The buying process in Spain
Once you have found your property in Spain the purchase procedure is simple and efficient.
Firstly you will need to appoint a lawyer to handle the purchase on your behalf. All lawyers in Spain are members of the “Colegio de Abogados” which is similar to the Law Society in the UK and they are therefore fully regulated by the law in Spain. The important factor is to find a lawyer who is fully conversant with property conveyancing in the area in which you are purchasing the property and also speaks English. If you are unable to attend the final signing of your purchase here in Spain you can give the lawyer Power of Attorney to purchase the property on your behalf.
You will be asked to place a small reservation fee with the vendors lawyer to secure the property you wish to purchase. This deposit fixes the sale price and removes the property from the market. This is normally non refundable unless there is a problem with the paperwork of the property.
On payment of the reservation deposit your lawyer will perform a search at the land registry to confirm the status of the property and if there are any outstanding charges or encumberances on the property. Your lawyer will also ascertain that all the relevant taxes and utility bills have been paid.
PRIVATE PURCHASE CONTRACT
On completion of the searches your lawyer will inform you that the property is free of any problems and will prepare a private purchase agreement with the vendor to reflect all the conditions of the sale, including the completion date. You will be asked to pay a larger deposit usually 10% of the purchase price which will include the reservation fee already paid. This is similar to exchanging contracts in the UK and is legally binding on both parties. Should you withdraw from the sale after exchanging contracts the 10% deposit is non refundable. If the vendor withdraws from the sale you will receive back your 10% depost plus a further 10% penalty from the vendor - Subject to your lawyers advice.
On the agreed date for completion a new Title Deed (Escritura) will be drawn up for signature by you or your lawyer in front of a Notary, who will also have obtained a certificate from the Land Registry confirming that the property is free of any charges. A Notary in Spain is empowered by the government to make sure that all transactions are understood by both parties and are being carried out under the laws of Spain. Once signed, this deed will be sent by the Notary to the Land Registry who will register the property in the name of the new owner. Your lawyer will obtain a copy of the deed from the Notary after the signing and the original will be returned after registration.
Apart from the purchase price of the property you must take into consideration the costs involved. These will vary depending upon the property being new or a resale. The costs involved will include VAT or Transfer Tax, Stamp Duty, Registration, Lawyer and Notary fees. You should allow up to 10% of the purchase price to cover these fees.
After completion your lawyer will continue to assist you with obtaining your NIE number and Spanish Residency papers if required and also changing the utility contracts for the property into your name. The lawyer can also help you with your annual tax returns as required under Spanish Law.
The purchase process in Spain, although different to the process in the UK, is a very safe one if you employ a good lawyer. The horror stories that you may have previously read or heard about only apply if you try to cut corners and don´t use an independent qualified lawyer.
If further advice or information is required, please click the link to our Legal Advice Centre, and please quote Gateway to Andalucia.