VIEWING AND BIDDINGAfter viewing, bidding and negotiation, buyer and seller agree on a sales price
RESERVATION CONTRACT (Contrato de Reserva)
A simple document setting price and payment terms. 6,000 Euros are payable as security deposit. The seller then removes the property from the market during a reservation period (of about 8-14 days) and documentation is retrieved from the land registry to make sure all information regarding the property is correct
PRIVATE PURCHASE CONTRACT (Contrato de Compraventa)
Once the solicitor has investigated the property and confirmed that everything is in order, the buyer and seller can sign the purchase contract. The contract is very detailed and contains a comprehensive legal description of the property itself. It also includes all buyers’ and sellers’ personal details, purchase price, schedule of payments, estimated date of signing the title deed and other legal clauses. In connection to signing the contract, the buyer usually pays 10% of the total sales price of the property
REGISTRATION OF THE PURCHASE
A few days after signing the title deed, it can be retrieved from the notary, after which it is handed over to the property register, which ensures that the property is officially registered in the name of the new owner. Now all costs, taxes, transfer fees and other legal expenses are paid. Your solicitor makes sure that all contracts such as water, electricity, owner association etc. as well as various taxes related to the property are signed over to the new owner and and paid by direct debit from the new owner’s bank account.
LEGAL EXAMINATION AND GATHERING OF DOCUMENTATION FOR THE PROPERTY
The solicitor contacts the vendor’s legal representative and gathers all pertinent documentation for the property and checks that all permits and licenses from the municipality are in order and that there are no outstanding debt, mortgages, costs, tenants and taxes pending for the property.
TITLE DEED (Escritura de Compraventa)
In Spain, the last step in a property purchase is at a notary office. It is a formal act and both parties, both buyers and sellers, either with their solicitors or the solicitors on their own with a power of attorney from their clients, meet with the notary to sign the title deed. In the same act, the buyer pays the remainder of the agreed sales price to the seller and the seller hands over the keys of the property to the buyer. From this moment on, the buyer is the rightful owner of the property. The title deed must be signed by three parties: the seller, the buyer and the notary.
The buying costs in Spain vary from 10% to 13.5% of the purchase price, broken down as follows:
10% IVA (VAT) on NEW properties, 8% to 10% IVA (VAT) on re-sales depending on price category 1% Notary fee ( Notarization of property cost) 1% Legal fees ( a fee charged by your selected lawyer to conduct the * Due diligence 1.5% Stamp Duty Tax ( A tax charged to make all documents legally effective) If you should require a mortgage, you should calculate an average of 1- 1.5% cost for the setup fee of a mortgage with a local Spanish bank.