Buying process in Spain
The process has 3 main phases:
1. Reservation Deposit, €6,000
2. Signing of Private Purchase Contract (PPC) with 10% stage payment
3. Completion at Public Notary and payment of the remaining balance
1. RESERVATION DEPOSIT
You will secure the property with an initial reservation deposit, usually 6000€. In this contract (Contrato de Reserva), you set the agreed price and payment terms and any additional conditions. The property is then removed from the market for a period of time (approximately 7-14 days). During which time, the lawyer will check all documentation required to ensure that everything is correct with the property, such as all permits, licenses, and if needed, to cancel a mortgage on the property or any debts, etc...
2. SIGNING A PRIVATE PURCHASE CONTRACT (PPC)
After the legal check, the buyer and the seller can sign the purchase agreement (Contrato de Compraventa), which is 10% of the agreed price. At that stage, both buyer and seller are legally obliged.
3. ACCESS - TITLE DEED
The buyer and seller must both sign the title deed (Escritura de Compraventa) before a notary (normally within 30 days). This confirms that the contract is legal and the payment has been paid in full. The ownership of the property is transferred from the seller to the buyer. The title deed is then registered with the Tax Office and the Land Registry.
Expenses - Costs involved in buying a Spanish property:
You should budget for purchase taxes/costs on top of the full purchase price to cover:
Resale property purchase: Property Transfer Tax (ITP)
Up to €400,000 - 8%,
From €400,001 - €700,000 - 9%,
Over €700,001 - 10%
Notary & Land Registry Fees: Approx 1%
Lawyers fees - 1% (plus IVA) of the purchase price (subject to a minimum charge of €1,500)
Registration of the property 1.5%
Power of Attorney (approx 250 euros per person)
Número de Identificación de Extranjero (N.I.E.) (approx 200 euros per person)
New property purchase – 10% IVA (VAT) on the purchase price
Land purchase – 21% ITP