There are two important factors to consider when buying a property in Spain. The first, of course, is to find an area which suits your life style and your budget. Then, you should select an estafe agent with whom you feel comfortable. Ideally, you will remain with this agent throughout the entire property search and purchase.
Once selected ask your agent for details of the properties she or he shows you. You will want to know the amount of I.B.I. (council tax), the community fees, the amount payable in respect of Property Wealth Tax and so on. Take heart, Spain is not an expensive place to live.
When you have decided upon a property, your agent will ask you for a reservation deposit. Depending upon the erice of the property, this can range from €1,000 to €12,000. Having paid this deposit, the property is taken off the market. However, it is essential that you have well and truly made up your mind before paying this deposit and signing this reservation agreement. Should you change your mind or be unable to proceed with purchase, then it is very likely you will forfeit this sum.
After the reservation fee has been paid, contracts are normally exchanged within a fortnight or so, the period can vary. Normally, the deposit payable on exchange of contracts is 20% but in the case of new developments, the deposit can be larger. This brings us to the second essential: your lawyer. We will carry out negotiations on your behalf, make the necessary searches and enquiries and protect your interests throughout the transaction; and should you wish, We can obtain a mortgage on your behalf from one of the many Spanish banks who offer very competitive rates. If you have chosen wisely, we will be glad to help you with matters unconnected with strict conveyancing law at no extra charge.
On the date of completing, our law firm, the representatives of the sellers and, perhaps, the lending bank, will meet before a notary to complete the purchase on your behalf. Later that day, we will arrange for the transfer of electricity, water, etc…, to be registered in your name and will set up standing orders with your bank account to ensure your property always enjoys water and electricity. Then there are legal fees to pay. Notary fees can vary from €440 to €1.900. Land and registry fees, another charge, are a little less than the fees of the notary, and our lawyer fees, on top 1 % of the purchase price.
There are two different types of faxes on the purchase of a dwelling. If the property has been sold before (resales) then the fax is 7-10% of the purchase price. There are, of course, some exceptioris to this role. If the dwelling is a new one, I.V.A. must be charged. This is a value added fax which, at the moment, is charged at a rate of 8%. The tax is payable along with the deposit and any stage payment. On completion, 1,10 % stamp duty will also be payable. There are many other details that advise, but these will be dealt with on a case basis. We will keep you informed and work together to make your property purchase a pleasant and secure experience.