In this article we are going to explain how to buy a house in Spain step by step. Also we will explain the different options depending on whether the purchaser is Spanish, or a foreigner.
Despite Brexit it is British citizens who purchase the most properties in Spain although in recent years many Scandanavian people have also been involved in the purchase of properties in Spain
01BUYING IN SPAIN. TAXES AND COSTS
AA.Taxes at the time of purchase
- New properties.
1. VAT or Canarian equivalent. %. Payment Deadline
When buying a new house in Spain the purchaser is obligated to pay the VAT. The rate of tax at present is 10% of the price declared on the Public title deed, although an exception exists when it comes to officially protected housing which is 4%. The payment is given to the vendor who must give this to the Public Treasury.
- Legal acts . %. Payment deadline
The regional tax that is generated by signing at the notary and subsequently registering the property in the Property Register . The tax varies according to each regional community , it is between 0.5% -1.5%, in Andalucia it is 1.5% of the value on the title deed.
- Previously owned homes.
Patrimonial transmissions. %. Payment Deadline
When buying a second hand home this tax exists which is a transfer tax which is between 6% and 10% of the value of the title deed. In Andalucia it is 8% . The time in which the payment has to be made is 30 working days from the date of signing the Public Title Deed, the payment must be made the corresponding regional Treasury delegation accompanied by a DNI , CIF or NIE , and copy of the title deed signed in front of the Notary.
BTaxes after purchase ( annually)
Rates bill. % .and payment deadline.
The rates bill is the tax relating to the property that is paid to the town halls and the amount to be paid varies between each municipality , it is determined by the catastrol value of the house and at no time can exceed the market value
In all cases a perecentage is established, according to the catastral value , which varies between 0.4% y 1.10% in urban areas y between 0.3% and 0.90% in country areas. .
In the case of Málaga the rate is 0.4510% urban areas and 0.6543% in rustic areas.
When do you pay the rates?
The time of payment as well as the form of payment varies between each Town Hall, in the case of Malag it will be between 5th of April and the 5th of June and between 1st of August and the 5th of October.
Rubbish collection. %. payment term.
This is a tax generated from the town halls and the cost depends on the cost of the service provided, , if the service is better the tax will be more
To give an example ; In Torrox ( Málaga) the four payments made during the year are 27.16 each.
Water % and payment term.
The water payment depends on the area, it is a municipal service that provides water to the properties in the municipality, there is a fixed price for the service and a variable cost which depend on the consumption registered on the water meter. In the case of Torrox it is the compay called Aqualia which provides the service and bills are every three months.
- IRPF (Personal Tax) / IRNR (Non resident tax) % and payment deadline
IRPF ( Personal tax) : is the personal tax payable on income obtained in a year for persons with fiscal residence in Spain. Purchase of a house does not have to be declared to the Public Treasury.
IRNR:/ Non resident tax) is a tax payable by people not resident in Spain who obtain an income in Spain. It is understood that if a person lives here for more than 183 days in a year it is their habitual residence.
CFees at the time of buying
The fees of the Notary are fixed by legal rules and the amount depends on the cost of the property. All the notaries usually charge the same amount depending on the price of the property INDICATIVE AMOUNT For a property with a value of 100.000 Euros the notary could charge around 675€ The higher the value of the property the more fees to pay.
Registration of the property
These are the fees generated by having the title deed inscribed in the Registry of Properties. These fees also are fixed by law and the amount will depend on the price of the property.
- Land Registry Deed
- Mortgage and taxation
Anyone can apply for a mortgage as long as they are between 18 and 70 years old , granting it depends on meeting some minimum requirements such as age, minimum income, your work situation such as the type of work contract you have, someone with and indefinite contract will have more chances of being granted a mortgage than someone with a temporary contract. To know what percentage you will be able to obtain you must have a valuation on the property made by a valuation expert registered with the SPANISH BANK . The price will depend on The minimum price for an appraisal is around 250 Euros and last for six months from the date of emission.
