Purchase process in Spain
Buying a property in Spain is a fairly precise process, and at Antara we accompany our clients from the beginning to the signing of the Deed.
When you find your dream property, the buying process can be broken down into three different steps:
Once you find the right property, you must enter into a reservation document with the seller, in order to remove the property from the market until due diligence and legal investigations are completed, if you are purchasing a resale property, or until it is grant building permission, if you are purchasing an off-plan property.
The signing of this document implies the payment of a reserve amount of approximately 6,000 – 10,000 euros, and includes the main conditions of the purchase: the parties, the property, the price, the payment method, the deadline for signing the private purchase and sale contract and the deadline for completion.
The properties are sold free of charges and expenses, and all expenses and taxes of the acquisition are borne by the buyers (taxes, notarial expenses and cadastral expenses), except for the Capital Gains tax, which is paid by the seller.
Regarding the taxation applicable to acquisitions, off-plan homes are subject to 10% VAT + 1.2% Documented Legal Acts, and resale homes are subject to 7% Property Transfer Tax.
The Private Purchase Contract (PPC) should be signed after receiving a positive result of the legal searches, or when the Building License is obtained (if purchasing an off-plan property).
This document involves the payment of the 10%-30% of the price, and establishes in detail all of the conditions of the acquisition and the penalties and compensations in case of a breach of the contract by any of the parties.
As the property is sold free of charges, the seller is obliged to cancel at his own expense any mortgage or debt before or simultaneously to the signature of the Title Deed.
When buying an off-plan property the developer is obliged to deposit all the amounts paid on account of the price in a special bank account, as well as to hand over to each buyer an individualized bank guarantee, to ensure that the amounts paid on account of the price will be reimbursed if the construction is not initiated or if it is not completed in time.
Notary Public, against the delivery of the keys to the property and the payment of the rest of the price.
Upon completion, taxes must be paid and the Deed will be registered in the Property Registry. In addition, the supplies (water, electricity, wi-fi,…), the community of owners and IBI fees and the garbage collection will be changed and domiciled in the name of the new owner.
There are two things that foreign buyers need to prepare before completion, and our lawyer can help you achieve them when you start the process:
- NIE number. It is the Non-Resident Identification Number, this number is necessary when carrying out some fiscal or administrative procedures in Spain, and it must be provided when opening a Spanish Bank Account and also when signing the Deed of Sale. .
- Spanish Bank Account. It is necessary to have a Spanish bank account once the work is completed, to be able to domiciliate supplies, community of owners and taxes (these cannot be domiciled into a foreign bank account).
It is highly recommended that you be assisted by a specialized lawyer, to ensure that the application will be successful. Our lawyer can help you throughout the process of purchasing and obtaining the Visa Oro.
For more information or any additional clarification, our lawyer will be happy to clarify any questions. You can contact Natalia Iturbe, our real estate lawyer.
At Antara we can offer you a wide range of properties that meet the requirements of the Visa Oro.