Buyer’s Guide

 You want to buy a property in Spain?

Let Us Help You Find Your Dream Home

The purchase of a property is a mostly unique investment in life, which requires a far-reaching planning. Not only will you be given professional advice, but you will also get personalized search results.

We offer you the best advice as well as a convenient and above all safe way to find your dream property in Spain.

We work with a network of trusted broker colleagues. This gives you access to more than 20,000 current properties in various residential areas, whether they are new buildings, existing real estate or bank withdrawals. The advantage for you is that you only need one contact, one agent.

Your advantages

  • Large selection of different properties
  • Direct comparison in terms of location, size, accessories and prices
  • If you want to take your time with the search, we will mark your search request and give you privileged access to future projects and objects
  • Absolute transparency and information on all costs and acquisition costs
  • Negotiation and preparation and registration of preliminary contracts
  • Support for applications for public office
  • We inform you from the beginning about the costs that arise for your home purchase. So you can be well informed, make the right decision.
  • Easy handling of purchase formalities and security in relation to the object of purchase (guaranteed no load)
  • Collection, review and forwarding of complete documentation for the preparation of the purchase contract
  • Contact even after conclusion of contract for any questions regarding your property.
  • With us you can compare and enjoy the highest security as well as support up to the notary contract and beyond.

 

The procedure when buying a house in Spain

Buying property in Marbella, Spain is relatively straightforward and will pose no problem as

long as the correct steps are followed.

The most important steps

STEP I

Reservation document

Together with the offer on the property, the buyer will make a deposit at the estate agency, in order to show that he/she is serious. This amount could vary between 3.000 and 6.000 euros. Important that the amount that has been offered is mentioned in that document. The seller will be contacted, and if he agrees, the sales contract will be prepared. In case the seller would not accept the offer, the reservation fee, will be returned to the buyer.

STEP II

Property Check

At this point your lawyer will begin carrying out the necessary checks on the property with the local land registry to ensure that all the property’s documents are in correct order, that there are no embargos or debts on the property and that the person selling the property is actually the owner.

STEP III

Purchase contract

If it has been signed by the two parties, this is an official, legal document. All relevant details have to be included, like total sales price, final date for the Notary Deed and detailed information from the Property Register and if there are any outstanding debts, like a mortgage. Upon signing of the contract, normally a payment of 10% is done.

In most cases there exists a so called “escape clause”. The buyer could withdraw during the process, and he would lose his down payment /deposit in benefit of the seller. In case the seller would like to withdraw, he should double the amount received by the buyer, in order to compensate him/her.

STEP IV

Mortgage

As soon as the sales contract is signed, the preparations for the mortgage could start. You should count on approx. 6-8 weeks. The fix interest rate is at this moment (December 2016) 1,75% and the fix rate could be approx. 2% during 10, or more years.

STEP V

Notary Deed

The last and most important part of the purchase will be the Notary Deed, at the Spanish notary. Immediately afterwards the property will be presented at the Land Registry. On the day of the Deed, you will receive a so called “Copia Simple”,with is a copy of the document. Once the purchase has been registered, you receive the original document. This could take approx. 6-8 weeks.

Obtaining a NIE (Foreigner’s Identification Number)

The Foreigners’ Identification Number (NIE) is a personal, fixed and unique number that is used to identify foreign taxable subjects who, logically, do not have the tax identification document that all Spanish people have. All foreigners with economic, professional or social interests in Spain are under obligation to apply for a NIE before the relevant body of the Spanish Ministerio del Interior (Home Office).

The NIE must figure on all public documents that the interested party signs or which are issued in Spain, so the client must have this number before signing the deed of purchase.

You can get that at the Spanish Consulate or Embassy in your country or at the Police Station of the Spanish town where you live, work or intend to buy. The problem when doing it yourself is normally the time that it takes, the queues you have to do, etc.

We offer a fast and efficient service to obtain the NIE.