% Estate Agent
This is fixed by the real estate , normally it is a percentage of the sales price or a fixed amount . In the majority of cases the commision is included in the sales price but there may be a case where it is not included.
DExpenses after the purchase.
When a property is situated in an urbanisation or a community of owners there is a community fee to be paid for the service or maintenance of the communal zones which could be: lifts, pool, gardens etc. There is always an administrator who takes care of all these things.
From the moment of completion on the sale the utility bills such as water, electricity and rubbish collection become the responsibility of the new owner.
It is recommended that as soon as completion takes place you should immediately get a house insurance.
02BUYING A PROPERTY IN SPAIN:
ASpanish people and residents .
There are no minimum requirements for a Spanish citizen or resident
For non-residents wishing to purchase in Spain it is very easy , you simply need to obtain and NIE number ( Spanish identity number).
This is a personal number, unique and exclusive and is sequential. It is impossible to make any sort of economical transaction in Spain without using this number
You can apply for the NIE from outside Spain using the services of the nearest Embassy or Consulate or in our country by going to an immigration officed or the Police Commissary. To apply you must complete and application form ( Module EX15) which you can download from the web and pay a fee ( module 790 code 012) which can be found on this website
- Bank account
It is nor obligitory to have a bank account in Spain, but it is recommended as all the fees relating to the sale of the property as well as the future bills will be paid in Spain. . In recent months , to open an account, it is mandatory to supply you fiscal number from your own country due to the banks policy on money laundering.
03BUYING A PROPERTY IN SPAIN: SELECT YOUR HOUSE.
ABudget and payment
- How much money do you have at your disposal and how much are you going to invest.
It is important to know from the very first moment the budget you have for the purchase of a house as this will be the starting point.
- How are you going to pay: cash ,mortgage or subrogation.
Cash : covering the total price agreed with the seller: The paymemt wiil be made by a bankers draft or a transfer in favour of the vendor on the same day as the signing in front of the notary.
Mortgage : The decision of the bank when granting a loan will be influenced by the value put on it, the guarantees, job stability. Normally the bank will offer up to 80% of the value of the house, the rest , the 20% must be found by the buyer. For people who are not resident in Spain the percentage will be about 60%.
Subrogation: the purchaser can take over the mortgage of the vendor , modifying the titleholders It is a fairly frequent operation where the mortgage of the previous owners is taken over.
BType of house
- New, second hand or subsidized housing.
New : newly constructed properties that have not been sold to third parties since their construction.
Second hand: these are those properties whch have been inhabited , in second hand properties one can encounter a different state of habitablility.
Subsidized housing : these are usually properties with a much more accesible price and the most of them are for people with difficulties getting a house, they have economic advantages, but you must comply with personal and economic requirements and any obligations.
- Direct from seller
Buying a home from the seller has the benefit of being able possibly to negotiate a lower price and allow them to avoid paying commission but you must take precautions to avoid being cheated.
- Estate Agents.
One of the principal advantages of finding a property with an estate agent is the advice and support throughout the buying process . From the first moment the properties that best suit your requirements will be shown and they will be always there to help you answer any questions that may arise during the process.
Properties of new construction can be bought off plan or may be already finished.
One of the major advantages to buying a house from the bank is the ease and conditions of obtaining a mortgage, in many cases you will get a 100% mortgage. The price may be more than a private person can offer but you can always make an offer.
DLooking for the house.
- Compare it with others.
Within the priorities that we have for finding our ideal house , it is important, before taking any decision, to compare it with others in the same area , its location, age and general characteristics.
- View and check the house.
Once you have selected a list of properties you would like to view, it is very important to carefully examine the most important aspects of the house which could be the condition of the façade,roofs, interior walls etc. Once you have visited all the houses you should discard those which really are of not of any interest to you and keep those that interest you enough for you to wish to do a second visit..
