Once you have chosen your property it is essential to arrange a full legal check with a lawyer to protect your interests. Their checks will ensure that the seller is the legal owner of the property, and therefore has the right to sell and will also confirm if there are any outstanding debts or loans against the property.
To purchase a property in Spain you must have a Spanish tax number or NIE (numero de identificacion extranjero), your lawyer can arrange this for you too.
On the completion date, the outstanding balance (purchase price minus deposit paid) and all fees must be paid by the buyer, except for the ‘Plusvalia Municipal’ tax which will be paid by the seller.
The buyer and the seller then sign the ‘escritura de compraventa’ contract in the presence of a Public Notary who is the official required to witness the deed of sale. This contract is the equivalent to the Deeds of the property and both parties will be issued with a copy, the original signed ‘escritura’ is always kept in the notary’s office. A copy is passed on to the tax office and also to the property registry. The keys will be handed over at this point.
After both parties have agreed a price for the property and unless you are paying in full immediately, it is advisable to sign an Option Contract.
This contract will contain details such as the age and size of the building, the purchase price and date of completion, there will also be a description of the property. In addition, it will state which party is responsible for paying what and once this contract is signed the completion can be organised.
The deposit is payable when signing the Option Contract and the standard deposit is 10%. This contract is legally binding and therefore your deposit will be lost if you withdraw from the purchase. If however, the seller decides to withdraw, your deposit will be returned and you are entitled to the value of your deposit in addition as compensation.
In order to register the property in your name, you must provide proof of payment to the land registry office of the relevant purchase taxes. After completion these taxes must be paid within a period of 30 days, this will be arranged by your bank if you have a mortgage or otherwise by your lawyer. Late payment will result in a fine from the tax office.
As the owner of a Spanish property you must have an account at a local bank with sufficient funds to cover the normal running costs. Standing orders will need to be set up for water and electricity bills etc. We can introduce you to local bank managers who can open an account for you.
If you are using a mortgage to buy the property, the bank will usually insist that you contract a life insurance policy with them. It is also advisable to take out a house insurance policy to cover any potential problems. We will be able to put you in contact with an insurance company who can help you with this.