Buying a house in a foreign country.
Here at Cómpeta Properties S.L. we understand that buying a house in a foreign country is an important decision and that many questions will arise. To be the owner of the property of your dreams is wonderful but we have seen that many buyers feel unsure about the steps to follow and that they have many unanswered questions, will everything be ok? Are we forgetting something important? Are we being given the correct information?
In spite of the existence of the European Union there are still differences between the countries. Not only cultural differences, but, also, legal differences, meaning that the process of buying a house can vary from your home country. With this information we would like to explain a little about the Buying Process in Spain. We may not be able to answer all of your questions but the team at Cómpeta Properties is always at your disposal to give you a hand along the way. In general, the steps to follow are as follows:
1) Viewing and choosing a house.
Naturally you will have thought about the house that would be ideal for you. Would you like a typical townhouse or do you prefer the tranquillity and freedom of nature? Do you prefer the convenience of a new apartment or a traditional finca in the country? You could make a wish list about your dream home, but there are also aspects that are important and not clear or visible on your first visit.
With our experience we would like to help you so that you don’t forget the aspects that can be important when buying. It is a pleasure for us to help you find a house that meets your dreams. We can show you any house in the area. We are at your disposal to arrange convenient appointments, accompanying you to the properties as many times as you like and answering all of your queries and questions. Once we have found the house of your dreams the buying process starts.
2) Negotiate the sale.
Once you have chosen a house we will start negotiating the price and the conditions with the vendor. The price is important but there are also other things, the payment form and deadlines, the date of completion. In the moment that the vendor and the buyer are in agreement, the house will be taken off of the market (as this could
be with several estate agents). It is normal for the buyer to pay a deposit of 5.000 €, which will normally be paid to the chosen solicitor or to Cómpeta Properties. The deposit can be higher for higher priced houses. The vendor should sign a document, which gives you the option to buy the house at the agreement price and with the agreed conditions.
3) Investigation of the reserved property.
After this, the solicitor will proceed to carry out the necessary legal investigations of the property to be sure that the property that you are going to buy is in perfect legal conditions, free of charges and debts or problems. This deposit is refundable if when the solicitor carries out the necessary checks they find something that stops the signing of the title deeds of this property.
When it is a question of a new construction, we make sure that the company has a good reputation and solvency and we will obtain guarantees that this will be constructed and developed as agreed and with the correct conditions. Once this has been carried out the solicitor will prepare the private contract between the buyer and the vendor.
Important I : Choose a solicitor or a gestor.
This can be done before, but in this phase it is very advisable to choose a solicitor. There are many excellent Spanish solicitors that speak very good English, and other languages, and that are experts in Spanish law. A solicitor offers you legal guarantees that the sale is following all the requirements of the law, they will also ensure that the property is free of charges, and up to date in the payment of the local real estate tax, payments of utility bills and community fees, etc.
We have a list of excellent professionals that can help you.
Important II: To carry on you will need to have:
- N.I.E number: An identification number for foreigners. For this you need to go to the police station with the original and a copy of your passport and the original and 3 copies of the form (which we can let you have). Here at Cómpeta Properties we are happy to help with this process and we can collect the NIE documents once these are ready.
- Open a bank account (for this you only need your DNI o NIE) we can accompany you to one of the local banks, if you prefer.
4) Private contract:
Once the solicitor has finished the checks and we are absolutely sure that the property complies with the law in the best conditions, the buying process carries on: The solicitor will draft a private contract and both parties will sign this. This private contract has all the details of the agreements, the payment form and the date of completion. During this stage, 10% of the sale price of the property will be paid.
5) Signing of title deeds:
This is the document that finalises the handing over of the property from the vendor to the buyer, it includes all of the important information about the property or the plot, if this were the case. The end of the buying process of a property takes place before a Spanish Notary, when the buyer and the vendor sign the title deeds of the property. The Notary is the state official whose assignment is to certify that the contract has been signed and that the vendor and the buyer have been advised on the payment of their taxes. This is the person that assures you that the legality has been fulfilled.
6) The title deeds and the registry of the property:
The property registry is an official public registry where you register, for general acknowledgement, the rights over a property as well as any other real rights and charges that this has. The property registry takes precedence over the Catastral registry (explained below) as for this the house has to have title deeds, whilst the Catastro shows all property, even if it doesn’t have title deeds. Once the sale has completed and you are the owner of the property, the solicitor will go ahead and register this with the Property registry to confirm that you are the new owner. The property registry will notify you as soon as the title deeds are ready to collect, this will take between 2 and 3 months after the signing.
7) The catastral registry:
The catastro is the global registry of all of the properties in the province where this is situated (in this case Málaga). The catastral registry is something that your solicitor will do. This process takes between one and three years.
Important III: Costs and Rates
- Utilities: We at Cómpeta Properties or your solicitor will arrange for the water, electricity, etc….to be registered in your name and that the payments are made via your Spanish bank account.
- Costs and Rates: There are 3 fees and 2 taxes to be paid for a property in Spain. In general, you should add to your expenditure between 10% & 12% of the sale price, the three fees are for the solicitor, the notary and the property registry. The tariffs for the expenditures for the property registry are publicated in the Boletin Oficial del Estado, you can visit this at: www.boe.es The taxes are the VAT, depending if this is a second hand or a new property and the Impuesto de Actos Juridicos Documentados.
For more information, please, ask in our offices.