- Check the legality
- Nota simple
The Nota Simple is a document produced by the registry of properties that states who is the propietor , if there are any charges or liens associated with it, and the the limitations of use that the house may have. Anyone can request a nota simple at the land registry
- Certification of domain and charges.
Unlike the nota simple the certification of domain and charges is a document sent and signed directly by the registrar. This document guarantees the fiscal security of the property. In the certificate will be included any charges or debts against the property at the time of issue, such as embargos, mortgages or pending lawsuits.
- Nota simple
- Complementary documentation.
- Copy of Title Deed
The copy of the title deed permits you to know all the personal details of the vendor of the property, the details of the property they are selling and if it is urban or rustic, its catastral refererence etc.
- Rates receipt
It is important to ask the vendor for the ultimate rates receipt for the property, with this receipt you can see the catastral reference of the property and find out if any rates bills have not been paid.
- Up-to-date community pay
Before the signing in the notary if the property belongs to a community of owners it is recommended that you ask for a certificate from the administrator for to find if the payments are up to date. If there are any payments pending the vendor must pay these before completing the sale at the Notary.
- Not rented, declaration or equivalent
- Energy certificate.
The energy certificate is necessary for to sell a house. This certificate gives information about the consumption of energy and the the CO2 emissions of the house. Since 2013 it has been obligatory and the vendor must request a technician who is permitted to issue these certificates to do so. It is valid for ten years
- Copy of Title Deed
04BUYING A HOUSE IN SPAIN: THE OFFER
- What it is and how it functions
This is a private contract with the object of securing the operation between seller and buyer by way of paying an amount of money as proof of intention. The contract will reflect both the sales price and the conditions that have been agreed for the purchase of the house
- How it functions
Once the contract has been drafted it will state a date when both parties sign, when it has been signed the purchaser will pay the amount contracted to the vendor, by bankers check or by bank transfer.
- What deadline can be put on the sale.
Realistically ( allowing for bank tranfers, mortgages etc.) In the deposit contract you have to put a maximum date for completion in front of the notary. Normally and depending on the circumstances of each sale it can be one or two months.
05BUYING A HOUSE IN SPAIN. THE CONTRACT
- Private contract when - and why.
This is a contract similar to the deposit contract, the difference being the penalisation to either party should they not continue with the sale , but this will depend on the agreement between both parties.
BPublic Title Deed
- What it is and what function does it have.
This is the final part necessary to formalise the sale of the property. It is a deed signed in front of the Notary. The Notary is under the obligation to read and explain the entire document and all the clauses therein.
- What does the purchaser obtain at this moment.
Once the public title deed has been signed the before the Notary and the remaining money has been paid to complete the sale the purchaser owns the property.
- The purchaser like the seller has thirty working days to pay the taxes that correspond to them as explained in Point 1.
06BUYING A HOUSE IN SPAIN : AND AFTERWARDS?
What is done after buying a house?
AInscription in the Registry of Properties
- Who and Why
It is the notary via telematic means will send an authorised copy of the Public Title Deed to the Register of Properties for its presentation.
BCommunication to the Catastral office
The buyer is obliged to communicate to the catastral office the change of ownership of the property within two months from the time of completiion. You must fill in the corresponding form with the details of the new owner, the previous owner and property and the deed of sale.
CChanging the name on utility bills.
Equally, like communicating the changes to the catastral office, you must change the name on utility bills, for this you have to take the copy of the escritura which proves you are the new owner of the property . It is recommended that you put these on direct debit so that you avoid having any utilities cut off because you did not receive the bills as you do not live all year in your property. The changes can be made in the office, by telephone or on the web.
DTaxes and expenses from the purchase detailed above
These can be seen detailed in Point 1B and Point 1D
The purchase of a house is something delicate and complex. We want you to know that we can help you. Do you want to buy a house in Spain in the Costa del Sol?. Maybe you are interested in what we can offer you?
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