In order to ensure the protection of your capital and rights when buying a property in Spain, we strongly recommend the assistance of a local and independent attorney, who will do all the necessary due diligence to guarantee that the transaction complies with all legal requirements and the asset is free of any debts or charges.
The Land Registry will register the new title of ownership from the date of signature at the public notary. Then, with the original document, we will proceed to liquidate and pay the corresponding taxes, to later submit the deeds to the Land Registry so that everything is correctly filed. This registration process generally takes from one to three months to be completed.
Also, once the sale is signed, we will take care of contracting the supplies (water, electricity, gas, telephone…), if yet not contracted, or will change the titularity of existing contracts. On the other hand we will inform of the purchase to the City Council and the Provincial Tax Collection Office, as well as to the corresponding community of owners. Also, if you wish, we can contract a home insurance policy, which we strongly recommend.
The signature of the deed of purchase will be done at a public notary. In this act, the seller grants title of ownership to the buyer and the buyer pays the remaining amount pending from the agreed selling price.
The notary will sign the minutes once confirmed the transaction has been carried out according to the law, verifying through the Land Registry the updated information about the property and ratifying that there are no last minute charges or foreclosures on the property. After signing the minutes, the notary will send an electronic copy of the Ownership Title to the Land Registry so that the owners are registered immediately.
We will accompany you and verify that all the documentation and details of the transaction are in order, being your translator and interpreter in the whole process.
If, for some reason you could not attend the date of signature, we would sign on your behalf as long as you have provided us with power of attorney to do so. The power can be signed at a public notary in Spain; In any Spanish embassy or consulate abroad, or at a public notary of your country of residence, in which case must be translated into Spanish and legalized with the apostille of the Hague Convention.
Regardless of whether or not you can attend the signature of the purchase, we always advise providing such power as they will allow us to carry out various administrative actions on your behalf.
Once decided which property to buy, we advise to deposit an amount as a reservation in the hands of the lawyer of the owner or the estate agency chosen, in order to secure the purchase, remove the property from the market, and set the selling price. Usually this amount ranges between €3,000 and €10,000 payable by credit card or bank transfer.
In the event that you do not want to continue with the purchase, the deposit will not be returned, unless otherwise agreed in advance. Therefore, we recommend that, before signing a reservation document, you consult with us the terms of such document for our approval since, although specific conditions of the transaction will be included in the subsequent private purchase contract, there are important aspects already included in the reservation document that will have to be respected afterwards.
Once the reservation document has been signed and delivered the deposit for this purpose, the ownership must provide the buyer with all the documentation related to the property in order to study the legal, urban and fiscal situation of it and to detect possible conditions, liens or debts that may affect the buyer in the future.
After verifying everything is in order, we will proceed with negotiations to elaborate the private purchase contract where, Reque-Lawyers will work to defend your interests, keeping you informed about the terms of the agreement at all times.
Generally, the costs associated to the purchase of a property will vary, but they usually are between 10% and 13% of the purchase price. These are as follows:
Lawyers’ professional fees range between 1% and 1.5% of the purchase price, depending on the complexity of the transaction, plus VAT. A minimum fee of €1,500 plus VAT will be charged in any case.
Depending on several factors, they usually range between €300 Euros and €1,500 per transaction.
Land Registry’s fees
As with notaries, Land Registrars must keep their fees in line with certain procedures but, as a general rule, their fees are lower than notaries’ fees.
Transfer Tax (Property Conveyance Tax) and Stamp Duty (for Documentation of Legal Acts)
Applicable on resales and paid after signature of public deed, this tax is calculated by stages and is determined by the price of the property. The levy starts at 8% up to €400,000, rises to 9% between €400,001 and €700,000 Euros, and reaches 10% from €700,001 Euros and above, Therefore if the selling price is €750,000 the tax would be: 8% x €400,000 + 9% x €300,000 + 10% x €50.000 = €64,000.
SINCE APRIL 2021
The entry into force of the tax reduction at the end of April 2021, brought a reduction in the transfer tax to 7% on the sale of second-hand homes.
This tax is exclusively charged on the purchase of new housing. The applicable rate in Andalusia is 1.5% of the price.
SINCE APRIL 2021
The entry into force of the tax reduction at the end of April 2021, brought a reduction to 1,2%.
The purchase of new housing is subject to payment of Value Added Tax (VAT). The current rate is set at 10% of the price.
Beside from the aforementioned taxes and costs, we need to add those inherent to the different administrative processes: procurement of supplies, obtaining the NIE, power of attorney…
The purchase contract will include the agreements reached between the parties and sale conditions according to the Spanish legislation. It will be signed between two weeks and one month after the reservation made, and usually involves 10% payment of the selling price, deducting from this amount the initial deposit. In case of off-plan or under construction properties, this amount could be between 25% and 40% of the selling price.
It is very important to reflect and include in the contract, any condition or commitment agreed by the buyer with the seller and/or with the estate agent, therefore, must inform us promptly since, once signed, both parties will be obliged to comply with the stipulations agreed.
On off-plan or under construction purchases, several payments will be made between signing the contract and the deed. We will manage these payments on your behalf and will request the pertinent guarantees to the developer. In Spain, real estate developers and builders who receive payments in advance on purchases of properties under construction, are legally obliged to guarantee the amounts received until work completion, by means of a bank guarantee or insurance policy; this way, in case works are not completed, buyers will recover all the money they have invested, plus the corresponding legal interest.
NIE stands for: «Número de Identificación de Extranjeros» or in English: “Foreigners’ Identification Number”. This unique and fixed personal number is used to identify foreign taxpayers who, obviously, do not have the tax ID number every Spaniard has.
Foreign citizens with economic, labor or social interests in Spain are obliged to have one, and it will be used in all Spanish public documents signed by its holder, therefore, it is compulsory to have it in order to sign a property purchase at the public notary and also to open a bank account in Spain.
Reque Lawyers offers you a comfortable and efficient service so you do not have to worry about your NIE.