Opening a bank account in Spain

To buy a property in Spain, you must open a bank account

You will need a bank account in Spain to pay the utilities invoices and the fees of the Community of Property Owners. In the case that you obtain finance to buy the property, you will also need a bank account for the mortgage monthly repayments. You can use any bank in Spain but it is advisable to open the account with a bank and branch close to your place. Before opening an account it is important to be informed of the service charges for depositing funds, receiving or sending transfers, clearing cheques, etc. as we know from experience that there are huge differences between banks.

Here are the necessary data for the account opening:

  • passport
  • Last income tax declaration
  • The tax code
  • Document proving the address in the residential land. If it is correct in the tax return, it is enough, if not, a receipt (light, water, mobile phone) is enough.

 

The Cost of Buying and Owning Property in Spain

Finance costs

If you choose to buy with a mortgage then this will incur several additional costs. Who pays the expenses? The cost of valuation or appraisal of the property correspond to the borrower and can cost around 500 Euros, but unlike what happened until the entry into force of the new law, now ALL management fees, stamp duty (AJD), notary fees and Land Registry fees for the constitution and registration of the mortgage correspond to the lender entity. 

Lawyer

We always recommend our clients to get advice from an independent lawyer. He will charge you according to the service you require. This will vary according to the complexity of the purchase. Many charge around 1% of the purchase price in legal fees.

Notary costs

Notary expenses are nearly always paid by the buyer and are calculated in relation to the purchase price declared in the deeds of sale. To be on the safe side you should calculate Notary fees as being 1% of the purchase price declared in the deeds of sale. In many cases however Notary fees are more like 0.5% (or less) of the price declared in the deeds.

VAT & Stamp Duty (IVA & Actos Jurídicos Documentados – AJD)

These taxes apply for residential properties being sold for the first time (never previously occupied), or for commercial properties and plots of land. This is a national tax, so VAT is the same wherever the property is located (with the exception of the Canaries, which have their own version of VAT).

At present VAT (known as IVA in Spain) is 10% on the purchase price of residential properties (villa, apartment, etc), and 21% for commercial properties and plots of land.

VAT on new homes in the Canaries is known as IGIC (Impuesto General Indirecto Canario), and currently stands at 4.5%

Spanish Transfer Tax (Impuesto sobre Transmisiones Patrimoniales – ITP)

This tax applies if the property is deemed to be a second or posterior transfer (i.e. not the first time a newly built home is bought), and is paid by the buyer. If any deposit is paid before completion of the sale it is not subject to ITP pro rata. However the full amount of ITP still has to be paid upon completion. In this scenario there is no VAT to pay, and stamp duty is already included in this tax.

The Transfer Tax rate is ceded to the autonomous regions, who can choose to apply the general rate, or their own rate.

The general (national) rule of ITP is 7%, but many of the autonomous regions have applied higher local rates. The rate you pay depends upon the autonomous region where you buy (for more information see Transfer tax on resale homes – Impuesto de Transmisiones Patrimoniales (ITP)

Estate agency Fees

Estate agency fees or commissions are paid by the seller, unless otherwise agreed. If the buyer uses a search agency then search fees are paid by the buyer.

Despite the ability of the internet to bring together buyers and sellers without the need for an agent most people still use agents to find property in Spain. However you should be aware that agents charge between 3% and 5% of the sale price, depending upon the region and type of property. Unless the buyer has specifically agreed to pay the agent’s fee this cost will be built into the sale price.

After-Sale Service

                                       

We not only look after you during the placement phase, but also afterwards.

Of course, the after-sale service after buying a property is another aspect of our activity. To help you get started in everyday life in Spain, we provide you with a selection of service and service providers made up of reputable companies. e.g. Links to recognized doctors, lawyers, notaries, banks, tax consultants, property developers, architects, experts, etc.

Many of our customers do not use their property all year round. Upon request, we can offer you a reliable property management service and take care of your valuable property.

