The following is a general guide to purchasing new and resale property in Spain and as such does not attempt to cover all the legal aspects and financial points and we therefore strongly recommend that you employ the services of a lawyer. It is usual when purchasing a property abroad to sign over Power of Attorney to a lawyer who can then act under the purchaser’s instructions in their absence.

Purchase Contract

On finding a suitable property a private contract between the vendor and purchaser will be drawn up by your lawyer. This contact will contain all the details relevant to the property including:- Description, purchase price and deposit, form of payment, penalty clauses, inventory (if applicable) and an “on or before” completion date.

When both parties are agreed the contract is signed and the deposit will become payable. The deposit of usually 10% of the purchase price.

At this stage you must be sure that the property is the one for you as there will be a clause in the contract stating that if the purchaser rescinds the 10% deposit will be forfeited. If the vendor rescinds they must pay double the deposit to the purchaser.

Searches

Prior to signing of the Title deeds (escritura) the lawyer will conduct searches and obtain a “Nota simple” to ensure that the vendor is the registered owner, all taxes have been paid, if any charges or debts exist on the property and that clear title can be obtained.

The deeds are signed at the public notaries office in person by both the vendors and purchasers. If either party can not attend signing can be carried by notarised Power of Attorney.

Usually the Title deeds are signed within the completion date previously agreed. Prior to signing all bills relating to the property must be proven to be paid up to date, (electricity, water, rates etc,). The lawyer will make these available for inspection by the notary. This is important as under Spanish law all debts relating to a property remain with that property after it is sold.

Making Payments

The full balance of the payment is required before title can be transferred to the purchaser, therefore it is essential that arrangements are made for funds to be available prior to completion. Payments are usually made by bank transfer or by bankers cheque or draft.

If a mortgage is required CNN Property Services can arrange this for you but this process can take several weeks.

A bank account will be required and again we will be pleased to arrange this on your behalf.

NIE Number

A fiscal number or “NIE” is required when purchasing property is Spain.  This is a relatively simple process and would require one visit by the purchaser(s) to a National Police Station.  CNN Property Services would be pleased to guide you through this process.

Buying Costs

There a number of costs involved when purchasing property in Spain which for a rough guide do not normally exceed 10% of the purchase price. These costs will be 2 – 3% higher if the purchaser requires a mortgage.

These costs are made up of the following:-

Stamp Duty or Transfer Tax is charged at 7% of the declared price for resale properties. This tax does not apply to new build properties but instead 7% I.V.A (V.A.T); will be charged.

Notary and registration fees are approximately 2% of the declared value.

Lawyers fees are normally a maximum of 1% of the purchase price.

Plus Valia Tax is levied at 3% and is normally the responsibility of the vendor.

Taking Possession

This takes place once the title deeds have been signed and full payment is made.

Transfer of Services

Electricity, water, rates, and telephone (if applicable) are all paid by direct debit through your bank account. The lawyer will normally arrange for the connection or transfer of these services. Insurance for the property is the responsibility of the new owner and CNN Property Services will be pleased to assist with this.

Wills

It is strongly recommended that a Spanish will is made to cover your Spanish estate. Whilst a foreign will is recognised this may lead to delays in settling the estate and will inevitably lead to extra expense. Your lawyer can draw up a will for you and this will have to be notarised.

Although it appears daunting the Spanish conveyancing system is straightforward and used properly ensures complete safety for both the purchaser and vendor.