Being a small family run business affords us to ensure a more personal service is given to our clients in comparison to the larger companies. Our dedicated team at Tropical Homes Spain is here to ensure that buying a property in Spain will be as straight forward and as stress free as possible for you. We will assist and guide you before, during and after your property purchase. This section will give you some of the key points on what to expect when buying a property here in Spain:
Obtain an NIE (Número de Identidad de Extranjero)
An NIE number is required (for each person if more than one person is buying a property). The NIE number is a Spanish tax identification number that you need to open a bank account, purchase a property and to sign title deeds.
It is obtained from a Spanish National Police Station, either in person or by your lawyer once you have granted Power of Attorney to your lawyer to act on your behalf. However, before you even start your property search, you may be able to apply for an NIE through the Spanish Embassy or Consulate based in your home country.
Open a Spanish Bank Account
You must open a Spanish bank account. This can be done in person or by your lawyer through appointment of Power of Attorney. We can assist you in opening a bank account if you require it.
Finance
If you require a Spanish mortgage, Spanish banks will loan around 60%-70% at the moment, to non-residents (subject to status).
If our country’s currency is not the Euro then we can advise that you consider using a specialist currency exchange company as they often can offer more competitive rates of currency exchange than the banks and we can introduce you to a highly reputable international exchange company. They also have a multi-lingual team of staff to help.
Purchase Costs and Additional Fees
When looking at buying a property in Spain it is important to be aware of the purchase fees involved which are not included in the advertised price of the property. Generally you must allow an additional 13% for taxes and legal fees. These costs are to cover the following:-
• Re-Sale Property Purchase Tax on a re-sale property of 10%
• IVA @ 10% on a new build property
• Stamp Duty for a new build property at approximately 1.5%
• Plus Valía on new build property only
• Approximately €2,000 euros for:-
o Notary Fees
o Land Registry Fees
o Solicitors Fees
Initial Steps Once You Have Decided On a Property and Agreed A Price
Obtain Legal Representation
Buying a house is one of the biggest investments most people make in their lifetime. Therefore, you must instruct a lawyer (Abogado) to act on your behalf and manage the purchase process for you. You are free to use any lawyer of your choice or if you wish. However, we can introduce you to local independent Spanish lawyers who speak English and generally have a team who speak a multitude of languages, who are fully qualified, legally registered and who have Professional Indemnity Insurance in place in the event of malpractice or negligence. Registered abogados are subject to disciplinary action by the Bar Association so must conduct themselves honourably to continue practising else risk being disbarred.This is very important when seeking legal representation and we are more than happy to guide you in the right direction to help you to avoid any pitfalls, espcially by using intruders posing as lawyers who have been known to mess in conveyancing issues!
Reservation Contract (Contrato de Reserva) and Deposit
You will sign a Reservation Contract for the agreed purchase price. It is standard practice in Spain for this Reservation Contract to be accompanied by a sum of money. This money is known as a Reservation Deposit (Señal de Reserva). It usually amounts to between €3,000-€6,000 depending on the price of the property, to reserve the property and remove it from the market, usally for an agreed period of time.
Purchase Contract (Contrato Privado de Compraventa)
A Purchase Contract creates a binding agreement between you and the Seller. It establishes a completion date and sets of the Terms & Conditions of the sale.
During this period your lawyer will check the paperwork to ensure the property is legal, that there is correct planning and licences for any improvements works carried out at the property, the property is free of any mortgage, debts, encumbrances or other liabilities. Once your lawyer is satisfied of the property’s legal status you will then sign the Purchase Contract.
Completion: Sales Contract (Escritura de Compraventa)
The completion takes place in a local Notary office (Notaría). On the day of signing both parties will present with their lawyers. If you are not available to attend the notary in person you can grant your lawyer power of attorney to sign on your behalf, as many buyers choose to do.
It is here where the remaining balance will be paid by either bankers draft or by bank transfer. The keys to the property are then handed over to you. You are now the proud owner of your new property!
Registration of the Title Deeds (Escritura Publica)
Once the Title Deeds have been signed and exchanged, you will officially be the new owner. The deeds are registered with the Land Registry, which takes approximately 2-3 months. In the interim you can request a copy of the records (Copia Simple) from either the Notary or your lawyer.
When registration has been completed the Property Registry will get in touch with your lawyer to inform them that the Title Deed is ready for collection.
Finally, as well as overseeing the registration of your deeds, your lawyer will also arrange for payment of the various taxes arising from your purchase. In addition to this, your lawyer can help you to make contracts with suppliers of utility services such as water and electricity services and can also arrange for your bills to be paid by Standing Order from your Spanish back account. This can also be arranged for your annual community fees and SUMA bill.
This is just a guide to the whole process. We do not expect you to remember everything you have to do. Please do not hesitate to ask us any questions if you unsure about anything as this is why we are here for you. We will also be here for you once you have bought your property
