A Guide To Purchasing A Property In Spain

COSTS OF PURCHASING PROPERTY IN SPAIN

All additional costs associated with buying a property in Spain amount to approximately 13% of the purchase value . This amount includes the purchase price tax, stamp duties, notary fees, land register entry, legal assistance, utility transfer costs and bank check costs.

TAXES RELATED TO THE PURCHASE OF REAL ESTATE (10%)

• When buying a secondary market property, the buyer pays the Impuesto sobre Transmisiones Patrimoniales (ITP) transfer tax, which is currently 10% of the property value on the Costa Blanca.

• When purchasing a property on the primary market, the buyer pays the VAT Impuesto sobre el Valor Añadido (IVA), which amounts to 10% of the property value.

STAMP, NOTARIAL, LEGAL AND ADMINISTRATIVE FEES (approx. 3%)

• Stamp duty when purchasing real estate on the primary market is 1.5% of the purchase price.

• Notary fees are specified by law. We will receive a copy of the signed notarial deed (copia simple) on the day of signing, while the original notarial deed will be received after approximately 6 weeks, i.e. after the property has been registered to the new owner. In Spain, the notary is not required to check the property for unpaid mortgages, etc. Therefore, using the services of a lawyer is recommended in Spain.

• Fees for rewriting utilities (gas, water, electricity), which amount to approx. 200 Euro

• A fee for checks that we collect at the bank on the day of the notarial deed and give to the selling party at the notary. The amount of the fee depends on the value of the property and is approximately 0.06% of the property price.

PROPERTY MAINTENANCE COSTS

• Utility fees – water, electricity

• Municipal fees for waste collection, sewage, etc.

• Monthly community fee (communidad) for maintenance of common areas such as swimming pools, gardens, elevators, security. This fee does not apply to houses located on their own plot.

• Real estate tax (IBI – Impuestos sobre bienes inmuebles). The annual fee ranges from 0.4% -1.16% of the cadastral value

• Property insurance.

STEP BY STEP PURCHASE PROCESS

1. Property reservation and legal status check
   Property reservation is based on a reservation agreement and is associated with a fee – 3 000 - 6 000 euros. Then the documents and legal status of the property can be checked by a lawyer. The reservation fee is always refundable in the event of legal problems that cannot be resolved before the purchase.

2. Assigning a NIE number and opening a bank account in Spain To buy a property in Spain, you need to have a tax identification number for foreigners NIE An application for NIE can be submitted to the Spanish consulate in Tallinn or official Police offices in Spain. You can also have our lawyer submit the application, who will need your power of attorney for this. To buy a property, you need to have a bank account in Spain. For this purpose, you need a passport or ID card and a PIT return for the last year sent to the bank in advance. After opening the account, you top it up with the amount necessary for the purchase, and before visiting the notary, you collect checks - this is a procedure in force in Spain that guarantees the security of the transaction for both parties.

   
   

3. Purchase Agreement (Compra – Venta) The equivalent of the preliminary agreement. The buyer pays a deposit as a guarantee of the transaction (10 – 20% of the property price).

4. Notarial Deed and Transfer of Real Estate
   The property becomes the property of the buyer upon signing the notarial deed. After signing the notarial deed, the notary is obliged to provide information about the change of ownership of the property to the local land and mortgage register. Within 30 days, you must pay transfer taxes related to the purchase of the property and complete the formalities related to the registration of your title. Of course, we provide full legal support during the entire sales process as well as post-sale formalities.