Selection of service

  • Property management
  • House cleaning and maintenance
  • Implementation of maintenance work

It is particularly important that there is a trusting relationship between the owners and us. Personal contact and a fixed contact person for all questions are of great importance.

Spain is a member of the European Union and has a strong legal system governing property and land rights. With the help of professional consultants, purchasing a property in Spain is legally safe and at little risk. Citizens from Member States of the European Union (EU) are not subject to any restrictions in purchasing property in Spain. For non-EU citizens, there are some particular details to be considered, but, in principle, the acquisition of property is not a problem.

We always recommend our clients to get advice from an independent lawyer

Special points can be clarified with a lawyer or accountant if necessary.

If you wish to buy a house in Spain is essential to choose the perfect place and a qualified professional to give to you the best advice. Said requirements must be known to perfection, and you will need legal advice to verify the data and physical state of the property, charges, utilities, thus, clarifying any doubts about the house since it will certainly represent an important investment.

To comply with the details and conditions contemplated in buying a house is appropriate to have efficient legal services that speed up and verify all the data, from the booking contract to the files related to the property that are kept in the registry, the possible debts that weigh on the property, to apply for the NIE in case of foreigners and bank account in the country, among some details that can only be confirmed by a solicitor who can also timely identify any irregularity.

 

Legal formalities and costs when buying property in Spain

Buying a home is one of those important decisions that we made during our lives. Therefore, it is not only important to know the price of our dream home, but also the costs that result from this purchase. There are several types of expenditure in this list of expenditures: some are specific to new or used houses, and other expenses apply to all types of housing, regardless of whether a mortgage is applied for or not. We at Marbella WOHNEN Immobilien in Marbella facilitate the entire purchase process of a house and provide legal and financial advice at any time in the implementation of all necessary procedures.

Taxes on the purchase of a property in Spain

The taxes you have to pay will depend on whether you are buying your first home straight from the promoter or buying a secondhand home.
Before you buy, it is important to bear in mind that any purchase agreement you make will involve taxes, so it is a good idea to find out ahead of time how much you will have to pay. The price appearing in the purchase agreement will be the base on which taxes are calculated, although if the price is lower than the property’s real value, the tax authorities will make out a complementary assessment to cover the difference. The taxes you have to pay will depend on whether you are buying a new home straight from the promoter or a second-hand home.

Real estate transfer tax

This is only applied to second-hand property purchases (resale) and is paid after the public deed has been signed. In Andalusia, the tax is calculated by stages and determined by the price of the property.
The levy starts at 8% for operations of up to 400,000 Euros, rises to 9% for prices between 400,001 and 700,000 Euros, and reaches 10% from 700,001 Euros and above. The tax is assessed individually, so that these quantities and tax rates refer to the percentage that each buyer has in the purchase.
Example calculation with a purchase price of 1.500.000 €
Up to 400.000 € tax burden 8 % = 32.000 €
for the amount between 400.000,01 € and 700.000 € are 9 % due = 27.000 €
on the amount of 700.000,01 € to 1.500.000 € it is 10 % = 80.000 €
Total tax burden thus 139.000 €
The tax must be paid within 30 days after the transfer of ownership.

VAT

Taxes are the largest cost, after the price, when buying a property in Spain. In the event that what you are buying is a new property in Spain, the main tax you will pay is the VAT (IVA in Spain). The term “New property” means the one acquired to the developer after its construction. What matters to be taxable by the IVA is that the property is conveyed for the first time.
Depending on the type of property that is transmitted for the first time the cost of the tax is different:
If what you are buying in Spain is a home, the tax rate will be 10%.
In the event that housing is subsidized, the VAT rate in Spain is 4%.
The other properties such as premises, plots, garages and storage rooms are taxed at the VAT rate of 21%. The exception to the rule is in the garages (2 max) and the storage rooms, that when are conveyed together with a dwelling in the same deed, are taxed as the home.

