You maybe have been dreaming of your own place under the sun, owning a holiday home in Spain or a wish to live permanently in Andalucia.
when you start looking for a property On the internet you will find many properties for sale. First you need to find out where in Spain you would like to buy, do your research about climate, accessibility to transport, the kind of houses you like and the real estate prices. Spain is a large country and diverse. So is the real estate market in Spain; not only prices, taxes, licenses and permission to built differ.
There are a few very help full property search websites that give a good reflection of the market as Idealistic, kyero, photohouse, Rightmove etc
As a foreign buyer is it good to know upfront how buying a property in Andalucia Spain works. However we always advise to use the services of a (property) lawyer : to explain all legal issues and for due diligence.
Analyze your budget and make a financial plan.
The main costs and taxes involved buying a property in Andalusia Spain :
- Buying costs; notary, title deed tax and land registration fee 1–2.5%;
- Transfer Tax (ITP Property Transfer Tax) by resale property is only until 31st December 2021 in Andalucia reduced to a 7% .
- Legal fees 1–2% (including VAT).
- Mortgage costs 1–2%
When you consider to purchase a property calculate about 12% to 14% of the price as additional costs and taxes.
Tax identification number
As a non-resident a NIE is necessary to buy a property in Spain. This is a tax identification number (Foreigner Identity Number).
You can arrange to apply in person, via a Spanish consulate or via a lawyer
The buying process in 3 steps
When you have found the property you would like to buy you first need to find an agreement with the vendor on the price. You will get a reservation document that holds information as the vendor and buyers details, property details, price, dates of signing the private contract and terms and conditions.
1. Reservation document.
By signing a “reservation contract” the property will be taken from the market for 15 – 30 days. As a buyer you will have to pay a reservation deposit (between 3,000 and 6,000 euro) to be held by your lawyer or on a separate account by the real estate agent.
During that period a purchase contract will be drawn up and legal checks will be carried out by the lawyer. Your legal advisor will now perform due diligence.
The reservation deposit is refundable if settled in the document conditions as subject to prior legitimate checks, subject to finance (mortgage approval) etc.
2.Private Purchase Contract
As soon as the necessary legal checks have taken place, you will be required to sign the private purchase contract which will state the full price of the property. The private purchase contract is called “Private Purchase Contract”.
It is a legally binding contract where both parties agree on a date of completion between 4 to 6 weeks in general. This is the moment the buyer pays the vendor 10% of the agreed purchase.
3.Signing of the title deeds: completion
The traditional handover of the property (public deed) will take place at the notary. If you can not be there in person you can give your lawyer Power of Attorney. The buyer pays the rest of the purchase price and the property transfer tax. The land registry will be updated and the new property owner receives the keys.
If you would like to be contacted about buying a property in Andalucia Spain please send us a message.
