licensed Real Estate Agent
Select a registered and reliable real estate agent who can help you find the perfect property. A good agent will advise you during negotiations with the seller and guide you through the entire process.  

2. Hire a Lawyer
A Spanish lawyer is crucial for a secure transaction. Their responsibilities include:  
- Verifying that the property is free of debts, liens, or unpaid taxes.  
- Confirming that all community fees (HOA fees) are paid.  
- Assisting with contracts, taxes, and registration.  
Cost: On average, 1% of the purchase price (excluding 21% VAT).  

3. Property Due Diligence
Depending on your choice (new build, resale, or land), your lawyer will conduct legal and cadastral due diligence. A local lawyer helps avoid delays.  

4. Reservation  
Once you’ve chosen a property:  
- You sign a reservation contract and pay a deposit (€3,000–€15,000).  
Payment advice: Use a credit card for faster processing (foreign checks cause delays).  

5. Signing the Preliminary Purchase Agreement
Within 14 days of reservation, you sign the **private purchase agreement** (*contrato privado de compraventa*).  
- You pay 10% of the purchase price (usually via a Spanish bank account or your lawyer).  
- Your lawyer opens a Spanish bank account (if desired, though not mandatory) and verifies the property title.  

6. Finalizing the Sale at the Notary 
The purchase is finalized at the notary:  
- For resale properties:** Final payment + signing of the deed.  
- For new builds: Staged payments (every 2–4 months) until delivery (max. 18 months).  
New-build guarantee: Developers must provide a bank guarantee for your security.  

7. Registration and Utilities  
The notary registers the deed at the land registry (takes a few months).  
Your lawyer handles:  
- Transfer tax (see below).  
- Water and electricity connections (may take 4 weeks).  
- Contracts in your name (utilities, insurance, HOA fees).  

8. Taxes and Cost Breakdown 

A. Transfer Tax (Resale Property)  
- Andalusia (Costa del Sol): 7% (reduced since 2023).  
- Murcia (Costa Cálida): 8% (up to €400,000) / 9% (above).  
- Valencia (Costa Blanca): 10% (varies by municipality).  

B. VAT + Stamp Duty (New Builds)  
- VAT (IVA): 10% (for residential new builds).  
- Stamp Duty (AJD):  
  - Andalusia: 1.2%  
  - Valencia (Costa Blanca): 1.5%  
  - Murcia: 1.5%  

C. Plusvalía (Municipal Capital Gains Tax)
Paid by the seller (unless agreed otherwise). Based on the land’s increased value.  

D. Notary Fees
Varies depending on the purchase price.  

E. Estimated Total Purchase Costs
- Resale property: 11–14% of the purchase price.  
- New build: 10% VAT + 1.2–1.5% AJD + notary fees.  

9. Mortgage Options 
Spanish banks offer mortgages to non-residents for up to 70% of the appraised value.  
- Term: Max. 20 years (depending on age).  
- Requirements:  
  - Income 3x higher than monthly payments.  
  - Recent payslips / tax returns.  
  - Bank references.  

10. Additional Advice 
- Draft a Spanish will to avoid inheritance issues.  
- **Selling your property?**  
  - 19% capital gains tax for non-residents.  
  - 3% withholding tax (refundable after tax filing).  

Conclusion
Proper preparation and professional guidance ensure a safe and smooth purchase. We’re here to assist you every step of the way!  

Questions? Feel free to contact us.