Notary or stamp duty

This cost buying property is a tax that applies to all acts formalized in public documents. The general rate is between 0.5% and 1.5% depending on the Spanish autonomous community where the property is located. Besides, the type of property transmitted is also taken into account, what makes the cost of this tax often varies, having special cases where the conveyance is exempt, with zero cost.

Notary fees

Notary expenses are nearly always paid by the buyer and are calculated in relation to the purchase price declared in the deeds of sale. To be on the safe side you should calculate Notary fees as being 1% of the purchase price declared in the deeds of sale. In many cases however Notary fees are more like 0.5% (or less) of the price declared in the deeds.

Land registry entry fees

The purpose of the Land Registry in Spain is to give legal security, acting as a public archive in which the facts around the property are recorded, acting as a universal publicity of the legal situation of the property. As we saw before, the registration of the purchase deeds at the Land Registry is not mandatory, but this cost, talking in legal terms, is the best investment you can do when buying property in Spain. If decide do not inscribe the property we are taking enormous risks.
Therefore, Land Registry cost is the one produced by inscribing the purchase deed. As the notary cost, the Land Registry cost is set by law and the amount depends on the price of the property or right to be inscribed. This cost can be reduced by circumstances affecting the property, as in the case that the property is subsidized.

 

Laws and regulations are subject to change, and so are the personal circumstances of each individual. This has been compiled as a guide for potential buyers of property in Spain, it does not seek to provide or replace legal advice which you should obtain from a qualified professional, nor is it intended to have any contractual effect.

 

Annual additional costs when owning a holiday home in Spain

Property tax IBI (Impuesto Sobre Bienes Inmuebles (IBI)

This is the main local property tax affecting owners of properties in Spain payable yearly to the Town Hall. The amount of the tax is calculated by reference to the valor catastral (official value of the property) registered in respect of all properties in Spain. The percentage charged varies from area to area, and is roughly 0.5% to 1%.

Community Fees

Owners of property that is part of any development, building, or complex in which common zones are shared with other owners are by law obliged to be members of the community of owners, known as the Comunidad de Propietarios. This will entail paying community fees for the upkeep of the common areas, and any other services that the community vote for. The fees will vary according to the magnitude of the common areas, the costs of maintaining them, and the services that the community vote for. A budget for annual community expenses is approved by majority vote of all owners (or representatives) who are present at the annual general meeting of the Comunidad de Propietarios.

Refuse collection tax (basura)

This local tax payable by property owner and a related to rubbish collection. The amount to pay varies from area to area, and should be paid to the local Town Hall every 6 months.

Income tax

At the most basic level, Spanish tax residents are liable for to pay income tax on their worldwide income, once personal allowances have been taken into account.

However, a non-resident of Spain is only required to pay tax on any Spanish income (such as rental income from a Spanish property). The income tax for non-residents (Impuesto sobre la Renta de No Residentes, IRNR, form 210) is charged at a fixed rate and there are no personal allowances or deductions.

Additional costs

Fixed connection telephone

Electricity, Gardener, Insurance, Water

 

GOLDEN VISA

  • Possibility of application for a residence permit in Spain by citizens not residing in the EU

From the 27 of September 2013, citizens not residing in the EU also have the possibility of applying for a residence permit in Spain, with which they can move freely through the 27 countries of the Schengen area. For this, they must invest, at least, 500,000 euros of own capital in a property in Spain. Amounts over 500,000 euros can be financed with a mortgage.

The residence permit is also valid for the spouse and minor children, as well as for the parents of the investor. Being required to pay taxes as non-residents; the minimum length of stay is not limited. Marbella WOHNEN Immobilien also offers you, together with our lawyers, competent and professional advice on this matter.

GOLDEN VISA HIGHLIGHTS

  • Investment of €500.000
  • Full family residency
  • Flexible. No requirement to reside.
  • Permanent Residency from 5 years
  • Citizenship from 10 years
  • EU Schengen visa travel

 

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With Us, you can find the lifestyle you deserve, the lifestyle you have always dreamed about.

We make your dreams come true.

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