BUYING A PROPERTY

With more than 15 years experience in the property market here in Spain, we are more than aware of the daunting task that buying a property can be, particularly in a foreign country where the language and legalities differ.

Our experienced and multi-lingual staff based here in Marbella, will guide you step by step, ensuring that the process is simple and enjoyable and not “rocket science”:

Step 1: When we have found you the perfect property, before making the final decision, it is imperative to ascertain the precise details relating to the outgoings payable each year to maintain the property.  These will include the community fees, in the case of an individual villa you may still need to maintain the gardens and pool if you are not living there permanently.  The local Town Hall (Ayuntamiento) will also levy an annual tax, together with charges for the collection of rubbish, notwithstanding Property Income and Wealth Tax.  It is also important to assess water rates and electricity charges which are paid every 2 months here in Spain, not quarterly as in the U.K.

That being said, one then has to consider the fact that prices in Spain are always quoted net.  Purchase costs involved include: 7% VAT, 1% Property Registration (Stamp Duty) 1% Notary Fees and 1% Legal Fees.  If you then require a mortgage, as do most, one should also consider that whatever financial institution you use, they may also levy a 1%-2% charge.

Step 2: Now that you have decided that your dream property is affordable, to secure the purchase you will need to make a Reservation Deposit of approximately € 6,000.00 + 7% VAT, this applies whether the property is new or a resale. This process will remove the property from the market and hold the price. Unlike the U. K. there is no “gazumping” here in Spain, once the Reservation Contract has been signed no-one can offer a higher price.

Step 3: If you have not already done so, this is the time to choose a local and independent Lawyer to safeguard your interests. We will be very happy to assist you with a recommendation, but there are many excellent English-speaking Spanish lawyers in Spain and choosing the right lawyer is your guarantee that Spanish legal requirements are met, that the property is registered in the sellers name and that it is free of any mortgages, charges, encumbrances, debts or other liabilities. Your lawyer will negotiate and discuss the purchase terms with the sellers lawyer. The terms should not be limited solely to price, but should cover in detail all your requirements such as the completion date, method of payment, etc. They will also assist you with your applications for an NIE number and to open a Spanish bank account - both legal requirements for owning a property in Spain.

If you require mortgage finance we can help you arrange this using our panel of independent financial advisers either here in Spain or in your home country. Spanish lenders are happy to provide mortgage facilities for non-Spanish residents based on simple “ability to pay” criteria. Our financial advisers will be happy to give you all the advice you need.

Step 4:  Once all the searches have been satisfactorily carried out, the next stage is the completion of the private contract of purchase (exchange of contracts). This is the point at which the sale becomes legally binding for both the buyer and seller. On a resale property, you will normally pay a deposit of 10% of the purchase price on exchange of contracts. This deposit is not normally refundable if you then back out of the purchase for any reason.

Conversely, if the vendor fails to perform his obligations, you will be entitled to the resolution of the contract enabling you to claim damages or to demand the obligatory fulfilment of the contract. On a new development purchase, you will generally exchange contracts with a payment of between 20% and 30% (plus the 7% IVA on that payment) of the purchase price, although this percentage can vary according to the development. There may be additional stage payments to make during the construction period - again this depends on the Developer's terms of payment. More importantly, with new property it is imperative that a bank guarantee is in place.

Step 5: Finally on the day fixed for completion, your lawyer will go to the Public Notary to sign the Title Deeds, making the final payment to the seller's lawyer, who will simultaneously pass over possession of the property to you, handing over the keys. At this stage, the sale is complete and immediately your lawyer will have the original title deed submitted to the Land Registry for registration of your title. Your lawyer can also arrange for the transfer of utilities and services such as water and electricity, into your name, and organise their payment through your Spanish bank account.

Step 6: It is advisable to speak to your Lawyer in respect to a Spanish Will, to ensure that your assets are safeguarded and that they strictly adhere to English Law.

Now that your purchase is complete, we are not going anywhere, please contact us in respect to your after-sales requirements, i.e. furnishing, design & alterations, renting and property management services.